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:

However, I turned to the other half of the display and was profoundly disappointed by one of the key AreaA1 marketing ideas:

What you’re looking at is an Audi “Art Car” painted by Damien Hirst. The “art” was fantastic (my photography is not) but it still left me wondering “why?”  Why would Audi commission an artist to paint a car when their most direct competitor did it first and has done so many times.  Why would Audi copy BMW?  Why would a brand that has worked so hard to earn a seat at the Tier 1 luxury segment table do something in marketing that screamed “look at us, we’re just like BMW!”

According to Wikipedia, a BMW was first used as a canvas in 1975 when French racecar driver and auctioneer Hervé Poulain commissioned Alexander Calder to paint a 3.0CSL:

Since 1975, BMW has commissioned 17 different artists to create “art cars.”  I think it fair to say that by now BMW “owns” the concept of art cars in the luxury segment. Wikipedia even has an entry entitled “BMW Art Cars.”

That isn’t to say that other luxury marques should not somehow participate in the arts. After all, Mercedes-Benz famously commissioned Andy Warhol to create a series of artworks.  But Audi, one of the industry’s most innovative and progressive companies should find its own way of connecting to the arts, not simply copy BMW.

Unfortunately Audi of America fell into the same trap when it sponsored Art Chicago in 2007. Audi introduced the Audi RS4 Art car created by Brazilian-born Pop artist Romero Britto:

When a competitor has consistently over time used a particular tactic and has become well known for it you can’t differentiate your brand by doing the same thing. You will simply communicate that you are just like the other guys and probably do more to build their brand.  You don’t build a distinct and special brand by copying a competitor.

Having said that, Audi UK’s art car was subsequently auctioned off at Elton John’s charity event for about $525,000, the proceeds will go to the Elton John Aids Foundation.  That might be the only good reason for Audi to copy BMW marketing.

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.

Already critics are saying Hyundai cannot compete with the Tier 1 luxury marques; Mercedes-Benz, Lexus, BMW and arguably Audi. Hyundai announced that they would not open a separate luxury franchise; instead they will sell the Equus in their existing showrooms. This announcement was met with cynicism.  Traditional thinking says that a Tier 1 luxury brand needs its own stand-alone franchise/stores, and that luxury customers, particularly in the D-segment, want to be coddled in Taj Mahals built as shrines to their brand of choice. Luxury customers certainly don’t want to be shopping for or servicing their cars in the same place as mass-market customers…e.g. a Hyundai dealership.

This conventional thinking assumes that the only way Hyundai can succeed in the luxury segment is to follow the Lexus model and become a Tier 1 luxury brand.  I think Equus will be a success and will re-write the rules of D-Class luxury.  Hyundai won’t be a Tier 1 luxury brand; they will be a new form of luxury.

Americans’ perception of luxury and prestige is changing.  Some argue that the near collapse of the financial markets and the recession have changed our sensibilities forever.  Last year, the Wall Street Journal reporter Matthew Dolan was interviewed and commented that Americans have moved from “conspicuous to careful consumption.” He went on to say that “the luxury of the past is not the luxury of the future.”

Hyundai will certainly take advantage of these changing sensibilities but that’s not the only reason they will succeed.   There has always been a segment of the car buying population that wanted the engineering and quality of the luxury segment but wasn’t interested in the “prestige” image.  These folks didn’t want to overtly make a statement; they were looking for something subtler, something that made sense to them. The traditional trappings of Tier 1 do not drive them, they are looking for a quality product and a reasonable value. For years they bought Audis and thought that they had a made a “smarter” choice than their peers who bought Mercedes-Benz, BMW or Lexus.

Changing perceptions of luxury and an ample number of people interested in a quality luxury automobile but not in the “badge” marques will offer more than enough opportunity for the Equus.  This combined with Hyundai’s increasing reputation for quality, some decent marketing and reasonable pricing should be more than enough to gin up floor traffic for the Equus.

But that’s where the battle will begin for Hyundai and the Equus, it will either succeed or fail based on what the customer experiences as they walk into the showroom.

