Loyalty Programs and Genuine Oil – OEMs’ Search for Revenue Sources Beyond Vehicle Sales

Vehicle OEMs are increasingly looking for revenue sources beyond vehicle sales to help boost profitability and are mainly focusing on the fixed operations side of their dealerships. OEMs and their dealerships are investing in advertising and expanding service departments with dedicated quick lube installations to help drive customers back into dealerships for after-sales service of their vehicles.

Ford recently announced its FordPass customer loyalty app, which offers consumers reward points for servicing their vehicles at Ford dealers. While this isn’t a new concept, Ford is serious about developing its rewards program and has consulted with experts in customer rewards programs such as JetBlue, Marriott, and Apple to help ensure the success of its own program

Kline’s OEM Genuine Oil Brands and Programs study already found that Ford is one of the top OEMs for customer loyalty and dealer compliance (>90%); a recent announcement that Ford is doubling its corporate expenditures on customer service shows the company’s genuine interest in driving customers back to its dealerships.

There has also been a large movement by OEMs and dealers to gain some of the traditional quick lube volumes with branded OEM quick lubes. Ford has nearly 5,000 of its Quick Lane service centers, and Nissan, Toyota, and Chrysler all have their own branded quick lubes. Many OEMs that may not have had genuine oils in the past have recently started to introduce their own OEM genuine oil. Tata and Mahindra just recently jumped into the genuine oil market and have been actively promoting their ventures with free product offers and advertising.

Kline’s recently published reports on OEM Genuine Oil Brands and Programs in the Consumer Automotive Segment and the Heavy Duty Commercial Segment provide a detailed and independent appraisal of penetration levels by OEMs and the competitive threat posed to branded aftermarket lubricant suppliers in the PCMO segment, along with an assessment of the impact of genuine oils on the overall HDMO market. These research studies also help identify and develop strategies to target franchised workshops operating under a genuine oil program to market and promote specialty products, such as synthetics, and remain competitive despite not being in the primary brand position. They include:

· Activity by leading OEMs by country markets and regions

· Detailed assessment of the depth of product portfolios including passenger car motor oil, viscosity grade, and formulation type

· An insight into how vehicle owners perceive a genuine oil brand compared to an aftermarket brand

· Program summaries offered by OEMs through their franchised workshops, designed to create awareness and loyalty to the workshop rather than other installed service providers

· Potential impact estimations on a volume basis to suppliers of aftermarket brands in the franchised workshop segment

· Assessment of the current and projected heavy-duty on-road fleet in leading country markets

· Analysis of vehicle ownership and usage characteristics in the leading country markets

· Details of current genuine oil programs and assessment of upcoming genuine oil entrants

· Current and projected HDMO genuine oil demand in the leading markets by viscosity grades, quality levels, and channels

· Market outlook and the opportunities and challenges in the emerging HDMO genuine market

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