Posts Tagged ‘BMW’

Deja vu all over again, here comes the VW Phaeton.

Thursday, January 29th, 2015

Just yesterday Automotive News had an article that reported that amidst a cost cutting drive, Volkswagen has decided to re-introduce the uber expensive Phaeton model:

“…the “people’s car” maker plans to spend millions of euros upgrading a money-losing luxury sedan.”–Automotive News 1/28/15

The blogosphere has erupted with any number of industry observers pointing out the illogic of re-introducing an Mercedes-Benz S-Class competitor when you have announced that you’re cutting costs and, oh by the way, the Phaeton has been a huge money losing proposition ever since it was introduced at the 2002 Geneva auto show:

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I acknowledge the inconsistency of an austerity plan side by side with a re-jiggered luxo-barge but I admit to being a bit fascinated with the idea of the Phaeton.  The last time we went through the “we’re bringing the Phaeton back” phase was in 2009, right after the end of the great recession. At the time I wrote a post (“Has the VW Phaeton’s time come?“) and offered up the possibility that the Phaeton could be the luxury car for a new post recession sensibility.

I still think that possibility still exists, but the surging millennial generation adds a different twist to the idea.  After all, so many millennials grew up driving Volkswagens and we know for a fact that VW holds a special emotional place in American culture.  In five years millennials as a generation will be driving luxury segment sales. I think about a new generation of luxury car buyers, who are emotionally attached to the VW brand, who want to naturally separate themselves a bit from their parents and their parents’ luxury car choices (Mercedes-Benz, BMW, Lexus) and I say to myself that’s an opportunity!

Boomers were never going to drop $65 large on a VW, they remember the original beetle, and VW as an economy brand.  The millennials don’t have that institutional memory, for them VW is Jettas, Golfs, and Passats that were actually premium priced relative to their competitive set. Is it really such a stretch to think that this new generation of luxury car buyers might consider and buy a large luxury entry from VW? (more…)

Until now, Cadillac has proven the adage: “Nothing hurts a bad product more than good advertising.”

Tuesday, December 10th, 2013

This morning Cadillac introduced a new campaign from its new agency (Adweek 12/1013). The good news is that for the first time in a decade and a half, the product is as good or maybe better than the advertising.  The new ATS and CTS are getting rave reviews from the industry pundits and there seems to be broad agreement that finally, the Cadillac product is up to the job of moving the brand into the rarified air of Tier 1 luxury where Mercedes-Benz, BMW, Lexus and Audi compete.

The Cadillac brand has been through a lot of marketing fits, starts and shifts over the last decade and a half. Messaging has been inconsistent and no real brand values established. That said, there have been some terrific ad campaigns that have gotten the brand noticed, unfortunately the product wasn’t as good as the advertising.

In the 2002 Super Bowl, Cadillac introduced its “Breakthrough” campaign (from Leo Burnett) hitting the heart of the boomer generation with Led Zeppelin:

The Breakthrough campaign really helped Cadillac get noticed again after years of being ignored by boomers who were buying Mercedes-Benzs, BMWs, Lexi and Audis.

In the mid-2000s Cadillac changed agencies (to Modernista) and produced this commercial for its “Life. Liberty. and the Pursuit” campaign:

In 2008, Cadillac introduced Kate Walsh as a spokesperson and raised a few eyebrows:

(more…)

“People don’t buy what you do; they buy why you do it.”

Tuesday, October 29th, 2013

Simon Sinek spoke at TED in September, 2009 and he offered this wisdom about leaders and powerful brands: “people don’t buy what you do, they buy why you do it.”

I was reminded of this in a conversation with a colleague in the automotive industry.  He asked me what I thought of his most recent advertising.  There was nothing decidedly wrong with the advertising but it fell into the trap of doing what Sinek called speaking from the outside-in.  In other words the advertising basically said we sell luxury cars that have these mildly interesting features.

I told my colleague that I felt that the advertising didn’t have a point-of-view that came from the brand and therefore it fell short of having the power to change perception.  I spoke about the need for “core values” that in turn would shape the brand’s perspective.  I suggested that he needed to find the 2 or 3 immutable truths about the brand without which it wouldn’t be the same brand.

Sinek gets at the same issue by asking:  “What is your belief? What is your cause?”  Another way to express it is: What is your company’s or brand’s ethos, what are your guiding principles?

People don’t buy what you do; they buy why you do it.

How can it be that in an industry where we expect people to make the second largest purchase of their lifetimes (a home being the largest) the “why you do it” piece of strategy gets so little emphasis.  We know this to be true because so much of the marketing in the category is uninspired.  Most of it emphasizing features and pricing in mildly entertaining executions.

But there are a few great automotive brands that do understand “why they do it.”  Mercedes-Benz, BMW, Audi, Jeep, Suburu, Lexus all come to mind.  Each of these brands have a defined “why they do it” that truly shapes what they make and at their best how they market it.

