No. 777,
December 17, 2014

About The Autoextremist

What do you do when when you've been immersed in all things automotive since before you took your first steps? When you're the scion of an automotive family in an automotive town in its very own automotive universe? When you've forgotten more about cars and motorsports and everything and everyone involved in the business than most people will ever know? When cars aren't just in your blood, but also in your bones and your brain and the very air you breathe? If you're Peter M. De Lorenzo, you ramp it up a bit further. National commentator, industry consultant and author (as well as former superstar ad man), De Lorenzo's daily (and nightly) focus for the past 15 years has been Autoextremist.com, a weekly Internet magazine devoted to news, commentary and analysis of the auto industry and the business of motorsports. Translation: De Lorenzo likes to tell the truth about what's really going on behind the scenes in the car business. And sometimes, things get ugly. Real ugly. But he is as passionate with his praise as he is with his critiques, and Autoextremist has become a weekly "must read" for leading professionals in all industries. De Lorenzo is considered to be one of the most influential voices commenting on the business today. It's the very definition of a high-octane life. And it's what fuels De Lorenzo to keep the pedal down - hard. He won't stop because he can't stop. A bit tired, perhaps? No way. De Lorenzo is one of the most untired people we know.

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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Monday
May062013

We are not Scion. (Thank goodness.)

By Peter M. De Lorenzo

Detroit. Asked by an interviewer from Automotive News whether they would start chasing Gen Y buyers like every other automaker searching for a clue, Andy Goss, the CEO of Jaguar Land Rover North America, had this to say: "You should not pigeonhole yourself so much. We conquest customers but we are selling cars that are $40,000 to $80,000. They are bought by people in their 30s and early 40s. Even the average Evoque buyer is 43 years old. The average (Evoque) transaction price is nearly $50,000. We are not Scion."

We are not Scion. Halle-frickin' luja. Those are the smartest words to come out of this business in months. Thank goodness one auto CEO has the balls to say it.

We are not Scion. Meaning? We know who we are and more important we know who we’re not. And besides that we’re not interested in 1. Being all things to all people, and 2. Going down-market to chase the rainbow-colored unicorns (aka entry-level buyers) that maybe, just maybe, might be enticed to our brand if we pander to them just so.

And by the way, Toyota’s actual entry-level brand isn’t the point here. What started out as a youth-chasing nameplate ended up appealing to boomers and others who didn’t exactly fit the stated target to begin with. Now? Scion is floundering around searching for a clue (cheeky, stylish Subaru antidote or sporty car fun?), like any number of car companies who attached themselves to that perilous mission of being desirable to younger buyers.

I have watched repeatedly as luxury auto brands get all tangled-up trying to entice youthful buyers into the fold. And at times it borders on the laughable. Mercedes-Benz traditionally has been the most egregious offender, stumbling around trying to chase every segment they can get their hands on, all the while diminishing their brand overall. It’s an idea that Mercedes-Benz marketers never get tired of, because they seem to revel in dumb and dumber behavior. They’ve squandered their brand legacy in this market in a lurid two-steps forward, three-back dance of ineptitude that has been mind-numbingly tedious to watch over the years.

And now they’re about to launch the front-wheel-drive CLA this fall - their latest answer to the question that no one was really asking - and despite the usual lights in the media who are lining up to canonize it (ensuring their invites to the next Mercedes-Benz overseas junket) it remains to be seen whether or not it will be the hottest thing in the market, or the new $30,000 (or thereabouts) Mercedes C- and E-Class killer, deftly cutting the legs out from under its own showroom siblings.

I can assure you that if anyone at Mercedes-Benz thinks they know – and that means you, Steve Cannon – they’re sucking on a giant Hose of Delusion. Cannon, you may remember, is the current CEO of Mercedes in the U.S. who approved the hiring of a young hip filmmaker – Casey Neistat – to infuse hotness to the CLA ahead of its launch, which is proof positive that Mercedes has now officially slipped into the “Let’s Throw Absolutely Everything We Can Come Up With Against The Wall And See What Sticks” school of marketing, aka MYTMI, for MindlessYouTubeMarketingImperatives.

BMW went about it differently – and smarter too, at least for five minutes anyway – by designating MINI as its entry-level brand, which was an eye-opening success until they just screwed it all up by thinking too much. As in adding too many nameplates, too many models and too much, well, too. Or, paraphrasing the immortal words of Joe Pesci as Nicky Santoro in Casino: “These guys could fuck up a cup of coffee.”

