Wednesday, September 2, 2015


Okay, so I’ve been blathering on about how you build, or rebuild confidence with customers, in order to develop or maintain integrity in the brand – however, there comes a point where all the players in the market improve to the point that everyone begins to share too many similarities, and now one needs to look at how you lift your head above the flock, and BE different!

In the case of Kia, it’s been vastly improved design from former Audi designer Peter Schreyer, plus excellent build quality, and a ‘no worries’ 7-Year warranty.

In the case of Hyundai, and the Genesis prestige model, it’s a case of matching every single feature offered by competitors, in terms of design, quality, on-road performance and the ‘impression’ of prestige.

Kia’s approach is conventional, and somewhat belt’n’braces, but it is already showing impressive signs of success, not only in the J.D. Power iQS, but also in rapidly increasing sales.

Hyundai’s Genesis will have to win its spurs from test drives, and building on its reputation.

I have always taken the view that the more of your cars you get out on the road, the more likely it is that the wider community will perceive the car to be successful – even if you only make a nickel of profit on each one.

Unsurprisingly, throughout my entire career in the car business I keep having arguments with the bean counters who say margin is more important than volume.

To which I say “Hogwash”. Building a brand (especially from Ground Zero), and building sales momentum, is a ‘Black Art’.
It is ALL ABOUT people’s ‘perceptions of success’; and their willingness to believe your pitch.

Providing the car delivers on the promises, and with big numbers out and about, you’re on your way to success.

You can only get there by people seeing a lot of that car on the road, simple as that.

I vividly remember when the Peugeot 605 (a very good car) was launched in Australia with a ridiculously high pricetag, forced on the importer by the export division of Automobiles Peugeot, and barely a few hundred cars were sold. 
Peugeot 605 launch - Aswan, Egypt 1990

Subsequently, years down the track, whenever you raised the subject of the Peugeot 605, most people said it was a ‘dud’ because they never saw many on the road!

When Bentley Motors was laying the groundwork in the USA for the launch of the Continental GT coupe in 2003, the company recognized several challenges. First it needed to be instantly identifiable as a Bentley. But, as far as American ultra-luxury car buyers were concerned, ‘what was a Bentley?’

As the executive team travelled the USA it used the three words ‘Power, Presence and Performance’ everywhere during the three years prior to the launch. Three simple words, which were integrated and repeated in all of the communications, whether it was dealer visits, meeting potential customers, talking to the media, or showing off the current models at motor shows.

It was great when the automotive media in the USA picked up on the catchphrase and repeated it in print.

Excerpt from Csaba Csere's column
Check the column from this link:

It was essential that the Continental GT delivered on power, performance and presence, and, just as importantly, price. Bentley Motors then played a blinder. It chose an absolute ‘sweet spot’ in the market segment and launched the car at USD$169,000!

The perception was that you got SO much car for the money, it looked great (presence), went well (power), and 60mph came up in the blink of an eye (performance). Best of all everyone knew what it was – a Bentley.

Bentley Motors North America sold out in 12 months! Getting to a higher priority on the buyers’ queue was going for up to $25 grand!

The most dangerous game car makers can play with their customers is changing how the customers recognize the Brand.

In the luxury car field, the best examples of maintaining the line with their model identification is Audi, BMW and Mercedes. If you’ve been in the market for one of their cars in the past, or now, then you know what each model (number) series stands for. No confusion.

I like to describe this status as the ‘Permanence of Identity’.

Looking back to 1998 when I first joined Rolls-Royce & Bentley Motors in the USA and began touring the country talking to car owners, potential customers, dealers and media it was very clear they knew EXACTLY what a Rolls-Royce was, but a Bentley?

Consumer Car Clinic

At a consumer car clinic in New York, a wealthy, blue-rinsed matron came up to me, and pointing her finger at the Flying B badge on the trunklid said to me: “What’s this one honey, a Buick?”

Okay, so it’s good to stand out and be instantly identifiable. But, getting back to today’s challenge for carmakers, here is one that even Volkswagen Group with all its money and might couldn't make payoff.

The VW Phaeton ultra luxury sedan.

It has bombed. Badly. It was Ferdinand Piech's grand engineering gamble to show that VW could bring together design, technology and class and present an ultra luxury sedan. The problem was the VW badge. The Phaeton WAS fantastic, but there just too much baggage in the mass-market badge for ultra luxury sedan buyers to convince them to buy it.

