Automotive industry: how do car brands rediscover their mojo?

With over thirty-seven million car owners in the UK and hundreds of millions more worldwide , the car business is big business. Despite its scale and value, for the past sixty-years manufacturers all too often embrace defensive strategies such as ‘built-in obsolescence’ rather than opting for unadulterated innovation to drive demand.

While effective, such negative strategies build risk-averse cultures that only a few have managed to escape. The pioneering and fearless spirit that drove the likes of Karl Benz and Enzo Ferrari has long since been replaced by a crippling culture of fear – and it shows.

It was fear that led VW engineers to be less than truthful about emissions. And the same fear is responsible for suppressing innovation within the sector, particularly within the mass-market.

Take GM for example; 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 post before moving on – and they’re acutely aware of how to play the game. Keep your nose clean for three years, and you'll land yourself another plum job in a desirable location. Detroit, Zurich and Melbourne are at the top of most executives list. However, dare to raise your head above the parapet in an attempt to move the business forward and fail, well, you need to be aware of the consequences.

Get it wrong, the rumour mill threatened, and you were looking at a three-year stretch in the relatively unchartered territory of Eastern Europe. It’s not the best example of a performance-led culture that we’ve come across.

Car brands must get ready for the fight of their lives
With risk aversion 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 – both professionally and personally.

The forefathers of this once great industry designed and built cars people wanted to drive, cars they fell in love with 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 represents a rare moments in time. A moment when man, machine and manufacturer were perfectly in-time and in-tune with one another – connecting on an emotional level. Each of these brands had a powerful point of view on the world and was clear about the problem they were solving for customers.

Over the years we’ve helped a number of automotive clients reposition their brand, from McLaren and Rolls Royce to Opel and Hyundai. And through this work we’ve spent many hours talking to consumers, leading us to conclude that there are very few genuine brands within the sector. In the absence of a compelling brand strategy, the product becomes the brand, and the brand is the product.

Without a defining point of view or promise at their heart of the brand, they struggle to connect with consumers. And it’s particularly evident once again within the mass-market where portfolio strategies often leave the parent brand devoid of meaning – but it needn’t be this way.

Take Mini for example: from launch in 2001, it built its brand around fun, freedom, and individuality – successfully connecting to 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 democratising cars for all. So it can be done – it’s either not valued, or understood, or deemed too difficult to achieve.

Use your brand to disrupt the category
So here’s the thing: we know we’re sitting on the verge of a seismic shift within the sector. 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.

Furthermore, a recent KPMG’s global survey of automotive executives states that 82% of ‘C-suite’ executives and heads of departments working within automotive companies believe that a Silicon Valley company will launch a car within the next four years. And when that happens do you really 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 and disrupt the category.

It’s not too late for car brands, but they need to get into training for the fight of their lives – starting with building their brand and using it to illuminate the road ahead and drive the business forward. They need a ‘clear defendable territory’ of their own to build new meaning in consumers’ minds before their cautious approach means they miss the bus.

 

Richard is Managing Director & Founder at The Clearing and has helped McLaren, Rolls-Royce, Opel (GM), Hyundai and Williams to develop their brands.