It seems to be a particular affliction of most German auto marketers in that they just can’t leave well enough alone. They get edgy and restless and are deathly afraid they’ve left a buck on a table somewhere and someone’s gonna find out. Instead of leaving well enough alone, BMW executives have embarked on their own particular journey of stupidity by planning to unleash front-wheel-drive versions of the 1 Series (around $30,000, of course, there’s that magic number again), which will share underpinnings with the next-gen MINI and directly compete with upper-echelon MINIs in the market at the same time. Frickin’ brilliant.

What part of this drill do BMW and Mercedes-Benz marketers not understand? They spent decades and billions upon billions of dollars trying to pound into consumers’ heads that their brands of cars were special and that they cost more because they’re automotive conveyances to aspire to. Not for everyone, to be sure, because you had to step up your game to get into one of them, but it was worth it in the end because these brands did things differently and had a point of view that was slightly better than all the rest.

Now? They’re going to throw it all away by offering lease specials that can be priced to compete with Hyundai and KIA dealers.

What’s wrong with this picture? How about everything? And please spare me the touchy-feely marketing mumbo-jumbo that suggests “oh, we have to become more approachable because if we don’t appeal to young people where will we be?”

Well, for starters, if you bring an attitude like that to the table I would suggest that you deserve to be scrambling to keep your head above the shark-infested waters populated by the Hyundais and KIAs of the world. And please don’t blame the entry-level buyers or the so-called “young” buyers for the blatant overreaching and desultory overthinking going on in this business right now either.

Young people aren’t stupid. They’re brand savvy too - much more so than any brand studies are actually quantifying. I see an entire generation being put in a box wrapped in Green with warnings attached suggesting that it’s a brand new day in marketing and that these people are really different.

Really? I’m not buying it. Not every damn product in this market has to be tinged with Green fairy dust and able to return to the loins of earth after use wrapped in delightfully benign loam sludge with a whiff of begonias thrown in for good measure.

Excuse me but these new buyers aren’t all that different. Quality still means something, for one thing, especially to younger buyers gaining on their careers. And no, not the quality bestowed by those ridiculous “Are you satisfied with your dealer experience and if you are please give us the top ratings?” surveys that mean absolutely nothing to the consumers filling them out (or anyone else for that matter).

I’m talking fundamental quality. As in, nothing ever goes wrong with the product, of course, but more important, that the presentation, look, feel, style, texture and tone of the brand are relentlessly consistent and exude a quality perspective from every angle. It’s not only how you present your brand but it’s what you have to say as well and that must remain firm and unwavering across all communication platforms and in-person interactions.

You would think this would be obvious and easy, but it isn’t. Car company executives’ skewed thought processes get in the way – and all the negative that entails - and the results can often produce a giant bowl of Not Good, or four-foot-high Day-Glo lease numbers on the side of Mercedes-Benz cars on dealer lots (classy that, by the way). Or “entry-level” front-wheel-drive BMWs that should never see the light of day.

Memo to luxury automakers: You have to stand for something other than what amounts to chasing tail in pursuit of the latest trends blowing in the wind. And when I see BMW and Mercedes-Benz marketers and others – you know who you are – flail away and talk themselves into believing that more volume by way of more approachability is the answer to all of their problems, both real and imagined, I just cringe.

Actually, the biggest problem for these luxury automakers is the word “more” come to think of it. Top managers see how much money the company is making so they want more of it, thinking, of course, that the sun will never set on their golden empire. But in order to make more money they automatically assume that they need to make more cars and fill more niches and set more quarterly and yearly sales records. And if they don’t, those managers will be replaced for new ones that promise, well, more. But in the end, this quest for more causes these companies to lose sight of who they are and begin a sickening downward spiral into mediocrity that is extremely difficult to reverse.

If the concept of “more” is the biggest problem for luxury automakers then the biggest opportunity lies in this word: Aspiration. It’s the word every luxury automaker executive should never lose sight of, because in essence it’s why the brands they represent exist in the first place.

People desire luxury brands that speak to them in word, thought, style and deed. Whether they find the historical legacy of a brand attractive or they find the way the brand presents itself while executing its product philosophy enticing, an emotional connection – and fundamental trust in the brand - is established that’s undeniable, one that can grow over time. A connection that takes many, many years - as in decades - to establish.

When I see Mercedes-Benz, BMW and other luxury automakers eschewing all of that in their unending quest for more cash, they are knowingly squandering their hard-won brand reputations either by playing in niches and segments where they don’t belong, or by transforming themselves into something they’re not in order to appeal to customers whose tastes and sensibilities are changing by the hour. And in the process of doing so they’re completely forgetting their fundamental raison d’etre and what got them to this point to begin with. (If anything these brands should push higher upmarket, letting the coming brands fill in space beneath them.)

The important thing for these luxury auto manufacturers to remember is that they have to know who they are before they can even begin to understand where they want to go.

We are not Scion, indeed.

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

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