Posts Tagged ‘Audi’
Wednesday, August 10th, 2011
If you follow the luxury segment of the automobile business in the US, then you know that the best and most powerful brands are those considered to be “Tier 1.” They represent the largest volume brands in the segment, have the most loyal customers, command the highest margins, have the highest resale values, are the best defined, are the most prestigious and the most desirable.
Every Tier 2 brand aspires to be in Tier 1. Audi set the target years ago to become a Tier 1 brand and some would say that it has achieved that goal. More recently Cadillac has made no bones about the fact that it wants to be a Tier 1 brand and has set it sights on BMW. Infiniti is striving to make it into Tier 1 and Jaguar would like to return. The fact remains that only Mercedes-Benz, BMW and Lexus have achieved the volume, credibility and prestige to be true Tier 1, everyone else is Tier 2:
That said, I think the goal of becoming a Tier 1 brand may be a fool’s errand in today’s luxury segment. It made sense almost 20 years ago when Audi set that as the target but does it really make sense today?
Tier 1 is full of accepted conventions that must be present in order for the brand to be truly Tier 1. For example, in the Tier 1 world, all dealerships must be exclusive and should be Taj Mahals built to reflect the prestige and loftiness of the brand they represent. In these Taj Mahal dealerships, customers must be served lattes, have a customer experience befitting their level of success and certainly not have that experience sullied by the presence of mass market product or customers. In Tier 1, as defined today, manufacturers must offer three sizes of sedans, at least two cross-overs, a sports car as well as a tuner division that churns out high performance model variants. In traditional Tier 1, it is essential to have a D-segment (think MB S-Class, BMW 7-Series, Audi A8) sedan that represents the brand’s ultimate execution of a luxury vehicle. It’s pretty rarified air up in Tier 1, but if you can get there, profits and volumes are huge.
Here’s the rub, the whole Tier 1 paradigm has been built around the baby boomer generation and I can’t help but wonder if the conventional thinking about Tier 1 runs the risk of taking a manufacturer down a path that will be less relevant in the future. (more…)
Tags: Audi, Automotive Retail, BMW, Branding, Lexus, Mercedes Benz, Tier 1 luxury
Posted in Auto manufacturers, Automotive Retail, Strategy | 7 Comments »
Wednesday, January 26th, 2011
Last year, I asked the same question and I think the answer was “no.”
Audi’s terrific A3 TDI commercial led the automotive pack, ranked 6th of 65 by USAToday but all the others were also-rans. Here’s how the automotive participants ranked in last year’s advertising beauty contest:
A dismal showing by the auto industry. Despite being one of the highest interest product categories with some often fantastic products, we seem to be unable to captivate the Super Bowl audience.
To be clear, getting highly ranked in USAToday’s poll has nothing to do with judging a TV commercial’s effectiveness, it simply is a measure of a panel of consumers’ reactions and “how much they liked each ad.” But it is without question, ‘the game within the game.’ As a Super Bowl advertiser you spend $3MM or so for 30 seconds and the chance to get noticed and liked. It’s an opportunity to get tongues around the world wagging about your ad, your brand and maybe even your products.
But to make that happen, you have to do something amazing. (more…)
Tags: ad agencies, advertising, Audi, BMW, Chevrolet, Chrysler, clean diesel, Hyundai, Jeep, Kia, Super Bowl, Volkswagen
Posted in advertising, Auto manufacturers, The Agency Business | 3 Comments »
Monday, August 2nd, 2010
In recent years, Audi has done a terrific job marketing its brand. Sales are up globally and will probably exceed 1.0MM units this year (WSJ 8/2/10). In the US, Audi came through the recession on a tear and has never looked back. Great products, great design, with quality that has improved and is now comparable to the best in the business. The Audi brand is aspirational and prestigious in most global markets. While it has lagged its competitors in the US, it has gained in prestige in recent years and many would say it has achieved the vaunted Tier-1 status in this country.
So why would one of the most well-regarded progressive luxury automotive brands in the world make the silly mistake of blatantly copying their nearest competitor?
