On January 15, 2018, three of the four top stories in Google News’ Technology section were about cars. Coincidently, the CEO of Fiat Chrysler Automotive (FCA), Sergio Marchionne, said, in an interview with Bloomberg, that automotive companies have to come to terms with the fact that pretty soon automotive news will no longer be about combustion engines: “Developing technologies like electrification, self-driving software, and ride-sharing will alter consumers’ car-buying decisions within six or seven years. The industry will divide into segments, with premium brands managing to hold onto their cachet while mere people-transporters struggle to cope with the onslaught from disruptors like Tesla Inc. and Google’s Waymo.” Mr. Marchionne added, “Auto companies need to quickly separate the stuff that will be swallowed by commodity from the brand stuff.”
When asked about the automotive makers that will survive, he continued, “If a portion of the industry is going to be commoditized, then the attrition rate is going to be tremendous for those that cannot distinguish by brand.” But, at FCA, it will be different. “We took a completely different strategy when we came to brand differentiation from our competitors. If you look at Jeep, RAM, and the premium brands, those are brands that will survive. But if you provide basic transportation, it is like buying a generic phone.”
This is a rather remarkable prediction as Ford unveiled the Steve McQueen Mustang BULLITT, from the iconic 1968 movie with the incredible, pre-special effects, car chase. Mr. Marchionne’s words have dramatic consequences for automotive marketing.
First, if the future of automotive is technological advancements, self-driving vehicles and ride-sharing, then handling, cornering, the turn radius, and the feel of the driving experience are moot communication points. Brands are going to have to figure out something new to say if people are going to buy or be driven in a car.
Second, articulating clear brand differentiation will need to be revisited in ways that will carry into the future. This requires a thorough review, and contemporizing of automotive brand promises. Waiting around to address this is the wrong approach. Get ahead of the parade. Brands like Tesla, Lyft, and Uber have already overturned the norms of the automotive world. All seem to be promising electric vehicles well within the coming decade. Ford is investing $11 billion in electric vehicles, and stated that the company intends to have 40 electrified vehicles by 2022. Ford CEO, Mr. Jim Hackett is planning to cut $14 billion in costs over the next five years, moving monies away from sedans and internal combustion engines to develop more trucks and electric and hybrid cars.
Third, automotive brands must also be better differentiated from sibling brands within the corporate family. The days when cars consider a unique grille and tail lights enough to distinguish a brand name are over. Aside from the aggressive grille, is a Lexus ES really that different from a Toyota Avalon?
Fourth, as Mr. Marchionne stated, technology will become commoditized. All vehicles will have electric batteries, GPS, self-parking, back up and side cameras, and all the other electronics that are currently seeping into the driving experience. Basing a brand’s promise on excellent, groundbreaking technology will not be a winning strategy. Mere technologies will not be the basis for a sustainable, differentiated brand promise. Differentiation will require real creativity to make the total experience distinctive. Nissan’s concept car, the Nissan Xmotion (pronounced as cross motion) has 7 touch screens: The Verge emag said, to enter the vehicle is like “entering a dense forest of technology.” To understand how far Nissan took the technology, The Verge writer, Andrew J. Hawkins, highlighted his favorite paragraph from the Nissan press release: “Fingerprint authentication is used to start the operation of the Xmotion concept. When the driver touches the fingerprint authentication area on the top of the console, the opening sequence starts, awakening the virtual personal assistant – which takes the shape of a Japanese koi fish.” Need we say more?
All brands are facing a challenging but creative future as technology invades all aspects of our lives from home life to browsing the Internet, to shopping, to entertainment, to driving experiences. Just as retail brands are reimagining themselves, automotive brands must revisit and reinvent themselves.