and one with a grade:

According to the EPA’s website the “EPA and the National Highway Traffic Safety Administration (NHTSA) are updating this label to provide consumers with simple, straightforward energy and environmental comparisons across all vehicles types.”

Fair enough, after almost thirty years with very little updating, it’s probably time to make some improvements to the industry’s new car stickers.  I’m all for providing consumers more and better information to enable them to make the vehicle purchase decision that is best suited to their needs and desires.  I doubt that anyone in the industry would disagree.

Here’s the rub, the option with the letter grade is a not too thinly veiled attempt on the Government’s part to pass a value judgment on your decision to purchase a vehicle. Should you make the decision to purchase an EV like the Nissan Leaf you’ll get an A+.  Should you choose to buy an “average” car like a Toyota Camry (the most popular car in the United States) you’ll get a B-.  Should you have the temerity and the cash to buy a Mercedes-Benz Maybach 57 or a Ferrari 599 GTB Fiorana you’re going to get a D+ from the Feds.

This is an attempt to coerce consumers to buy vehicles that the government deems more responsible (e.g. EVs). Buy a vehicle that the government considers responsible and you’ll get a better grade and not be subject to ridicule from your peers.  If you make the wrong choice, you’ll get a bad grade and people will be talking behind your back.

The auto industry has reacted:

“Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers, an industry group, said the rating system “falls short because it is imbued with schoolyard memories of passing and failing.” (NYTs 8/30)

“Automakers questioned the proposed letter grades, saying it might affect sales.”  (Freep.com 8/31)

Ironically, that’s the point.  The government wants to “affect sales” and they’ve decided that telling us if we’re “passing or failing” is a good way to get us to make the right “choice.”

By all means provide more information and data for consumers to consider while making a vehicle decision.  Make it easy to understand, enable comparisons between vehicles based on MPG, emissions and potential fuel savings.  This is all good, well-intended information, that should be available to consumers for consideration. But the Feds should not be passing judgment on consumers’ choices.

Well-informed consumers will make good choices for themselves and their families.

Rather than spending time grading our vehicle choices, our politicians could spend our tax dollars more wisely by developing a coherent energy policy.  That would be a real step forward and address the real problems rather than the symptoms.

If you would like to weigh-in on the new window stickers, the EPA is asking for consumer input at:

http://www.epa.gov/otaq/cert/mpg/index.htm   Click on “Submit comments.”

In the meantime, I’m starting a new business, I’m going to manufacture and distribute large red letter grade decals, “C” and below, that the automotive Hester Prynnes among us can proudly display on our vehicles.

That said, it’s a good time to pause and take a deep breath, because as so often is true, it’s not what you do but how you do it that matters.

Today’s New York Times has an article headlined: “With Toyota in trouble, rivals gain.” Manufacturers are offering incentives to encourage Toyota owners to come in their stores, trade-in their Toyota for a new whatever. Supposedly these incentives are not being widely advertised and dealers are being encouraged not to “try to take a predatory stance in this type of environment.”  According to GM and others, their dealers have requested incentive support.  Of course they wanted incentive support, there’s blood in the water.

There are a couple of good reasons to push back against this knee jerk reaction to offer incentives.

First, while it may be Toyota’s turn in the barrel today, next month it could be any of the competitors.  Today’s vehicles are incredibly complicated, with more computing power, millions of lines of code, electronic almost everything.  Every manufacturer will have recalls, most minor, but there’s always the possibility of something major. They’re all living in glass houses.

The second and more important reason not to immediately use incentives is that you don’t have to.  I have read article after article that has reported that Toyota values are dropping.  Dealers who have historically sold Toyota’s for $1-2,000 over invoice are selling cars at a loss.  So the customers who are now looking for an alternative to their Toyota, are people that paid full whack when they purchased it. These folks aren’t looking for the best deal, they are looking for the best car, one they can count on.  Now is the time to sell your product based on it’s merits, not the deal.

Detroit has long lamented that the need to offer incentives has crippled them financially.  Most have gone on record in 2009 saying that they were not going to use incentives as much.  So what happens when circumstances create an opportunity, they’re offering incentives!

