The Tom Dougherty Blog


Posts categorized “Automotive”

The new Chrysler ad campaign is more of the same

 Subscribe in a reader

Last week, it was reported that car sales by the US big three (GM, Chrysler and Ford) were up, so I guess they can be satisfied with how things are going.

But it still feels like status quo to me, especially when you consider the marketing.

Chrysler, who has fought the movement toward foreign-made cars with its “Imported from Detroit” approach, is going one further with its new campaign called, “Born Makers.” It proposes that what makes America great is how we look ahead, with grit, determination and smarts.

But the Chrysler ad campaign runs into the same old problems. It’s about Chrysler. It’s not truly about us.

Advertising, even in television, is often seen in a snapshot. In other words, they should be simple and direct because viewers don’t study them the way marketers do. They just react.

Chrysler's new ad campaignIn the case of automobile advertising, most of it just becomes a blur. They often have the same tone. There is always the scenic drive, and sometimes shots within the factory – especially if you want the process to look muscular.

That’s what you get in Chrysler’s new campaign, which means there’s no real place for the consumer to see themselves. Chrysler may think viewers are seeing themselves as American, but the main point seems to be that Chrysler is American. Therefore, we should buy.

First of all, I’m not sure that is the highest emotional intensity in the market. Sure, the big three are surging (despite GM’s recalls), but Toyota still remains in the No. 1 slot and I don’t think it’s because of where it’s made (or not made).

Most of all, though, the campaign – and like so many in the industry – is about the cars and the manufacturers. They don’t tell you who you are when you drive a Chrysler or what makes you different than those who drive the competition. (Oh, you mean Ford and GM aren’t American?)

When are automobile manufacturers going to get it? For sake of clarity, we at Stealing Share have had discussions with a few of those manufacturers but there is always the wall that “automobile marketing is different.”

No, it’s not. And that’s the problem. It’s all the same.

GM sales rise in spite of recalls. Are we really surprised?

 Subscribe in a reader

For many, it seems, there was surprise when US automakers, especially General Motors, announced a dramatic gain in sales in the month of May. After all, isn’t GM the one who will be hit with fines because of faulty ignition switches that have led to deaths?

I’m not surprised, though. For one very simple reason: We only care about how things affect us.

That’s not a politically incorrect thing to say. It’s just the simple truth, and it forms the basis for all brand. The fallacy, in fact, of how most people perceive brand is that we buy what we can show off. That’s not true at all. We choose based on how we see ourselves or, better yet, how we want to see ourselves. Not how others see us.

GM-dealerIn doing market research, we see this all the time. It is not how Brand A can help those around me feel better. It’s about how Brand A can help me feel better.

Think about this: When I turned 50, I went out – without my wife even knowing – and bought a BMW Z3. I drove it home and my wife said, “Why’d you buy that? You can’t even take the kids in it.” I looked hard at my wife and answered, “Exactly.”

Now, you might think I bought it because I wanted the neighborhood to see me pull out of the driveway and see what kind of cool cat I was. That wasn’t the case at all. I looked like muffin in it.

No, what I wanted was to reaffirm my own sense of self that I could still be a cool cat. It didn’t matter what others thought. It was all about me.

So when GM is slammed in the press and in front of Congress (rightly so), it only affects our purchasing decisions if it directly affects us.

And you see it in the data. In spite of the recalls, GM had a 12.6% increase last month. The recalls didn’t affect it one iota.

This all sounds like we’re all selfish. Well, we are. At least when it comes to purchasing decisions. Even if we are buying groceries for our family – thinking, “Oh. My wife will love this!” – it’s because we want to see ourselves as Good Dad or Good Husband.

While on the surface the GM sales are surprising, they really are not. It’s just human nature.

Peugeot Citroen cannot trim its way to profitability

 Subscribe in a reader

Does it not amaze you as it does me how many brands believe that the key to success is in cutting costs and product choices? If the problem is linked to either of these inefficiencies, then the management is already to blame. After all, were they sleeping at the wheel? Did they not see the inefficiencies and wasted costs? Of course they did.

In light of that, the problem with Peugeot Citroen is a brand problem, not an industrial one.

Peugeot CitroenConsidering the increased European purchases for other manufacturers (from mainly Germany and Japan), the problem that Peugeot Citroen has is one of preference not business costs. The brand simply does not carry the same panache it did in years ago and this has little to do with product advancements and new models.