Despite from time to time losing their way, these great automotive brands always seem to come back to their “why they do it.”

Recently, Mercedes-Benz introduced their latest S-Class.  The S-Class has always been the epitome of what Mercedes-Benz represents.  True to form, the S-Class marketing overtly expresses the brand’s “why they do it:”

While I don’t love the line “The best or nothing,” it is a literal translation of “das beste oder nichts,”  the company’s “why they do it” in the founder’s own words. Somehow editing the translation seems inappropriate.

Just today Jeep announced the introduction of the new Cherokee and despite having seemingly lost their way in recent years, here comes a new campaign about the joy of adventure and exploration, values that have always been at the heart for the brand: (more…)

Do customers really want an “experience” from automotive manufacturers and their dealers?

Monday, October 14th, 2013

I don’t know about you, but I really don’t want to have an “experience” with my automobile dealer.  I don’t want my dealer to send me birthday cards, acknowledge my anniversary, or give me special gifts that reflect my personal preferences. I’m not even sure I’m open to periodic emails from the dealer or manufacturer because somehow “periodic” becomes every other day. I don’t want that kind of relationship with the company(ies) I purchased my cars from.

Yet automobile manufacturers seem intent on differentiating themselves based on “experience:”

“The need to deliver exceptional, truly differentiating customer experience has never been greater,” Steve Cannon,  CEO, Mercedes-Benz NA, Automotive News 1/21/13

“Lincoln wants customers to receive the kind of pampering, both at dealerships and online, that they would get at luxury hotels.” Automotive News 8/20/12

This is not new, the industry, particularly the luxury marques have been working on improving customer experience for years. These efforts were precipitated by the introduction of Lexus. When Lexus was introduced in 1989, the DNA of the luxury segment and the whole industry was re-arranged.

Customer service was re-defined. (more…)

Americans becoming more “European” in our automotive tastes…will wagons make a comeback?

Tuesday, July 23rd, 2013

Americans’ taste in automobiles is becoming a little more European. The fact that Ford and GM are marketing truly global cars like the Fiesta, Focus and Chevrolet Cruze with only minor modifications to reflect local tastes supports this view. Diesel, while still a tiny portion of the US market, is increasing in share of market, propelled by the efforts of VW, Mercedes-Benz, Audi and BMW.  GM has even announced that they will offer a diesel-powered Cruze in the US.

Even the hatchback, a configuration traditionally rejected by Americans is becoming more accepted:  “Five-door hatchbacks, popular among European families but long regarded as boring by Americans are catching on.  They now make up almost half the retail sales of Ford’s small Fiesta and Focus” (Financial Times).  Hot hatches like the Focus ST and Golf GTI make this segment even more appealing.

All this change is exciting and I hope that it signals a long-term adjustment in Americans’ view of automobiles.  Selfishly, I hope it will culminate in a re-appreciation of a body style seemingly lost to the sands of time…the full-size station wagon.

Europeans have a very different view of wagons, for one thing, they don’t call them “wagons,” they’re called “estates,” “Touring” or “Avants.” Just the language around the body style is better. It also helps that they have had some of the most beautiful well-designed wagons to choose from for years. For example, look at this Audi 5000 from the eighties, over 25 years old and it still looks great and feels very modern:

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For many Americans the idea of a station wagon became undesirable because of its connection to the newly suburban world of the post war years.  Most of our mothers drove a domestic version like the Ford LTD Country Squire, here’s a good example complete with faux wood, driveway and lawn: (more…)

Does the concept of “Tier 1 Luxury” have a future?

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…)

Super Bowl XLV–Will the auto industry carry the day?

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…)

Audi makes a rare marketing misstep

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…)

Hyundai Equus. Can Hyundai succeed with a D-class model?

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…)

The “Chevy” vs. “Chevrolet” dust-up. What it means for a global brand.

Friday, June 11th, 2010

The last twenty-four hours has been full of articles, blogs, tweets, surveys, all questioning the wisdom of the folks at Chevrolet who were apparently seeking to remove “Chevy” from the brand’s lexicon (NYTs 6/10/10).  Predictably, people were shocked and the Chevrolet folks accused of varying levels of insanity, some even questioning their patriotism.

Thankfully, as the day wore on, Chevrolet made an effort to explain that it had been mis-understood (see the press release) and that the memo leaked to the New York Times had been “poorly worded.” Unfortunately for the folks at GM, this whole incident has just added fuel to the fire for those folks who want to find fault with every thing the company tries to do.  If you take the GM folks at their word, what they were trying to do really isn’t crazy.

At the heart of this dust-up is a real issue.  How to most effectively manage a global automotive brand.

Here’s a video of Alan Batey explaining that indeed “Chevy” is just fine but that “Chevrolet” is the global brand:

Put aside Mr. Batey’s understandable defensiveness and his desire to assure us that “Chevy” is OK.   (more…)