A few weeks ago I was in the UK and I happened to walk by Leicester Square in London and was excited to see an Audi display in the park. I went over to have a look and discovered that the display was part of the UK’s introduction of the A1.
The display was called “AreaA1″ and it was getting a lot of attention from Londoners. It was the first time I had the opportunity to see the A1 in person. It’s a wonderful car and I hope the folks at Audi of America make the decision to bring it to the US. It was so crowded, that it was hard to get a picture….at least a good picture: (more…)
Tags: Audi, BMW, Branding, marketing, Mercedes Benz, positioning, Strategy
Posted in Auto manufacturers, Branding, Strategy | 12 Comments »
Tuesday, June 22nd, 2010
The D-segment of the luxury market is tough. The best luxury manufacturers in the world bring their best technology, design and engineering to the table and the result is the world’s best 4-door sedans: BMW 7-Series, Mercedes-Benz S-Class, Lexus LS, are perennial best sellers. It’s tough to break-in, Audi has struggled for years to build volume in the segment with its A8 despite having what many would say is the best product.
So what makes Hyundai think they can introduce the Equus into this rarefied air and succeed?
Let’s get one thing out of the way. From a product perspective, the Hyundai Equus will be a very able competitor to the best luxury sedans in the business. Hyundai has demonstrated that they build exceptional quality cars at multiple price points, the most recent being the Genesis, a near to mid luxury entry. The Equus is already getting good reviews and at $55,000 will offer D-class luxury at a very reasonable price.
The issue for Hyundai is not the product or the price. (more…)
Tags: Audi, BMW, customer experience, D-Segment, dealers, Hyundai, luxury, Mercedes Benz, Tier 1
Posted in Auto manufacturers, Automotive Retail, Strategy | 16 Comments »
Friday, April 30th, 2010
What a difference a year makes. It’s 2010 and the auto industry is beginning to recover.
After an incredibly tough 2009, consumers seem to be coming back. For the first time in recent memory, Americans’ perception of domestic automobiles seems to be on the mend (Business Week 4/23). Ford’s bet that Americans will buy smaller, fully featured automobiles looks like it may pay off. GM’s product plan created by soon-to-retire Bob Lutz is leading a resurgence for the General. Hyundai and Kia, supported my excellent product quality, have taken advantage of recessionary sensibilities and grown share of market. Audi , Subaru and Mini have come out of the recession on a tear.
On the other side of the ledger, Toyota continues to struggle with recalls and concerns about quality. This has led to unprecedented incentives by Toyota and the predictable response by competitors to match them. So a good number of consumers who had been sitting on sidelines during the recession have come back to dealerships looking to for a good deal. After 2009, it’s a relief to see traffic in the stores but at the same time if the incentives continue that will not be good for the industry long term. In 2009, some progress had been made at reducing the use of incentives, but the moment Toyota jumped in to defend its franchise, that opened the floodgates again.
So the good news is that customers are returning to the stores, but are they coming back for the right reasons?
(more…)
Tags: Audi, BMW, GM, Hyundai, Jaguar, Kia, Mercedes Benz, Mini, Porsche, SAAB, subaru
Posted in advertising, Auto manufacturers, Automotive Retail, Branding, Strategy | 2 Comments »
Thursday, March 18th, 2010
JD Power just released its 2010 Vehicle Dependability Study and there are some surprises. Porsche is ranked 1st, Lincoln 2nd and Buick and Lexus are tied for 3rd. It wasn’t so many years ago that Lexus dominated the VDS study as the perennial number 1 and some may wonder what has happened? Particularly in light of the well publicized Toyota quality issues.
The fact is that nothing has happened to Lexus, they design, engineer and build an extraordinary vehicle. What’s happened is that the other manufacturers have improved to the point where every year it’s a genuine dogfight to get to the top spot.
There were some other surprises that weren’t so good…. (more…)
Tags: Audi, Buick, Cadillac, Jaguar, JD Power, Lexus, Lincoln, vehicle dependability
Posted in Auto manufacturers, Branding, Technology/Product | 5 Comments »
Tuesday, March 9th, 2010
Amid all the drama surrounding GM, every so often I see something that strikes me a smart. In Geneva, Cadillac announced it’s aspirations for Europe (WSJ 3/8/10 Sub required, NYT 3/2/10).
