Where did it all go wrong for car brands and can they ever rediscover their mojos?
Within 12 months of Karl Benz inventing the car, the rich and famous began to race them. Like the product itself, the automotive industry moved pretty quickly back then in 1886. Fast-forward 130 years and you’d expect the speed of change to have accelerated, but this isn’t the case. While the market continues to grow, technology and innovation appear to have plateaued some time ago.
There are currently 37 million car owners in the UK and hundreds of millions more worldwide. Today, the car industry is big business but the sheer size, scale and value of a category that produces 93.5m units globally, every year, comes at a cost. And that cost is innovation.
For over half a century the automotive industry has adopted defensive strategies, such as built-in obsolescence, to project and strengthen its position. While such strategies have been effective, they’ve inadvertently built risk-averse cultures. No manufacturer is immune from the malaise, regardless of their market position. The once pioneering, occasionally dangerous spirit of Karl Benz, Henry Ford, Enzo Ferrari et al has long since been replaced by a crippling corporate culture of fear. And it shows.
It was fear of the truth that led VW engineers to be economical with the truth about emissions. It is the same fear of failure that has suppressed innovation within the sector, particularly within the mass-market.
Take GM for example; did you know there are two types of employee within General Motors? The international elite managerial set and their local market colleagues. The international set is responsible for shaping and managing the business, typically spending three years in a job before moving to a new post. Each one of them knows how to play the game. Simply keep your nose clean and you’ll land another job in a desirable location. Detroit, Zurich and Melbourne were all popular destinations when I worked with GM.
However, dare to raise your head above the parapet in an attempt to move the business forward and you need to be aware of the consequences. Get it wrong and you and your family will be looking at a three-year stretch in deepest darkest Eastern Europe, something nobody in the organisation particularly relished. It’s not the best approach I’ve come across of developing a performance led culture.
With conservative, risk-averse cultures highly prevalent within the sector, it’s not surprising that the Beetle, Mini and Fiat 500 have all enjoyed a renaissance. It’s a proven formula car executives can get behind with minimal risk. Surely it’s only a matter of time before the Renault 5 returns from the breakers yard in the sky.
The forefathers of this once great industry designed and built cars they believed people wanted to drive and fall in love with – cars that pushed boundaries and captured the imagination, turning customers into fans.
From the original Rolls Royce Phantom and Ford Thunderbird to the Mini and Golf GTI, each of these cars represent rare moments in time. A moment when man, machine and manufacturer were in tune with one another and connected on an emotional level. Each of these brands had a clear point of view on the world and understood the problem they were solving for customers.
As a brand consultant with over 20 years’ experience, I’ve helped a number of automotive clients position their brands, from McLaren and Rolls Royce to Opel and Hyundai. When you spend time with consumers you soon realise that, in the absence of a defining brand strategy, the product becomes the brand and the brand is the product.
Overall, it’s my opinion that car brands lack a defining point of view, a reason for being and a promise at their heart that connects them to the consumer. And it’s particularly evident within the mass-market where portfolio strategies often leave the parent brand devoid of meaning. It doesn’t have to be this way.
Speak to any ‘supercar’ or ‘luxury sports car’ owner and they’ll quickly summarise the market for you. Porsche is the genuine driver’s car and if you buy one you’ll gain respect and credibility wherever you choice to drive it. McLaren, also a driver’s car, is a pure breed racing brand believed by consumers to be the closest you can get to an F1 experience on the road. Ferrari, also admired for it’s racing heritage, is renowned for its Italian passion and flair, as demonstrated through its design. As for Maserati, Ferrari’s less showy sibling famous for its seductive interiors, sadly, the brand is damningly dismissed as a ‘sofa on wheels’ for people who don’t know what they’re buying.
So what does this tell us? It tells me that, if you don’t get out there and control the chatter, the chatter will eventually control you – and that’s a position no brand ever wants to be placed in. Clearly it’s easier to deliver a distinctive brand in the premium and super-premium sectors, when the products within your portfolio are limited. Branding within the mass market is rarely used to good effect, which is surprising when we know it’s a proven driver of value.
Take Mini for example: since its launch in 2001, it has built its brand around fun, freedom, and individuality, successfully connecting to more affluent urban dwellers. Likewise, the original Volkswagen Beetle also won hearts and minds as far back as 1946 when it launched the ‘people’s car’ positioning, effectively democratizing cars for all. So it can be done – it’s just not sufficiently valued or understood by the industry at large.
So here’s the thing: we know we’re sitting on the verge of a seismic shift within the automotive industry. Autonomous cars are in the post, the future’s all about mobility and even the way cars are distributed and purchased is going to radically change. And it doesn’t end there.
In a recent KPMG’s global survey of automotive executives, 82% of ‘C-suite’ executives and heads of departments working within automotive companies said they believe a Silicon Valley company will launch a car within the next four years. And when that happens, do you think they’ll observe the industry conventions and launch a vacuous brand? Absolutely not. They’ll develop a fabulous product and use their biggest asset, their brand, to maximise their advantage.
It’s not too late for car brands, but they need to get into training for the fight of their lives so the brand can lead the way and illuminate the road ahead. They need to quickly own a ‘clear defendable territory’ in consumers’ minds before their cautious approach means they miss the bus.
Richard Buchanan is managing director and founder of The Clearing