Fortunately for the team which created Lexus, by the early 90s in the USA the Lexus brand was instantly recognized by luxury car buyers for the two most important things it had going for it – they were highly competent cars; and if it broke, Lexus would give you a new car! No questions asked! 

BTW, not many Americans knew the Lexus LS400 came from Toyota!

P.S. Dr. Piech, maybe you should have followed the Lexus lead. But hang on, you already had Audi and Bentley on the market! So what was the point of having Phaeton? Corporate ego? Yes.

However, over the past 25 years the gaps in image, reliability, quality, support and competence has closed up, and even the much-vaunted Lexus ‘replace your car’ gimmick no longer maintains the same advantage.

As I said, the gaps have closed and quite frankly, Lexus has sunk into the mass of luxury cars available. Nothing special anymore. All its competitors have caught up. It’s now just one of the pack.

Lexus has even taken to showing 'extreme' concept designs and its current cars have a very 'in your face' grille treatment.

If the original Lexus image pitch did one thing though, it put all the other luxury carmakers on notice. Fail to support your customer, and the disappointed owner would dump you – regardless of the cost of changing cars.

American luxury car buyers speak with their wealth.

So what’s out there that separates you from the pack?

Jaguar's famed test driver, 92 year old, Norman Dewis at Goodwood Festival of Speed standing with one of Jaguar's classic XK-120s - NUB-120.
Funnily enough, it’s exactly the same thing that saved Jaguar on countless occasions – what we used to affectionately refer to as ‘The Myth & Legend’.

Jaguar classics, eras apart. Jaguar XJ-220 (top) and Jaguar XJ-13 at Pebble Beach

Potential Jaguar buyers held residual affection for Jaguar's famed history of building high performance sports and saloon cars, it was only Jaguar's chequered history of reliability which worried them.

Jaguar XJ launch party, Pebble Beach 2010
Russell Turnham, an Aussie with years of Jaguar marketing experience behind him once said that potential Jaguar buyers particularly, were simply looking for ‘permission to buy’. Meaning they wanted to be assured quality had improved, and that would be their signal to buy into the legend.

Jaguar’s ‘grand history’, in terms of style, performance, presence and racing success endeared it to owners.

Jaguar enthusiasts LOVED the marque, despite the variable quality, and the occasional breakdown. The solid foundations of the ‘image’ of Jaguar, and what it stood for, were as important as how fast it ran the standing quarter mile.

Racing Bentleys in the pits at Le Mans, 1925
Bentley Motors too, sought to relight the flame of its racing prowess in 2001 when it returned to Le Mans, and the scene of its domination in the 1920s and 1930s.

It was rewarded in 2003 by winning the Vingt Quatres Heures du Mans, and reinforcing that image of power and performance. In the years that followed Bentley added more great looking cars to the Continental range, taking its sales to all-time records and firmly establishing Bentley in the firmament of the ultra-luxury car market.

The point of this dissertation is that what makes marques rise above the pack is history, integrity and immediate recognition of brand values. I recall that, back in the 90s, most people in the car business did not think Lexus would amount to much after a few years, because it had no ‘great history’ to fall back on.

So, you say, what about Tesla? Here's a company with barely any modern history.

Aha! Tesla has a 'hook' and a bloody big one too. It's different and technologically advanced; it's not a conventional car as we know them; it is beautifully designed and styled; and it's powered by batteries! Not only that, Model S visibility has been driven by a media storm!

Tesla has also set out to only build cars it can sell to order; NOT sell cars it has built and 'pushed' out of the factory for dealer stock. Thus the market isn't flooded with unsold cars.

Lexus has not given up though. It has even sent high performance models like the LFA to the Nurburgring to impress the auto media with its speed and endurance, but still, the Lexus history does not date back past 1989.

True, Lexus does have a modern history of making exceptionally competent cars, but unfortunately its ‘history’ contains nothing to distinguish it from its European competitors – and it seems that in the final analysis, that still makes a difference in the rarefied air at the top end of the car market.

Companies like FIAT Chrysler are hoping that’s still the case, after committing a huge budget to the resurrection of the Alfa Romeo name on the world stage. And, if history counts for anything, Alfa Romeo should have buyers lining up for miles!

2016 Alfa Romeo Guilia

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