After a number of high profile failures to enter the European market in a big way, the folks at Cadillac want to be a niche player and are willing to accept the lower volumes that go along with such a strategy. By keeping volumes low, and presumably margins high, they expect that they can be profitable from year 1.
I think this strategy is sound and will succeed. Cadillac’s current design language is unique and appealing. There has always been a segment of the automotive market that is interested in something different and Europe is no different than the United States in this regard. In Europe where Mercedes-Benzes, Audis and BMWs are common and cover a multitude of uses including taxis, rental cars, executive cars and the vehicles of choice for captains of industry, there is an opportunity for something “different.”
(more…)
Tags: Audi, BMW, Cadillac, Diesel, marketing, Mercedes Benz, Strategy
Posted in Auto manufacturers, Strategy, Technology/Product | 2 Comments »
Thursday, March 4th, 2010
Below is a letter to the editor from today’s Wall Street Journal that I think provides an important perspective on unintended acceleration.
Allegations of UA and the media furor around it virtually destroyed Audi in the United States. Audi was vindicated eventually, with UA and the unfortunate accidents associated with it attributed to driver error.
Toyota is now “in the barrel” with the politicians and media all intimating that there is some sinister plot at work. There’s a lot at stake. If there have been genuine misdeeds then let’s prove it beyond a question of a doubt and hold Toyota responsible. If indeed, driver error was the issue, I hope that the media and our politicians will be as quick to acknowledge the fact as they have been to hoist Toyota on its petard.
Please let me know your thoughts in the comments section below and here’s the letter:
(more…)
Tags: Audi, Driver error, Toyota, unintended acceleration
Posted in Auto manufacturers, Technology/Product | 9 Comments »
Monday, February 8th, 2010
The sentimental favorites won the Super Bowl…at least the football game part.
Generally speaking I thought the advertising game within the game was just OK, not great. Within the automotive segment, six manufacturers stepped up for the Super Bowl:
As I said in an earlier post, the tough part about advertising in the Super Bowl is that while the football game is the primary draw, the advertising contest comes in a close second. As an advertiser you have to be willing to do work that will stand out and entertain because the very next day the “results” of the ad contest will be published in USAToday.
I always watch the Super Bowl hoping that one or more of the automobile manufacturers will break out of the category mold and amaze us. Here’s my take on the automotive commercials, from best to worst: (more…)
Tags: ad agencies, advertising, Audi, Audi of America, Automotive Retail, Chrysler, clean diesel, Diesel, Dodge, green, Hyundai, Kia, Mercedes Benz, Super Bowl, Volkswagen, VW
Posted in advertising, Auto manufacturers, Communications, The Agency Business | 5 Comments »
Friday, February 5th, 2010
Toyota is in deep stuff given the allegations of unintended acceleration, several huge recalls that will cost BILLIONs of dollars, continuing investigation by NHTSA, civil penalties, reduced sales, weakening brand image scores and deflated residual values.
There has already been plenty written about the impact of this on Toyota’s brand reputation. It certainly is going to set them back, some pundits say it’s a “speed bump” for Toyota, others say the situation will effectively “kill” the Toyota brand. I suspect that the “truth” will be somewhere in the middle, the Toyota brand has been damaged, it will take a good deal of time and effort to recover, but it will recover.
Rather than debating the current health of the Toyota brand, I’ve been thinking about the discipline of branding in the automotive category and what its practitioners can learn from Toyota’s experience. Certainly the need to manage the media and to do so in a transparent way is critical. Time is of the essence, the internet can take your reputation and spin it out of control in a heartbeat. Beyond the crisis management learnings, I think that we are seeing the danger of having a brand that is based solely on rational underpinnings. (more…)
Tags: advertising, Audi, Branding, positioning, Strategy, Toyota, unintended acceleration, Volkswagen, Volvo, VW
Posted in advertising, Auto manufacturers, Branding, Communications, Strategy | 9 Comments »