These consumers are not the traditional Tier 1 D-segment customers and they won’t worry that they are going to a Hyundai store to look at a $55,000 luxury car.  I think they’ll get beyond that fact that their luxury car is in the same showroom with a model that starts at less than $10,000.   I don’t think they’ll mind sitting in a less sumptuous lounge while they’re waiting for service and probably won’t care if espresso isn’t available.

What will make or break the deal is how they are treated when they walk in the door.  If they are greeted by a knowledgeable professional who is well trained and can accurately sell the virtues of the Equus versus its competitors in an interesting and informative way, that will be a good start.  If the showroom is bright, uncluttered and the product conveniently on display that will help.  If they see a customer lounge that is comfortable and clean with free Wi-Fi and a decent high definition television that will create the right impression.  In short, if they see a customer focused environment, staffed with quality people who are focused on the customer’s needs, I think they’ll fore-go the usual Tier 1 frills in favor of a top-notch vehicle at a reasonable price delivered and serviced by competent pros.

The only question for Hyundai is can their dealer body deliver that customer experience.  Recently I was at my local Hyundai store with my son who was in the market for a car.  The salesman that helped us knew little about his own products let alone the competition.  All he talked about was the 10 year, 100,000 mile warranty, the Assurance program and the price.  We had to go outside to see the car we were considering and there was no offer of a test drive. That won’t fly with a D-segment car.  The dealers are going to need to significantly up their game.

If they do, I think Hyundai has a good chance of succeeding with the Equus and possibly becoming Mathew Dolan’s “luxury of the future.” But it’s not about “becoming” Tier 1, nor is it about providing the traditional trappings of “prestige” automotive brands. It’s about recognizing that there’s a new sensibility, a new perspective on luxury and meeting the expectations of these customers. It’s a great opportunity to re-invent a piece of the luxury segment.

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?

Coming out of a deep recession, it makes sense that price point will be critical.  But eventually, consumer confidence will return and what, other than price, do we want consumers to consider?  What will create preference and support higher margins?  This seems a good time to step back and evaluate the current state of our automotive brands and evaluate them against a new generation of potential prospects.   Our industry’s brands are not what they once were.

Many once great automotive brands have been allowed to slip into an amorphous state.  In the 90’s as manufacturers chased volume and sought a bigger share of the then expanding pie, it was no longer enough to stand for one thing, they needed to be more things to more people.  This led to communications that were less clear, less defined and the process of weakening great brands began.

If you doubt the veracity of this statement, look at the luxury segment of the category, Volvo, Mercedes Benz, BMW, Jaguar, SAAB were once clearly positioned brands that stood for something.  Many among us can still rattle off these brands’ core values.

• Volvo—safety
• Mercedes Benz—engineering
• BMW—performance
• Jaguar—design and performance
• SAAB—individuality
• Porsche—performance sports cars

For a long time the majority of consumers gave these brands credit for these values despite product and communications that seemed to go in other directions.  But now the problem has come to roost, there’s a whole generation of prospective customers that don’t know what these brands stand for, they weren’t alive when the seminal advertising that positioned these brands was running.

What to do?  Here’s a suggestion, form a small team of senior level marketing folks (independent consultants, agency partners) who are talented, understand brand building and the automobile business.  Make sure they are willing to commit themselves to genuinely understanding your brand in all its glorious detail and let them loose.  Tell them you want ideas that will clearly position your brand to a new generation of car purchasers who are a blank canvas.  Ask them to execute the idea across all media channels.  Ask for ways to use social media to create communities around your brand that take advantage of the enthusiasts who understand your brand so that their knowledge can educate the new generation.

Consumers are coming back into the stores, but most are coming back to get a good deal.  Manufacturers and their agencies need to re-build their brands.  With younger customers, they need to build them for the first time.  Incentives train people to buy based on the deal and consider the products commodity-like.

In a category where it is now difficult to buy a “bad” vehicle, the threat of commoditization is very real.  A strong desirable brand is the only thing standing between a manufacturer of differentiated products and a supplier of generic transportation.

Please let me know what you think.

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…. Jaguar dropped from the 1st spot in 2009 to 23rd.  Given Jaguar’s long standing reputation for iffy quality, that’s certainly not a good thing from their perspective.  Audi also took a hit dropping from the 12th spot in 2009 to 26th in 2010, but my guess is this year will prove an aberration.