The irony is that Ford and General Motors have really got their product act together, they are building excellent cars.  Cars that are capable of competing with Toyota. For the only time in recent memory Toyota owners might actually be “open” to another brand and the first thing we’re going to do is sell them a deal rather than selling them on the virtues of the product.

Toyota’s troubles are an opportunity for its competitors to build credibility and their stature as first tier manufacturers.  Unfortunately it seems that old habits die hard. The all consuming desire to drive volume today will prevent the companies and their dealers from behaving in a way that will build their reputations for the longer term.

That’s a missed opportunity.

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.

He posits that one of the issues with “branding” as a marketing discipline is that we lack an agreed-to definition, which subjects it to interpretation based on circumstances or agendas.  He closes by saying that agencies and marketing services firms need to more tightly define branding:

“If we don’t address this, we could be perceived as an industry made up of people who don’t know how to define what it is they’re not supposed to do.  As Grouch Marx would have told us, ‘These are my principles; if you don’t like them, I have others.”

Leaving aside the issue of agency credibility, the automotive industry needs to dedicate itself to building or re-building its brands. Manufacturers who do will succeed in the hyper-competitive “new normal” automotive marketplace, while those who don’t will languish.

The automobile business has traditionally had a shaky relationship with the idea of “branding.”  Programs designed to define or position the “brand” are often perceived as the “soft” part of automotive marketing.  This perception is in contrast to the marketing specifically designed to drive traffic to the stores or in industry parlance “make the doors swing.”  Often manufacturers feel that they have to choose between “branding” and “retail” and more than often than not they choose retail.

I think that part of the problem with the discussion of “branding” in the automobile business is that it most often devolves into a discussion of advertising, as in “this is a brand ad, that is a retail ad.” Brand ads are the ones that attempt to speak to a company’s “values” whereas retail ads feature “product, place and price.”  This either/or conversation is specious and has led the industry to it’s current situation, products that are perceived more like commodities and customers who focus on pricing.

Let’s be clear, in the “new normal” automotive market the traditional brand vs. retail discussion is a path to commodity status, decreased sales, decreased profitability and the loss of already weak brand equities.  The truth is, every successful automotive competitor will do both jobs, build brand leverage and make the doors swing.

The marketing conversation needs to start in a different place and I agree that it needs to start with a definition of what we mean by “brand.” While I’m sure there are more complicated answers to the brand definition question, I would like to suggest that the automobile industry would be well served by a simple approach.  A great automotive brand is a promise made and kept.

Nothing new here, right?  The idea that a brand is a promise made and kept is as old as the hills.  Defining what we mean by brand is pretty straightforward, the hard part is figuring out what a particular brand’s promise(s) is/could be and then making sure that it is “kept” at every consumer touch point consitently over many years.

Certainly the execution of a brand promise is more complex than ever, there are literally thousands of consumer touch points (ranging from the internet all the way through to the dealer salesperson). That’s why it is so critical to make a commitment to a promise(s) and not waver from it.  Our industry has several notable brands that lost sight of their promise and have been forever weakened (Volvo is a great example, even mighty Mercedes-Benz is not as well defined as it once was).

Toyota is currently battling a product quality issue that has resulted in recalls and the extraordinary step of stopping production and sales of eight models.   This is an assault on Toyota’s promise of quality and reliability.  How Toyota handles these recalls will define their brand going forward, will they handle their customers in a high quality, trustworthy (reliable) fashion?  If they do, they will build their brand, if they don’t they will break their promise to their customers and the brand will be weakened.

The brand promise should drive everyones’ behavior, from the dealer’s Service Tech all the way to the CEO (including agencies and other vendors).  Everyone is responsible for representing the promise and keeping it.  Of course, marketing must be charged with making the promise clear and demonstrating that it is kept.  All of this is easy to say and very difficult to implement given the overwhelmingly complex marketing environment we all operate in.

But it is impossible to implement if the brand’s promise changes or is subject to revision based on short term needs.  The automotive industry is guilty of thinking that its brand promises are adjustable. This is like saying to your angry significant other whom you told that you would be home at 7pm and you’re 45 minutes late: “I didn’t really mean 7pm, I meant around 7pm so I’m really not late.”

Promises consistently made and kept build trust, promises broken destroy cedibility.  Automobile manufacturers need to get clear about the promises their brands are making and then create alignment with all constituents responsible for keeping the promise.

