No. 744,
April 23, 2014

About The Autoextremist

After a more than two decade career in automotive advertising, Peter M. De Lorenzo founded Autoextremist.com on June 1, 1999 as a weekly Internet magazine devoted to news, commentary and analysis of the auto industry and the business of motorsports. Since then the site has become a weekly "must read" for leading professionals within and outside the auto and motorsports industries, and De Lorenzo is considered to be one of the most influential voices commenting on the business today.

De Lorenzo's latest book is Witch Hunt (Octane Press  witchhuntbook.com). It is available on Amazon in both hardcover and Kindle formats, as well as on iBookstore. De Lorenzo is also the author of The United States of Toyota.

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The Autoextremist - Rants


Sunday
Apr202014

In Search of the Magic Beans.

By Peter M. De Lorenzo

Detroit. After wandering through the New York Auto Show last week and taking the pulse of the U.S. auto industry, a few things stood out. First of all, the desperate race to come up with new stuff has reached a fever pitch, with manufacturers blowing past the obligatory “What have you done for me lately?” term for motivation in industry parlance to “What have you done for me this week?” 

This has caused a super-heated frenzy the likes of which has never been seen before in this business. The pace has now reached the insanity stage, with companies cranking out new products at a dizzying rate. Manufacturers are clamoring to create new products for two main reasons: They’re desperately afraid that they will be one-upped by the competition, and, in order to increase profitability they see the need to increase volume, which has them exploiting niches both real and imagined. The results may vary, and wildly too as you'll see.

Hyundai touted its new Sonata, which visually is a notable step back in terms of emotional appeal, to the point that it was a giant yawn. I don’t care how much better it is – allegedly - compared to the previous generation car, because Hyundai went all “me too” on us with the design, and it showed.

Toyota touted its new Camry as a more emotionally compelling design than the previous iteration, which isn’t exactly saying much. Toyota made it look more like a junior Lexus, which constitutes a great leap forward, at least in their minds. But consumers are likely to have other ideas. Once upon a time Camry stood for market gold. Make no mistake it is still their bright and shiny bread and butter, but there’s so much more competition these days that Toyota is having to fight for every sale like never before.

The Germans continue to pound on each other, with BMW, Mercedes-Benz and Audi acting like the kids that never get called upon in the classroom no matter how vigorously they wave their hands. Did they have good stuff in New York? Yes, they did. The Audi A3 is everything it should be, the Mercedes S63 AMG 4MATIC Coupe is stunning, and BMW keeps aiming to create something for every possible garage, whether it makes sense or not. BMW’s rote regurgitation of new model upon new model is not only confusing, it’s getting very old too.

Dodge weighed in with a revised Challenger and Charger, reiterating their desire to be America’s chief purveyor of nostalgia rods and cop cars. Nothing new there.

The Fiat display was forgettable, per usual, and Mazda crammed as many of its Miata models from over the years into its display as possible, thinking it was a good idea to do so. It wasn’t. (It did manage to remind me, however, that the original Miata was clearly still the best – and by a wide margin too - and that every subsequent model since somehow came up short.)

And speaking of cramming, the MINI display represented everything misguided and wrong from a car company that has completely lost the plot. It was a veritable rolling quagmire of too many models and too little sense.

Infiniti keeps pounding away at their image, trying to convince everyone that they belong at the top table with Audi, BMW and Mercedes-Benz. They don’t and it’s actually kind of painful to watch, too, especially when they tout four-time Formula 1 World Champion Sebastian Vettel – their "brand ambassador" - as having direct input into the development of Infiniti models you can buy right now. There’s something decidedly missing from Infiniti - as a car company and a brand - and the more aggressive it gets in cajoling people to consider its charms, the more desperate it seems.

GM continued to pretend that their display space off by itself is a good idea (it so isn’t), although Cadillac did manage to escape to the main concourse, which was a good idea. There’s no question that the Corvette Z06 Convertible was a grand slam home run, however, the recall cacophony be damned.

And Ford trumpeted the 50th Anniversary of the Mustang with great fanfare, and the 50th Anniversary Mustang displayed – of which only 1964 will be built – was actually tasteful and desirable. (And this from someone who finds anniversary editions by definition to be beyond tedious.)

But my biggest takeaway from the New York show is that in the manufacturers’ frenzy to outsmart their competitors and get wherever it is they think they need to be going first, they’re throwing anything and everything up against the wall they can get their hands on to see what sticks, instead of rationally thinking about who they are and what their brands stand for in this market. And these frenzied moves are affecting their respective brand images in a hugely negative way.

It’s as if these manufacturers are in search of the “Magic Beans” that will solve their problems once and for all.

They’re chasing connectivity, not because they think it's ultimately a source of product differentiation in the market, but because they’re afraid that if they don’t they might be left behind. Behind what, I’m not sure.

They’re chasing the digital marketing space, not because it’s giving them a leg up in the market but because if they don’t another competitor may tout that they’re more digitally savvy, and that would be akin to a death sentence.

They’re chasing niches upon niches to a ridiculous degree, because if they haven’t thought of it someone else might and then what?

In the midst of all of this noise some of these manufacturers seem to be missing the point entirely.

The bottom line in this is that digital marketing can’t replace product goodness, no matter how wonderful and of-the-moment it seems to be.

And connectivity isn’t going to differentiate one car from another or make a car actually drive better either. Besides, when everybody has access to the same electronic wizardry, and as a manufacturer you put all of your eggs in that one basket as a source of product differentiation, where does that leave you? Like a house by the side of the road, that’s where.

And just because a manufacturer can build something that will address a niche, it doesn’t mean it should. (See just about every other BMW and MINI brought out over the last five years to understand what I mean.)

There was simply too much noise at the New York show, and not the good kind either. Too many manufacturers offered up smoke and mirrors, putting too much emphasis on flash rather than substance, while hoping that no one would notice. And thus the cloak of sameness hovered over the proceedings like a bad dream.

In short, I caught a lot of car companies chasing their tails at the show, ignoring the two most enduring tenets of the business, which are:

1. It’s about The Product. It always has been and it always will be too.

2. Design is still the Ultimate Initial Product Differentiator. If you don’t have it, you can’t hide it. And if, as a manufacturer, you go all vanilla hoping to offend the fewest people, you’ll probably end up attracting the fewest people as well.

And if there’s a third, it’s this: There are no Magic Beans to be found in this business.

Instead it’s about designing, engineering and building fundamental product goodness and having the focused consistency not to waver from that mission.

It’s about creating products that are emotionally compelling to look at, fun to drive and rewarding to own.

And it’s about adhering to the core competencies of the brand. In other words, whatever you’re good at and whatever your reputation is based upon, you better deliver on that promise. Anything less and you will get lost in the shuffle, or just get lost, period.

And of course it’s about not veering into niches or segments that you don’t belong in, no matter how enticing they are.

There are no “Magic Beans” to be had in this business, but given what was on display in New York a shocking number of manufacturers seem to have forgotten that fact.

And that’s the High-Octane Truth for this week.