Personally, I think it is exciting to see Buick up near the very top and Cadillac well above average.  These brands have their product act together, now marketing needs to pull its own weight.

This year’s study and the jockeying for position proves something I have been telling people for a number of years:  In today’s market, it’s tough to buy a bad car.

Download the JD Power press release

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.”

For example, in a part of the world where station wagons (called “Estates” and sometimes “Avants”) are enormously popular, Cadillac has a terrific entry in the CTS Sport Wagon.  Ironically, in the U.S. the CTS Sports Wagon is expected to be a niche product at best, I bet it could be the brand’s best seller in Europe.

Here’s the challenge for Cadillac in Europe.  Quality.  European luxury car buyers have become accustomed to a very high quality standard and expect it to be met.  If Cadillac can meet this expectation, then I think they will be a successful niche brand and could probably expect measured year over year growth.  Long-term, they will need to figure out how to offer a diesel, but initially I think they can get the ball rolling without one.

The industry needs more niche brands and I’ll bet Cadillac can have a very nice piece of business in Europe, as long as they keep their volume aspirations in check.  Ultimately, that may be the biggest challenge of all.

Please comment below, I’d love to know what you think…

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:

“Holman Jenkins is 100% correct in “Trial Lawyers vs. Toyota” (Business World, Feb. 26).

I taught at BSR Advanced Driver Training at Summit Point Raceway in West Virginia for about 20 years, teaching counterterrorism, motorcades, racing, high performance driving and car control techniques. Almost invariably, unintended acceleration was a major problem caused by the driver thinking he is on the brake rather than the gas in an emergency situation. His foot is planted firmly on the gas and his brain is firmly in panic mode and therefore his brain function is zero.

As far as braking, many drivers come completely off the brakes when the ABS kicks in since the perception is that something is wrong with the brakes. Also, many drivers do not brake hard enough.

The majority of accidents are caused by the driver, not the vehicle. In America we teach drivers to pass the driver’s test, not how to drive a car. We want a risk-free world and we’re not going to get it.

Toyota’s problems are more examples of the power of suggestion and mass hysteria then they are of faulty electronics.

Yes, things can go wrong mechanically, but that is very rare, and most of the time it is the driver’s fault. However, we rarely take the blame or the responsibility when we do something wrong; it’s blame the other guy and sue.

The press, politicians and public are all blaming Toyota for faulty equipment, yet there is plenty a driver can do when faced with an emergency. Most drivers really aren’t that skilled. Airline pilots are required to practice emergency maneuvers every six months, yet driving is far more dangerous than flying. Most drivers have no clue about what to do when something does go wrong. How frequently does the average driver practice for emergency situations?

As another driving instructor has said, “A meteorite hitting your car is an ‘accident,’ everything else is driver error.”

Miriam Schottland

President

DriveLab

Washington”

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:  

I think Audi was the automotive standout this year.  A lot of industry veterans would have lined up to say that advertising a diesel on the Super Bowl was a waste of money because Americans don’t like diesel. As they have done for the last year, Audi takes on America’s perception of diesel.  Audi recognized that Americans are interested in being environmentally responsible but at the same time find the “green movement” a bit over the top.  The “Green Police” was a nice idea with enough oomph to do well in the ad contest.

Volkswagen’s “Punch Dub” commercial was the second best automotive entry. While it was a little bit more of a traditional car commercial, I thought it was fun to watch and did a nice job of illustrating the breadth of the VW product line with the warmth and humanness that we’ve come to expect from VW.  The Stevie Wonder ending was a master stroke.

I know that Hyundai’s ads introducing the new Sonata will be criticized by the advertising industry as “expected.”  Despite being more traditional category commercials, I think that they did a good job of making specific points that communicated an overall sense of quality engineering.  Better quality paint than Mercedes-Benz and the idea that the car is “handmade”   spoke to quality while the film itself made the product look terrific.  These ads won’t win any advertising awards, nor did they do well in the ad contest, but they got their message across and the product looked great.

The Dodge Charger commercial was certainly a departure from the category norm, particularly for Detroit. Some have said that they thought advertising the Dodge Charger (high performance/in-efficient) seemed out-of-step with current societal sensibilities. Perhaps, but I was left wondering if the notion of the “hen-pecked” male was even more out-of-step.  I hope that there is a segment of the male population who will identify with this commercial and go buy a Dodge Charger to affirm their manhood.