It is a confusion of the elements of brand and its relationship to preference and margins. The Germans pretty much own the upper echelons of luxury and the Japanese seem to own smart and efficient. Peugeot Citroen? Well, it owns staid and dull. It doesn’t own the models it sells. Those models are as sweetly European as ever. What is dull and staid is the brand itself.

Like many manufacturers in many categories, a company can get lulled to sleep thinking that its brand is made of metal, leather and plastics. In fact, the brand is made up of emotions, feelings and the belief systems of the customer who buys it. It is WHO they believe they are when they own it.

Sadly, Peugeot Citroen thinks that the secret to its brand success is going to emerge from a cutting of models to 26 (from 45) and that the new “Back in the race” theme will signal something important to the current auto buyer who is rejecting Peugeot’s cars now.

Good luck with that. Making a new auto buyer covet your brand takes more than a clever slogan and a major government stake in the company itself. It requires an understanding of the switching triggers and aspirational self-descriptions of the people it needs to influence.

Tesla fighting New Jersey’s “free market”

 Subscribe in a reader

Many may think this unfair but I am making a point. Chris Christie claims to represent free markets, reduced government regulation and an open business climate for the state of New Jersey. Many believe his next job will be in Washington. But wait a minute. If Obama is responsible for everything that government in DC does badly, is not Chris the one to blame in New Jersey? I think fair is fair.

Think about this for a moment. Tesla has two factory-owned stores in NJ selling the advent garde and arguably the coolest car in America. But New Jersey is telling Tesla that it has to close those shops and sell the cars through a franchised dealer network. The reason? The government in Trenton thinks that manufacturers would be able to compete unfairly with existing dealerships.

tesla-model-sIn other words, Christie’s state thinks that, if Tesla sells directly to consumers, prices would be cheaper direct from a manufacturer and buyers would buy direct. They are right, of course. The writing is on the wall. The market place always moves inevitably towards economies and the future of franchised dealerships is certainly heading towards a dead end.

Today’s market allows for direct access, and more and more consumers are waking up to that fact. It has come to be the norm in broadcast entertainment content, books, music and, soon enough, to automobiles.

What is the pushback from governments like Christie’s NJ constituents? A strong lobby of wealthy dealerships that squeeze the legislators to keep the status quo and protect its protected monopolistic markets. Dealerships are the modern version of Blockbuster video. We don’t need them anymore, and they are simply an unwanted middleman skimming off the top.

So Governor Christie (and the state legislature that enacted the law), why not stand up for your citizens and support a REAL free market? Speak out on behalf of your citizenry and let the markets themselves decide which model is best… Intermediary dealerships or direct from corporate?

New Jersey is a narrow state. Almost anywhere you live in Jersey is an hour or so away from a neighboring state. Delaware in the south, Pennsylvania to the west and New York to the north. If the prognosticators and government shills are right, if any of those states stopped protecting the wealthy dealers and allowed direct sales…New Jersey residents are an hour away from better deals.

Of course, the reverse is true as well. NJ could be the spoiler in the region and the adjoining states could create a rising tide of buyers in NJ’s unregulated auto shopping environment. Think of the increases in sales tax that would foster.

Nah. I think we should just keep things as they are until there is no competitive advantage to LEAD.

The problems of GM and Toyota, and the entire automotive industry

 Subscribe in a reader

I wrote about GM’s recalls last week and, wouldn’t you know it, Toyota is now in the news for settling a suit for stuck accelerator pedals for almost $1.2 billion. Toyota said it was wrong to withhold information.

Well, this sounds strangely similar to GM now doesn’t it? It appears that GM also withheld information concerning its faulty ignitions. I wonder if it will suffer a similar fate as Toyota?

Toyota was not bailed out by the government as GM was. Remember, GM was gladly taking bailout money while it was allegedly lying to the government about the faulty ignitions. I guess if the US eventually fines GM for this mess, we can just bail them out again, right?

Toyota settles suitThis is what is fundamentally wrong with the automotive industry. And no, it is not that the government will bail the automakers out. It isn’t even the problems of GM and Toyota themselves. It is the fear that something can go wrong if a manufacturer sticks its neck out. This fear must be so pervasive in the hallowed halls of the manufacturers that none of them are willing to actually promise something meaningful to the consumer or tell the truth.

As history has demonstrated, as long as they fly just below the radar and look like all of their competitors then no matter what happens, they may get a little black eye for only a little while.

