Ford Motor Company (F), General Motors Company (GM) & More: These Auto Players Inspire The Best Brand Loyalty

Gasoline
Similar to car insurance companies, there’s a love-hate relationship with gas stations. They’re often considered a necessary evil, yet advertising isn’t necessarily the key to driving brand loyalty here, either. In fact, the top brand in the sector for generating loyalty,Royal Dutch Shell plc (ADR) (NYSE:RDS.B), rarely turns to advertising to boost its image. Instead, it relies on its reputation as one of the nation’s best-quality gasoline sources to fuel return customers.

In addition, Shell emphasizes the use of the Shell card as a way for consumers to earn points toward future gas purchases while reducing its own costs (i.e., no third-party credit charge) and keeping customers locked into its network of gas stations.

What’s the takeaway?
Now that we’ve had a glimpse into which companies drive the best brand loyalty in the automotive sector, let’s examine what factors are consistent throughout the sector that might help investors pick out the next great company in the sector.

First of all, innovation is obviously very important. With gas prices well over $3 a gallon in most parts of the country, fuel economy is the first hurdle that’ll help automotive companies drive loyalty. Ford Motor Company (NYSE:F)’s EcoBoost engines, and Avis’ purchase of ZipCar to expand its ride-sharing business, are keys to getting in consumers’ favor.

Also, market share and brand visibility are defining factors in the automotive sector. State Farm, for instance, is 8.5 percentage points ahead of the second-highest car insurance company (Allstate) in terms of market share. This gives members the impression that bigger will mean better coverage and representation in case of an insurance claim. Similarly, Shell ranked No. 1 in terms of total gallons sold and market share in the U.S. as of 2009, according to the Lundberg Survey.Brands that are easily visible usually command strong brand loyalty.

The article These Automotive Companies Inspire the Best Brand Loyalty originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends, Berkshire Hathaway and Ford. It also recommends General Motors.

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