I sincerely hope that Kia’s execution appeals to young families as intended. While entertaining, I found the commercial silly and didn’t learn anything.

Honda’s ad for the Crosstour seemed forced, although I got the point that it offered a a level of utility in a sporty package.

Overall, my take is that VW, Audi and Hyundai made good use of their Superbowl investment, the others did not.

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.

Toyota’s reputation for bulletproof quality and reliability is a completely rational positioning.  Combine that with bland design and you have automobiles that many in the industry deride as “appliances.”  Consider your refrigerator.  It sits there, does its job remarkably well, demands no attention at all…unless it breaks and then it’s a disaster.  Sounds like a Toyota.  As long as nothing goes wrong with your refrigerator, you will probably remain likely to purchase the same brand again, if you have problems you will defect to another brand.  Ultimately, this is how Toyota will measure the strength of its brand…how many customers defect.

Unfortunately for Toyota, it is very easy for customers to defect from a brand that makes a very rational promise that is subsequently broken.  Bullet proof quality and reliability is a wonderful promise until you break it and you have nothing else to act as a backstop while you solve the product problem.

The backstop for some brands is an emotional connection and promise that is made along with a rational promise.  Volvo’s safety positioning is a classic example of both rational and emotional components working together.  Volvo certainly has all the engineering and technologies (rational) that support the promise of a safe car but it also promises us the peace of mind (emotional) of knowing that we’re keeping our loved ones safe:

Volvo is certainly not immune to product quality problems but their customers don’t immediately defect at the first sign of trouble.  Volvo customers will give their brand a break because they believe in their hearts that their Volvo keeps their family safe. Talk to anyone who has owned more than one Volvo and you will feel their commitment to the brand first hand.

Subaru is another example of an automotive brand that is built on both emotional and rational promises.  Nothing could be more rational than the benefits of all wheel drive but that’s not all that is at the core of Subaru.  Subaru promises to help people live their lives the way they want to and in return they “love” their Subies:

How about this for carrying the emotional promise of the Subaru brand to the retail level:

Subaru has certainly gone though a few rough patches from a product point of view but their loyalists have signed on for something bigger than dependable all wheel drive, they share an emotional bond with the Subaru brand and its community.

There are other automotive brands that have connected emotionally with customers. Mini, and Audi are good contemporary examples.

I think it’s interesting that three of the brands with strong emotional connections mentioned so far (Subaru, Mini, Audi) came through this last recession with strong sales and share gains.

Historically Mercedes-Benz, BMW, Chevy, SAAB, Saturn, Honda, Cadillac and others have had strong emotional components to their positionings.  Unfortunately, for these brands it seems less true today.

Toyota has never been a brand that people connected to in an emotional way. Toyota customers aren’t passionate about the brand, they have always been rational about purchasing Toyota quality and reliability.  When quality is lacking and reliability questionable, there is nothing left, there is no overriding reason to stay with Toyota.  In a category where quality and reliability have become virtually a given, consumers were well aware that they had options and they quickly helped VW, Ford and GM have an excellent January.

Toyota has proven something that many of us responsible for marketing automobile brands have always known…the most powerful and durable automotive brands are those that are clearly positioned with both rational and emotional underpinnings.  The brands that stand for something and connect with their owners emotionally create enthusiasts and tribes of loyalists around them.  These brands’ customers give them a break when things don’t go quite as planned.

Admittedly, no amount of emotional connection is going to overcome Toyota’s serious product issues, but I do think that it buys you time and gives you a chance to make “good” on your brand promise.  It also creates the possibility of your loyalists defending your brand, there seem to be precious few actually defending Toyota.

In the “new normal” US auto industry with sales in the 11MM-13MM range, the successful brands will be those that create an emotional connection with their customers.  The lack of this emotional connection has left mighty Toyota vulnerable and opened the door to its competitors, including Volkswagen which has unabashedly stated its goal of being #1.

It will be interesting to watch Volkswagen.  In Ad Age on August 24th, as their agency review was getting started, Tim Ellis (VW CMO) said:

“Our goal of rapidly increasing our volume in a mature market requires the Volkswagen brand to evolve into a more relevant mainstream choice,”

I hope that becoming a “more relevant mainstream choice” doesn’t result in VW making more mainstream (sic boring) products and losing the emotional power that the brand has historically leveraged.