The companies that dedicate themselves to making a brand promise and keeping it will be the long-term winners in the “new normal” automotive marketplace.  Those that don’t will be destined to commodity status with pricing as the only differentiator.

Here’s what Robert Gibbs had to say about Cash for Clunkers:

“It’s good for dealers and auto manufacturers, it’s good for our energy security and our environment.”

Like most “spin” there is an element of truth in all these claims but not as much as the claimants want us to believe.

Let’s begin with the environmental claim and the inference that the Cash for Clunkers program is making headway in the fight against global warming.  Yes it is true that a few relatively “dirty” vehicles are being taken off the roads and replaced with new “cleaner” models.  This is surely a good thing to do, but it has virtually no impact on the environment and it certainly has no impact on global warming.  The number of vehicles being traded in is a drop in the bucket.

I’m willing to give the spin-meisters the fuel efficiency claim.  It is certainly true that relatively inefficient vehicles are being traded in for more efficient models.  Of course that was the requirement to get your fellow taxpayers’ $4500, so let’s hope that it was accomplished.  That said, the “energy security” claim is pure political BS.  Again, too few cars, with too little efficiency gain to reduce our consumption of foreign oil in any meaningful way.

Finally, there is the implication that the program is helping pull the car companies and dealers out of the recession.  It is certainly true that traffic is up and the sales rate has improved.  That seems like a good thing, but is it really helping the manufacturers and the dealers over the longer term?

The fact is the government put into place a big incentive program; just like car companies have been doing for years.  Incentive programs don’t add incremental industry sales; more often then not they pull sales forward.  There will certainly be those instances where a person who probably would have bought a used car, will buy a new car, but those will be few and far between.  Cash for Clunkers has gotten some folks off the couch who were holding off buying a vehicle but there is a body of opinion that says they would have come into the market anyway.

I’m afraid that we will eventually learn that Cash for Clunkers has mortgaged the industry’s 2010 sales in favor of a couple of good months in 2009.

On balance, the Cash for Clunkers program seems to me to be another easy to sell program that provides the spin-meisters with “proof” that the Administration and Congress are getting something done.

If they would really like to have a positive impact on the environment, help consumers make better vehicular choices and enable the auto industry to create a profitable future for itself, their time would be better spent developing a coherent energy policy for our country that actually makes sense.  An energy policy that’s takes on the politically tough stuff like gasoline prices and the real culprit behind our country’s contribution to global warming, our use of coal fired electrical plants.  That would really make a difference for all of us.

Here are a couple of links to some good articles that will help you make sense of the spin:

In the New York Times:  “Cash for Clunkers by the numbers”

From the Wall Street Journal:  “More Cash for Clunkers”

This week it was announced that Roger Penske had cut a deal to buy the Saturn brand from General Motors.  What a terrific development for Saturn and the Saturn brand.

A few weeks ago I was with a GM marketing guy and he made the observation that “you can tell that finance guys made all the decisions about the future of GM, because marketing folks would have kept Saturn and Hummer.”

The point he was making is that a marketing person would have recognized the inherent value in the Saturn and Hummer brands.  It looks like Hummer is going to get a second chance with a new Chinese owner and it remains to be seen if Hummer can successfully navigate changing consumer sensibilities to build a solid and profitable business in the US.

Saturn on the other hand grabbed the brass ring.

Much has been written about how Hal Riney created a great automotive brand image for Saturn and how years of product neglect by GM made it impotent in the marketplace.  Most recently Saturn has gotten some new product which is highly regarded and that has helped immensely.  The Saturn distribution network has always been one of the industry’s best and now they have the Penske organization behind them.

Penske understands what it takes to be successful.  The fact that they bought the Saturn brand and distribution network while dodging the factories speaks volumes.  Saturn will now get product from any number of international manufacturers and not have to deal with the GM cost structure.  Sounds like suddenly Saturn may be able to do something it never could under GM…make a profit.

That’s great in and of itself, but here’s the thing I’m excited about.  This is a chance to resuscitate and reinvent the Saturn brand.  It’s a chance to make it the powerful force that it could have been years ago had it not been neglected.  What a great opportunity for all the people involved with Saturn and Saturn marketing.