That attitude even reaches into their brands. A manufacturer would steal market share if it had some real stones and unequivocally promised something that was truly different and unique and actually lived up to it proactively. As it is now, the manufacturers are just comfortable to let the normal churn of the market go on. It’s time that a manufacturer makes them all uncomfortable.

GM is different alright, but not better

 Subscribe in a reader

Jeez. I have said this before and I will say it until an automobile manufacturer listens to me: There is no difference between any of you.

Well, except for General Motors now.

As you remember, all of us taxpayers once owned a part of GM when it came to light that it was basically insolvent. Now, it is coming to light that GM may have been withholding information concerning the safety of some 1.4 million 2003-2007 autos because of faulty ignition switches.

File photo of General Motors logo outside its headquarters at the Renaissance Center in DetroitJust to illustrate the seriousness of the recall, GM says, if you have to drive one of the affected vehicles, only use a single key in the ignition as the weight of anything else may cause a malfunction. So the folks still driving a 2003 model have basically been playing Russian roulette for more than 10 years.

Get thee to a dealer!

For the most part, car companies have become one homogenized mess. While the manufacturers themselves may say there is differentiation, any differentiation that exists is only in some of the individual models. Even in those cases, the differences are paper thin. As brands, the only thing manufacturers claim is “we build cars.”

Just to illustrate, “the new GM” says that its five principles guide everything it does:

  • Safety and Quality first
  • Create lifelong customers
  • Innovate
  • Deliver long-term investment value
  • Make a positive difference

Pretty vanilla, even for a car company. Would Ford, Honda, Chrysler not fit these principles as well? Furthermore, let’s say for argument, that GM knew about this problem before last month when it initiated the recall. By my estimation, it has failed in at least four of these principles with a single event.

Is this the “new GM” as it claims? If GM really believed and lived up to the five principles, it would not have taken 11 years to initiate a GM recall.

It seems to me that GM is at the beginning of having to deal with two brand problems: 1. Brand repair, and 2. Creating real brand meaning.

On the bright side for GM, repairing a brand is a lot easier if you are repositioning your brand. That is, rebranding, which necessitates going beyond a simple advertising tag line or some superficial window dressing, should fundamentally change the way you conduct business both internally and externally. If you really do that, brand repair is encompassed in rebranding the organization. Changing advertising agencies is not going to be enough here, General Motors.

Even if nothing comes out of this recall issue, GM still has a problem – but so do the most other car companies. They lack brand meaning.

Until they take a step back and honestly evaluate themselves instead of using a recycled carousel of industry insiders, they will continue to reinvent themselves using the same mold as the last time. What’s the saying, “The definition of insanity is doing the same thing over and over again and expecting different results?”

GM and all the automobile manufacturers should take note.

Mexico becomes an automobile manufacturer power. Who cares?

 Subscribe in a reader

Why does anyone care about where a car is manufactured like it is an indicator of anything?

I just read a report that Mexico is on track to replace Japan as the second-largest manufacturer of automobiles purchased in the North American market. You know the brand, of course — Guanajuato Motors. We all love their biggest seller, the Baja.

Now seriously…

Honda-of-America-Manufacturing-assembly-lineAll that has changed is where the cars are assembled and built, not the “Nation” brand that owns the automaker’s brand. Mexico is expected to replace Japan because of a new Honda plant opening there. Now there is a great heritage Mexican brand— Honda.

Why this is even news is news to me. No one cares where the car is manufactured. Do BMW buyers consider a BMW manufactured in the US as a US automobile? Do they even care?

Brands are emotional issues. They are not rooted in rational values. The strength of a brand finds its fire in the beliefs of the consumer who buys it. The buyer hardly, if ever, notices where something is manufactured.

When a gentleman buys a suit, is he buying the Italian home of the designer or the sweatshop worker in Pakistan who wove the fabric and sewed it together? When a lady buys a Coach bag, what is she buying, the brand or the third-world company that put it all together? The answer is self-evident.

Bravo to Mexico for luring the Honda plant to Guanajuato. When the workers demand a better wage to improve their quality of life, the factory will move to the next underdeveloped market to manufacture it.

Mexico has done nothing to brand any added value to the automobile manufacturing process. That is too bad. I would applaud the shift in manufacturing if it had. Wouldn’t it be great for Mexico if we all looked to “made in Mexico” as a badge of terrific workmanship and fairness to the employees?

Until a manufacturing nation invests in creating a brand for itself beyond cheap, well, I guess we will continue to choose Honda because it is a reliable Japanese brand.