After all, no one loves their refrigerator.

By rebuilding the uniqueness of the SAAB brand they will be able to re-ignite the passion of their enthusiasts and build the business. SAAB will never be a quarter of a million unit business in the US but it can be successful.  Forcing SAAB into GM’s”success” model was the problem, now it has a second chance.

Congratulations to Mr Muller, Spyker, and SAAB loyalists everywhere. Finally, an automotive brand that will be coming back rather than disappearing.  Like Audi before it, bringing SAAB back in the US market place will be a labor of love and a “mission from God.”   Sign me up.

Lexus is concerned that their customers are too old and they are not appealing to the next generation of luxury car buyers.  A reasonable concern.

Lexus appears to be addressing this concern in the usual way that automobile manufacturers do.

First,  you add product to your line-up that is designed to meet the requirements or interests of the new target group (after all, they’re very different from the current customers),  then you lower the cost of entry into your franchise (they don’t have as much money as the current customers) and finally use marketing to convince the younger target that your brand is cool (at least cooler than they think it is).

Unfortunately, this approach always has the same result, you may succeed in selling a few more cars to the new target group but you leave your current customers confused and your brand weakened.

The Automotive News article even quotes Jessica Caldwell from Edmunds.com who says: “Lexus was really strong, but they have lost their footing….BMW is the ‘Ultimate Driving Machine.’  We’re not really sure what Lexus is.”  I agree with her. The overheated luxury segment experienced so much growth in the ’90s and early ’00s, that many of the luxury marques that were fortunate enough to have clear positionings in the beginning were weaker and less distinct at the end of the run-up.

Lexus now finds itself competing in a segment that has a third less volume than it did a year and a half ago.  Volume growth is going to come from a hard fought battle for share-of-market with the best in the business: Mercedes-Benz, BMW, Audi, Infiniti.  As Lexus moves down market into the “near-luxury” segment, more competitors will enter the fray:  Acura, VW, Volvo.  Every single one of these manufacturers is making well-designed and engineered, high quality vehicles.  More than ever, a manufacturer’s brand reputation is a key differentiator.

Now is the time for Lexus to pause and carefully consider its brand values rather than simply expand its product line to appeal to a new target group’s preferences.  What is at the heart of the Lexus brand? A few things come to mind: unsurpassed quality, comfort, quiet, sophisticated, conservative.  Rather than trying to expand what Lexus stands for, now is the time to re-focus attention on the core values of the brand and make sure that everything they do comes from that core.  Let those values drive product offerings, dealer experience and marketing.  Find a way to make your established core values relevant to a new audience.  That’s how you take an established brand and avoid “tarnishing” it.

The essence of good positioning is knowing what you are….and what you are not. Trying to be all things to all people is the death knell for a brand like Lexus.  It won’t be a question of “tarnishing the image,” Lexus won’t have an image.

If Lexus follows the industry’s well worn path to volume growth, another great automotive brand will be allowed to whither away.  In 1989, Lexus re-invented the luxury car business and established a new brand.  It was an incredibly expensive and difficult thing to do, but they did it and they did it right.  I hope they realize how easily all that good work can be undone.

In the meantime, I’ve got my BOHICA t-shirt on.

With 2009 behind us it will be fascinating to watch what each brand does with their piece of the most expensive advertising real estate in the world. The Super Bowl represents an incredible opportunity to reach the biggest television audience of the year.  Brands that have used the opportunity well, have in some cases changed their fortunes…Apple’s introduction of the Mac comes to mind:

Here’s the challenge with the Super Bowl.  The Super Bowl is not just the game that decides the NFL champion, it has become the crucible in which winners and losers are defined in the advertising business. USAToday will not only report who won the game, they rank the advertising gladiators. There’s a lot at stake for the agencies and their clients.

From the agencies’ perspective there is no bigger showcase for their work.  If your commercial is deemed one of the best then you have a happy client and a terrific new business credential.  If your commercial is among the worst then you have a client who wonders if they just wasted $3,000,000 and as an agency you’re embarrassed in front of your peers.