As a marketing guy, I think you’d be hard pressed to find a more exciting automotive job than as part of the Penske team that will rebuild the Saturn brand.

Sign me up, rebuilding the Saturn brand would be a great gig.

As an industry we’ve lost sight of our great brands.  In some cases companies have gone bankrupt or been acquired and a brand disappeared, in others a world war got in the way.  Studebaker, Cord, Horch, MG, Triumph and countless others have evaporated for a variety of reasons.

Today, as Detroit goes through an unprecedented upheaval, there will be more brands lost.  Saturn, a once very special brand, will go away.  So will Pontiac and Hummer.  We can only wonder what will happen to brands like Jeep.  Brands that stood for something, had a point of view, and marketed products that reflected a certain perspective.  Brands that developed a loyal following because they stood for something!  They weren’t for everybody, and that was OK.

As discouraging as it is to see a great brand go away because of a structural change in a company, it’s worse to see brands die of neglect by the very people charged with protecting and building them.  Over the last 20 years we have watched a number of great automotive brands that automotive marketers worked very hard to create, begin to whither away.  The aforementioned Jeep is one, Volvo another.  Mercedes Benz, Jaguar, Land Rover, SAAB,  Lexus and even mighty BMW feel somehow “less” than they did even ten years ago.

What’s happened?  Expansion happened.  Chasing volume happened.  Brands that meant something specific and clear found themselves needing to be “more.”

For example, it wasn’t enough for Volvo to stand for safety.  They thought they couldn’t sell 200,000 units in the US based on safety alone, they needed to be more exciting, they needed performance added to their brand positioning.  I’ll bet if we asked someone at Volvo today, they’d love to be a 150,000 unit “safety” brand.

Mercedes Benz, while incredibly successful in the US, was once “Engineered Like No Other Car In the World.”  That wasn’t enough either, it always irritated Mercedes Benz that Volvo had grabbed the “safety” positioning when Mercedes Benz automobiles were at the time considered safer.  So they made sure that “safety” played a big role in communications for a period of time.  Oh, and then Lexus came along and engineered an exceptional car, so the long standing Mercedes Benz tag line wasn’t supportable any longer.  And as Lexus‘ sales grew at a meteoric pace in the early 90’s it was clear that Mercedes Benz could and must sell many more cars too.

All these brands saw an opportunity to expand volume and felt that their well defined positionings from the ‘70s and the ‘80s were “limiting.”  So they expanded their positionings and forever weakened their brands.  Consumers were once convinced that if they bought a Volvo, it would keep them safe.  They knew for certain that if they bought a Mercedes Benz they were buying the best engineered car in the world.  If you bought a Land Rover you bought a vehicle capable of going anywhere with an unparalleled level of luxury and utility.

BMW, while it has been the best of the bunch at sticking with their fundamental positioning of “The Ultimate Driving Machine,” has expanded so dramatically over the last ten years that it’s difficult to say it has kept its well honed differentiated competitive edge.

Here’s the truth about all of these brands.  They all make terrific products that offer fabulous engineering, safety, performance, luxury and prestige.  Historically, what differentiated these brands was where these brands started the conversation with consumers.  Mercedes Benz always spoke from an engineering point of view, Volvo from safety, BMW from performance.  As a owner you got a well engineered, high performing, luxurious and safe car but all of that within the brand’s differentiating perspective.  Unfortunately, today the differences in brand perspective are less identifiable.

So, where does this leave us?  It leaves us with a bunch of homogenized brands.  Brands that are not as leverageable as they once were.  Brands that are weaker.  The good news is that the baby boomers grew up when these great brands were established in the ‘70s and ‘80s, they still understand the fundamental positionings and keep them in the public consciousness.  The bad news, the baby boomers, who have fueled the expansion of these brands, are entering the phase of their lives where they won’t be buying as many cars.

Which finally leads to my real question, who will teach the next generation of automotive buyers what these great brands stand for?  Are we going to let these great automotive brands slide into a homogenized future where every car is a good car and they’re more alike than different?

There’s a whole new generation of automobile buyers entering the market and they don’t understand these great brands because the marketing over the last fifteen years hasn’t differentiated them.  Auto marketers and their agencies would do well to teach this generation what their parents already know….that there are differences between these automotive brands and that’s what makes them desirable.