The UAW is a doomed brand unless it learns to change

 Subscribe in a reader

It comes as no surprise to me that the UAW failed in its attempt to get Tennessee autoworkers at VW to unionize. The UAW failed because the United Auto Workers brand seems outdated and soiled.

Don’t confuse the feeling that the brand is no longer relevant with the relevancy of a brand. I put it to you that no autoworker in Tennessee would argue that they don’t want better wages, certain retirement and a voice at the table of VW in the Volunteer State. Of course, they want those things. The problem is that the UAW seems so out of touch with the lives of those employees that the brand of UAW does not have permission to represent the needs and values of the laborer today.

So, the UAW was rejected.

VW plant in Chattanooga, Tenn.There are two routes to take after such a rejection. UAW could say, “The Tennessee autoworker does not understand our difference” (e.g., credit unions are quick to blame the general population for the same thing) or it could say, “We need to better understand the Tennessee auto worker.”

Better understanding is where brand permissions reside.

Here is a clear-cut example of a failed brand. It makes promises that seem universal, yet the market rejects it. This happens because decisions on whom to represent us are emotional decisions, not rational ones. The UAW will not elbow its way out of this mess. It needs to rethink its brand image and rebrand.

Brand is always about permissions. The acceptance of a brand is measured in adoption of that brand and the adoption of a brand is a 1:1 correlation of how persuaded we are that the brand can live up to its claims. Doubt causes hesitancy and a hesitant constituency stays put.

The problem is not what the union promised, but the perception of what it has wrought. Truth matters much less than perception and it is perceived that the UAW was responsible for the fall of Detroit. It is believed that the union was responsible from turning GM from a maker of motor cars to the manager of a retirement fund— a big, over-bloated and underfunded quagmire that has more in common with government waste than meaningful production.

Now I’m not saying that those perceptions are based on facts (though there is some truth there). What I am saying is that those perceptions are believed.

So, United Auto Workers Union, learn from your mistakes and rethink your brand. It needs permission to represent the modern worker who hopes to work there his whole life but not with the union of his grandfather.

BMW enters the electronic car world

 Subscribe in a reader

In the world of automobiles, there are very few meaningful brands. For the most part, they are simply cars. They have a steering wheel, four tires, an engine and a gas tank so you can get to where you need to go. You can’t tell one from another.

BMW is one of those brands that actually triggers an emotional response. Its “The World’s Ultimate Driving Machine” suggests the experience of driving, a love affair with using the automobile. “Driving” is the emotional word here.

628x471For that reason, now that BMW has entered the electronic car age with the unveiling of the i3 at the International CES convention, the rest of the market better watch out. There is no one better positioned to add technology to the automobile than the “World’s Ultimate Driving Machine.

The i3, which will become available in April, has many cool features, including a table-style touch screen that’s wired into the Internet (but not while you’re driving!), programs to preheat or precool itself and LED taillights. It is, by BMW’s own admission, an attempt to target the Millennials (ages 19-36) who want more technology in their cars because they grew up in the techno world.

In full disclosure, I am a BMW driver and I’m supremely confident that the BMW brand will make this electric car another “ultimate driving machine.” The competition should take note.

Car dealerships will become a thing of the past

 Subscribe in a reader

There’s no stopping progress as car dealerships are soon to find out. For years, I’ve wondered why automakers don’t make buying a car online easier or more thorough. The reason is simple enough: The dealerships themselves don’t want it, and they’ll revolt at the mere thought of it.

Now manufacturers are tiptoeing into a greater expanse of online shopping, while still fearing the retribution of its bread-and-butter. Standing in their way is the National Automobile Dealers Association, making automakers hesitant to go full bore.

That’s why the CEO of General Motors backtracked on his statement that the automaker wants to make it easier to buy a vehicle online with its Shop-Click-Drive system. After making it a point on a recent earnings conference call, Dan Akerson said GM had no plans to “bypass our dealers.”

gty_car_dealership_nt_111116_wgBut it’s only a matter for time when they do and dealerships become more like retail stores – where you shop online, then pick the car up at the dealer. The customer is changing. No longer are customers willing to be held captive by car salespeople when online shopping is more preferred, especially by the younger set.

Going to a dealership to shop for cars is a miserable experience and consumers will do anything to avoid it. The model is simply outdated, with all the haggling and wasted hours sitting in an office while paperwork is being completed.

Once the automakers themselves get brave enough – and continue tiptoeing into online shopping – consumers will follow. You can’t stop innovation and, right now, automakers and their dealerships are fighting a losing battle.