It will be interesting to see which of the six automotive manufacturers capitalizes on the the opportunity presented by the Super Bowl.  Which one will communicate something interesting and brand defining to the millions of people watching in a way that sends them running to their computers to watch it again on YouTube. Imagine if we had had the internet in 1984, we would have overwhelmed YouTube with requests for Apple’s 1984.

I hope this happens, the auto industry should be doing the kind of work that demands attention and gets people talking.  We market some of the most interesting and engaging products in the the world and yet the automotive advertising in the United States is so predictable.

So who will it be?  Who will do something big, bold and unexpected? Audi has done a respectable job in past Superbowls.  VW will be showing its first work from Deutsch.  In Europe, Honda’s work has been amazing (Cog and Hate Something, Change Something). Hyundai’s Assurance Program has certainly been a marketing coup for the company but the advertising will not carry the day in the Superbowl. Perhaps it will be Wieden’s first work for Dodge.

I’m keeping my fingers crossed that one of the auto manufacturers will amaze us.

As reported in today’s Detroit News, Audi of America’s Johan de Nysschen called out the current political leadership for “falling in love” with electric vehicles.  He’s absolutely right, EVs and Hybrids have become the fashionable automotive technology and Washington’s choice for the future.

The only problem is that EVs won’t make a difference for two decades.  The New York Times reported that “plug-in hybrids would not have a significant impact on the nation’s oil consumption or carbon emissions before 2030.” To be clear though, de Nysschen is not saying EVs and Hybrids are wrong or won’t play an important role in the future. What he’s saying is that Washington is picking winners and losers from a technology point of view rather than remaining agnostic, and he’s right.

Clean diesel remains the best near term technology available for reducing our dependance on foreign oil and CO2 emissions (the major cause of global warming), yet no one in Washington seems interested.  It seems that “diesel” is literally a dirty word.

There is no doubt that Americans harbor a negative perception of diesel based on experience and inadequate information.  If our government really wanted to serve the citizens, it would consider the facts of modern diesel technology and help dispel the myths. Modern diesel is as clean as gasoline, offers 25-30% better MPG and emits less CO2.  While we’re waiting for the infrastructure to develop and the financials to make sense for EV technology, Americans could be driving diesels and making a difference in oil consumption and global warming.

Diesel in America is a marketing problem.  We have to change Americans’ perception of diesel so that consumers can make the best choices.  I don’t want our government picking the technologies that will succeed, but I would like it to have a balanced perspective and ensure that the facts are available so that Americans can make the decisions that make the most sense to them.

It seems to me that being open minded about diesel technology should be easy for our politicians….

If they’d like to take on something hard, then they should consider abolishing the CAFE standards and putting in place a Federal tax on gasoline which has always been the key to getting Americans to drive smaller more fuel efficient and cleaner vehicles.

It was ironic that virtually every manufacturer was talking about EVs in one form or another, yet the much less fashionable technology…diesel…took home the Green Car of the Year prize.

Don’t get me wrong, I think some of the electric cars and concepts are fascinating.

Chevrolet showed us a production version of the Volt and spoke about the fact that there would be no “range anxiety” because of the small motor that would generate electricity to charge the batteries. Audi showed the E-tron, an electric version of the R8 with an electric motor poweringeach wheel and delivering supercar performance. BMW’s “Vision” concept demonstrated where “Efficient Dynamics” might take the brand. Mini has been testing electric cars on America’s roads and had an example at their stand.

EVs are being talked about as if they will solve global warming, reduce our fossil fuel consumption to zero and generally save the planet. EVs are the messiah of automotive technologies.

Here’s the problem, electric cars are expected to represent maybe 10% of sales by 2020. At that sales rate it’s hard to imagine the technology as a game changer from a fuel consumption or global warming perspective.

At least we have the folks responsible for selecting the “Green Car of the Year” to provide a reality check. For the second consecutive year, a diesel-powered vehicle was selected as green car of the year. Why? Clean diesel is a practical and “green” approach to transportation. It offers 25-30% better mileage, it emits less CO2 and particulate emission is now comparable to gasoline-powered technology. Today’s clean diesels meet the most stringent pollution standards and are sold in all fifty states.

The Audi A3 TDI is a terrific example of the modern clean diesel and a worthy “Green Car of the Year.”

