By Peter M. De Lorenzo
Detroit. That the winds of change are blowing through this business like the chill of an early fall is no revelation. Some of these winds are dark, brooding and foreboding; others are merely progressions marked by the natural cadence of time.
The business is deep in the throes of a “Je ne sais quoi" moment. The month-to-month sales prognosticators have weighed in because that’s what they’re paid to do, but do they really know what is going to happen in 2017? No. I am quite certain of one thing, however - we’ve reached the cannibalism stage in this current car market. From here on out we will see the major auto manufacturers cram more and more of every incentive imaginable on their cars and trucks to maintain market share, while hopefully taking market share away from their competitors. As you might imagine, it’s going to get ugly before it stops, and the victories will be Pyrrhic, at best.
And while that dance of impending slowness is playing out, we have a mountain of questions to consider that will impact this business for the next 25 years. Defining moments – and technologies - that will transform the industry.
Take Elon Musk, for instance. Will he be around for the foreseeable future? Barring an early exploratory flight to Mars for his Esteemed Oneness, yes, of course he will. But will Tesla? My response to that is no, certainly not in its current configuration that’s for sure. Musk is already bored with the car business and as the major manufacturers ramp up their own all-electric vehicles, Tesla will go from being that Shining Beacon of All That is Good and Righteous about Silicon Valley and drop into the gaping maw of being “just another car company,” a dreaded and ignominious status that would render Elon the Magnificent damn-near speechless, if not hasten his departure from the car business all together. But hey, Tesla could very well become the Morgan of the electric car movement by 2022, so there’s that.
And then there’s the Lincoln vs. Cadillac battle that’s shaping up right now before our very eyes. Cadillac is being reimagined in the likeness of Audi by longtime U.S. Audi guru Johan de Nysschen, right down to the generic and colorless alphanumeric nomenclature that stands for exactly nothing (except for the Escalade, of course). Take that, combined with an excruciatingly painful advertising campaign that has become so gratingly offensive over time that it’s turning consumers off in droves, and you have an American car company – albeit with some decently executed products - aspiring to be a force in the luxury market but with apparently no frickin’ idea how to effectively market.
On the other side you have Lincoln, which has worn out Matthew McConaughey’s sell-by date quite a while ago but which now has its new Continental coming on line. As I’ve said before, even though the Continental doesn’t boast the technical chops that the Cadillac CT6 has, it has the one thing that Cadillac doesn’t, and that’s a name that resonates across a wide spectrum of consumers. And given that Lincoln’s brain trust has demonstrated marketing and advertising instincts (except for staying with McConaughey too long) that are head and shoulders above the best that Cadillac can muster, don’t be surprised if the Continental emerges as the clear winner in this face-off. The Lincoln marketing troops have already unveiled a presentation that’s far superior to anything Cadillac has done to date with it’s initial foray for the Continental engaging the visual creativity of Annie Leibovitz in “That’s Continental.”
But then again, does all of this really matter in the Big Picture? Not as much as it once did, that’s for sure. In the American market we’re talking bragging rights only, as it’s clear that the fortunes of both Cadillac and Lincoln will ultimately reside in the Chinese market. But there still is a certain image aura available to Lincoln and Cadillac here. It might be an aura that’s marked by fading light, as the Asian theater swallows everything whole, but it’s a distinctive aura nonetheless. And a very American aura too. And right now Lincoln – or the Lincoln Motor Company as it wants to be known – is definitely showing its taillights to Cadillac in terms of this whole image-wrangling thing.
And let’s forget about the trepidation and hand-wringing associated with the autonomous car movement for the time being, because it will be a good decade or more before the first noticeable applications of autonomy will be visible, and in only a handful of urban centers at that. Instead, let’s consider the ramifications of electrification, because we’re talking about a transformative movement in transportation that will touch nearly everybody in this country. The acceleration of battery development and technical innovation that’s overwhelming the entire automobile industry now is staggering. We will see the dreaded “range anxiety” become a quaint notion of the past in relatively short order, as a range of 300 miles will become the basic price of entry across a wide spectrum of vehicles (this will do more to hasten Musk’s lack of interest in the car business than any new development in his plans for the colonization of Mars).
A common number bandied about once upon a time was that all-electric vehicles wouldn’t take more than 20 percent of the market, and it would take another decade and a half to get there from right now. I will tell you that both the percentage and the duration are wildly inaccurate. We are about to experience a dramatic sea change in the automobile business – and in the automotive experience - as we know it. We’re going to see consumers embrace this new technology with a renewed enthusiasm for advanced transportation, as each new and more technically advanced all-electric vehicle hits the market.
We’re on the precipice of a fundamental shift. The automotive “thing” is breaking away from what has been familiar for more than 125 years. And it’s going to be jarring and disruptive to a lot of people. Yes, we will have cars with internal combustion engines for many, many years to come, but the mainstream car business, as we know it, is breaking away for good.
Will some things remain eerily familiar despite the transformation? Yes, of course, because some things in this business will never change, no matter what.
Saviors will come and go. The luminescent and gifted will make their marks, leaving impressions and lasting impacts that will withstand the test of time. Some of these will be genuine pioneers and groundbreakers; others will be merely True Believers with the soul and the heart and the innate will to succeed that will drive them to majestic heights.
And the charlatans will leave their mark too. Conniving and calculating, these parasites will emerge as the bloodsuckers of the New Electrification Age, leaving a trail of tears and broken promises as companies are left to fester in their wake.
And as before, we will be reminded that in this business, as in life, some things – and people – appear to be exactly what they are, while others are mere smoke dancers straining to conceal who, or what, they really are.
In the coming years it will be interesting to see both sides of the equation emerge.
And that’s the High-Octane Truth for this week.