amelia@sitch.report
https://www.sitch.report/members/automotive/brand-dashboard/volkswagen
Digital sameness and an obsession with innovation is undercutting the emotional backbone of automotive brands in digital. A sector once powered by brand and identity, appears trapped in a self-reinforcing cycle of rationality.
The automotive industry faces a critical inflection point. But it's not the one you might think.
Innovation in electric powertrains, connectivity and autonomous driving dominates industry headlines and brand positioning. Traditional brands rush to adapt models, and build more integrated and e-commerce enabled digital experiences. Yet our analysis suggests these technological upheavals may be a distraction from a more fundamental shift: the slow erosion of the power of brand in auto.
When the pragmatic realities of this innovation surge flatline — that is, the tangible consumer benefits become ubiquitous — what many automotive brands have sacrificed along the way will matter more than ever: a distinctive brand identity and an emotional connection with consumers.
Our study of 47 automotive brands competing for Australia's 1.2 million annual unit sales reveals a startling truth: despite massive digital investment, most brands are virtually indistinguishable online. They're following the same templates, speaking in interchangeable voices, and failing to forge meaningful brand distinctiveness in digital.
The data is stark: 87% of Australian automotive brands scored average or below on brand distinctiveness in our study, measured across their digital execution of brand personality, visual style and tone of voice. Even among market leaders with sophisticated digital experiences, excellence comes primarily from executing the standard template well, rather than forging meaningful differentiation.
This dynamic is particularly acute in the mass market segment, where leading brands like Hyundai and Toyota maintain leading market share and high digital experience scores, but achieve them through consistent but conventional execution rather than distinctive brand building online. The same headlines promise the same innovations. The same configurators deliver the interchangeable experiences. Different logos mask what has become an increasingly commoditised playbook.
Even brands with strong and distinctive brand positions forged in traditional mass advertising, largely fail to follow-through in digital. The review revealed predominantly bland direct response social ads, video and display — seemingly reliant on leveraging more robust brand ads elsewhere — and cookie-cutter websites that re-skinned and barely rewritten could pass off as each others.
While 95% of automotive brands maintain average or above brand consistency scores, consistency in executing an undifferentiated digital brand is an empty victory. This prioritisation of reliable execution over distinctive expression has created an Australian auto landscape where brands are dependable, but increasingly indistinguishable from one another in digital channels.
The dilution of brand in digital is driving increasingly functional, lower-loyalty shopping behaviour. According to Yahoo's latest Auto Path to Purchase study, 2 of 3 Australian's said they started their car buying journey brand agnostic, and 62% switched to a new brand from their last owned brand during the journey. The generational trend is even more concerning: only 18% of Gen Zers say they care about the brand/manufacturer, as opposed to boomers, who care about it the most, at 31%.
This upheaval in what was traditionally a brand powered category has triggered a problematic reaction: automotive brands doubling down on functional, rational messaging in digital channels. As consumers shop more on practical criteria, brands respond with increasingly functional positioning, creating a self-reinforcing cycle of commoditisation.
The ratio of functional to emotional brand values recorded in our review skewed hard functional, specifically in the mass market at 71% rational to 29% emotional but even for the luxury cohort (61% to 39%).
In this environment, innovation has become a go-to positioning. Our analysis shows 40% of automotive brands now put innovation at the centre of their brand story in digital. This innovation cohort, including brands like Tesla, BYD, and Volkswagen, is growing unit sales faster than the category at a rate of 72% over the past 3 years, vs. 27% for everyone else.
Yet even as they lead in digital experience scores (innovation cohort average: 53 v 44 for 'the rest'), these innovation-focused brands risk falling into the same distinctiveness trap. A new DTC update on the old template, that skews more functional than the rest of the market -- training consumers to shop features-first and brand agnostic.
For new entrants, including the mass of Chinese brands looking to Australia as a test market, this new landscape may work as an advantage. They can win on price and product, rather than relying on the long-term brand trust and heritage that traditionally has worked as a category moat for auto market leaders.
But the truth is, the innovation cohort's growth is already showing signs of deceleration, as the positioning becomes increasingly crowded. The era of innovation has it's eventual expiry built in -- If everybody is innovative, nobody is.
The data presents a challenging paradox: while functionally-oriented brands are winning market share and brand appears less relevant to market performance today (particularly in the mass market), this trend may prove unsustainable. As key functional benefits converge across brands — from electric powertrains to connected customer experiences — the gap between function and feeling will likely reemerge as a critical battleground.
The Australian market is at the forefront of this shift to a more innovation focused, functional and ultimately homogenous branding landscape for automotive. With new entrants setting the tone, and traditional brands chasing the 'new normal', brand is undoubtedly taking a backseat. With 10 new Chinese brands set to enter the market in the next 18 months, the pressure on brand differentiation will only intensify.
But the truth it's, it's a false dichotomy - brands need not choose between feeling and function. Many traditional brands have hard won brand equity, built over generations, and undoubtedly worth preserving in the quest to 'keep up' with new entrants. Cars are, and always have been an identity purchase for consumers. There's no compelling reason to think this will change, and much to be lost for strong brands swept up in technological transformation.
So in the race to win the minds of a new generation of auto shoppers, don't forget to win their hearts too. Make brand the driving force of innovation: the reason for new features, the 'why' of everything you do. Because when the dust settles, people will inevitably return to decision drivers like trust, reliability and status - if you have them now, don't let them go.
Get emotional.
Consistently reinforce emotional and identity-hinged brand attributes beyond the functional at every touchpoint.
Layer your brand narrative.
Imbue everything with meaning, from model brands to key features and services, ensuring all elements ladder up to a coherent brand story.
Build your brand in digital.
Treat digital as a brand channel, not just a conversion tool. Invest in digital-first assets that do more than leverage TV commercials.
Choose quality over quantity.
Focus on quality over quantity, and progress slowly and intentionally towards more robust features and content that bring more of the path to purchase online
Prove your brand in digital.
Use your digital experience as a proof point for your brand promise and vehicle experience, it should feel like the brand at every moment.
Consider innovation as an enabler.
Consider innovation hygiene, not a core positioning. Use technological advances to fuel your unique proposition rather than letting them become your primary message.