Modern clean diesels are readily available, offer the possibility of reducing fuel consumption by a third and emit less C02 than gasoline engines. Maybe after we’re done talking about technology that won’t make a difference for another 20 years, we’ll start to talk about one that can make a difference tomorrow.

I know it’s not fashionable, but we need to change Americans’ perception of diesel because it makes sense.

Keep in mind that my family has a long history with European imports.  In fact the last domestic product we bought was a 1986 Jeep Cherokee, just before the SUV craze really took hold.

Since that time we have had Volvos, a SAAB, a Mercedes Benz, half a dozen Audis and a couple of VWs.  For the last fifteen years my family has been happily ensconced in a series of Audis. As great as our experience has been with our Audis (we still have 2 in our household fleet) I thought it might be time for something new.

Growing up in my household, my sons could not help but pay attention to the automotive industry and both of them love cars.  So as I went through my deliberations concerning a new car, two conversations with my sons illustrated the change that is about to take place in the luxury segment.  The first with my then 22 year old, who when told I was thinking about a Mercedes-Benz, dismissively said “don’t buy a Mercedes-Benz, that’s an old man’s car.”

The second conversation, this one with my 25 year old, didn’t demean the possibility of a Mercedes-Benz, but concluded with “Dad, you should take a look at the Cadillac CTS, I think they’re cool.”

Now it was my turn to be surprised.  I admit that I have impressed by the design direction of Cadillac and I certainly recognize that the product is greatly improved but  “cool” from a twenty five year old’s point of view?

For 30+ years we have watched the Europeans and Japanese recreate the luxury segment as the domestics lost favor.  Very few baby boomers thought of Cadillac or Lincoln as marques they wanted in their garage.  Mercedes-Benz, BMW and Lexus have been their first tier luxury brands of choice.   However, the preeminence of these brands is being challenged.

There are three reasons why the “Tier 1″ luxury brands are under fire:

1. The run up of luxury segment volumes over the last 10-15 years has been extraordinary making Mercedes-Benz, BMW and Lexus commonplace. In the early nineties these brands fought to break through the 100M unit level, in 2008 each sold over a quarter of a million vehicles.  It’s hard to feel that your car is special when you see it coming and going at every intersection.
2. The recession has altered Americans’ sensibilities regarding luxury. The Wall Street Journal reporter Matthew Dolan was interviewed and commented that Americans have moved from “conspicuous to careful consumption.”  He went on to say that “the luxury of the past is not the luxury of the future.”
3. We have a new generation of luxury segment purchasers entering their high earning years and they have different perceptions of BMW, Mercedes-Benz and Lexus than their parents do.  This generation dismisses Mercedes-Benz as another generation’s car in the same way we dismissed Lincoln and Cadillac thirty years ago.  They now look at Cadillac and think it’s pretty cool.

These three factors sound to me like the recipe for a sea change.  The “prestige” marques have become too common, Americans don’t want to show their wealth in an ostentatious fashion and new buyers are open to the possibility of “new” brands.  Audi is taking advantage of this shift.  I think VW, in a slightly different way, is well positioned.

Perhaps most interesting is the possibility of a resurgent Cadillac, could it become a new generation’s marque of choice?

Audi of America has stepped up and taken on America’s negative perception of diesel technology.

Take a look at this video:

Then the commercial:

Changing American’s perception of diesel is a monumental task but one that will yield remarkable benefits.  Diesel offers the opportunity to immediately reduce our consumption of oil, reduce emission of CO2 and get better mileage.  Diesel can help manufacturers satisfy the new CAFE standards.  All this from a proven technology that is well understood and available today.

Diesel needs to be part of the energy solution of our country.    I know that it is far more fashionable in Washington to discuss plug in electric vehicles but those technologies are years away from broad-scale commercial viability.

Clean diesel is here today and can contribute immediately to   reducing our dependance on foreign oil, reducing one of the major gasses that cause global warming, give consumers 20-30% better milage and a motor that will last longer!

Diesel is a “win-win” for the consumer, the automobile manufacturers and our country.  All we need to do is update America’s perception of the technology.

Good for Audi of America for trying to change our perception of diesel.  I hope they succeed, that would be good for all of us.