No. 780,
January 21, 2015

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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The Autoextremist - Rants


Monday
Jan052015

BEAUTIFUL THINGS AND LINGERING QUESTIONS.

By Peter M. De Lorenzo

Detroit. With the Detroit Auto Show due to dominate the automotive scene for the next couple of weeks, 2015 is already shaping up to be a very interesting year.

We will, of course, be treated to the annual train wreck in Cobo Hall, whereupon each manufacturer will tout its wares, promising a percentage sales increase that will cumulatively add up to a market pie somewhere north of 150 percent. That’s right, in an amazing cessation of all known mathematical equations, auto company executives will get up in front of the assembled media (and legions of hangers-on), and one after another boast and brag of untold future sales success, at the expense of their competitors, ignoring, of course those niggling realities of the market at large.

The German manufacturers are remarkably adept at this, all the while adding niche upon niche to their portfolios in the interest of having all possible bases covered, unable to see the Black Forest for the trees. It’s a remarkable display of hubris and arrogance that never gets old, because as you’re tripping over an endless sea of cars and SUVs in the Audi, BMW and Mercedes-Benz displays, you come to the stark realization that they have created an alternative autoverse for themselves, unfettered by rhyme or reason, with a seemingly fleeting grasp of reality.

It’s a beautiful thing, actually. And compared to the prevailing comical winds generated by the Korean auto manufacturers, the German manufacturers actually appear at times to be, dare I say, rational.

The Koreans? Well, let’s be honest, they’ve achieved an entirely different dimension of crazy. Once convinced they could pull a giant lever back home and bury the competition at will, they’ve hit the wall and have had to confront a brutal truth that they’re woefully unprepared for, and that is the ugly and painful realization that they can’t impose their will on their competitors, or their customers. And they’ve had to reduce their expectations, which is anathema to their very core. And that’s a beautiful thing, too, albeit in a completely different way.

As for the two domestic U.S. manufacturers, and the Italian Interloper, 2015 is going to be a “spectacular spectacular,” or that’s what everybody thinks at least. And why not? Ridiculously cheap gas prices have taken an already SUV/crossover-crazed market and fueled it into a complete frenzy.

As I’ve said previously, this causes all kinds of strange behavior around these parts, with auto executives talking to themselves in the wee hours of the morning while conjuring up delusional notions of grandeur, convincing themselves that we’ve somehow reached a new Golden Age and that the good times will last forever this time.

But alas, they don’t. They never do, in fact.

This business is a cyclical roller-coaster ride that reaches the highest of highs before plunging to the lowest of lows, and as much as the new wave of hot-shot auto executives believe they can alter the ebb and flow of the autoverse by the sheer force of their considerable egos, they are wrestling with a power that’s far greater than themselves, and the sooner they realize that fact the longer their careers will be.

As for 2015, the open-ended questions are all encompassing:

1. Will GM get their marketing shit together or will they continue to careen around in fits and starts making it up as they go along?

2. Will Cadillac come into focus under the leadership of Johan de Nysschen, or will the sheer inertia of an intransigent, old-school dealer body wreak havoc on his lofty plans?

3. Will Buick actually come up with a real ad campaign or will they continue to go with their glorified – and embarrassing – Tier 2 shtick and call it good?

4. Will Ford bring their Total Performance for a New Era initiative to life and make it stick in the broader market - beyond the hard-core enthusiast faction - and most important, make it profitable?

5. How long before Ford – and its formidable dealers – get it into high gear with its new F-150 and reassert its true dominance in the pickup truck market?

6. How long will FCA milk the Jeep and pickup truck bandwagon before the realization sets in that they’re a Jeep and truck company (with a few hot rods and cool cop cars thrown in for good measure) and not much else?

7. When will Mercedes and BMW stop chasing niches and start rationalizing their respective product plans?

8. When will the Smart car folly die once and for all?

9. When will BMW get real about MINI, and realize that they’ve finally hit the wall with the brand?

10. Is this the year Lincoln finally comes into focus and gathers momentum?

11. When will Toyota put Scion to sleep?

12. Will Lexus make this Jekyll & Hyde product routine of luxury and kick-ass performance work?

13. Will Maserati be more than a footnote?

14. Will Fiat be more than an afterthought?

15. Will Alfa Romeo be anything more than the 4C?

16. Will Volkswagen ever get its shit together in the U.S. market?

17. Will the revised Volt be worth the effort?

18. Will Cadillac cut the price of the ELR by $20,000?

19. Will the Korean manufacturers accept the notion of humility?

20. Will a mid-engine super Corvette finally emerge from the shadows?

21. Will The Autoextremist be here next week?

And the answers:

1. You’re kidding, right? With no CMO and a belligerent attitude about the notion of even needing one, GM will continue to careen around in a two steps forward, three back dance of marketing mediocrity.

2. That’s truly the multi-billion-dollar question of this or any other year. Johan de Nysschen’s marketing “team” leaves a lot to be desired, the Cadillac dealers are notoriously dependent on cash-on-the-hood marketing, and it will be an extremely painful transition to the Audi model of product value that de Nysschen is pushing. The one thing de Nysschen has going for him is that the Cadillac products gets better by the minute and the True Believers responsible for them are some of the most committed in the company. But it’s going to be a long, hard road.

3. See No. 1. The pathetic thing is that Buick marketers actually believe that what they’re doing is brilliant advertising and that it has turned the tide for the Buick brand. Au contraire. It’s a pathetic excuse for having a distinct lack of an idea. The Buick product lineup is worthy of a cohesive marketing strategy. The Buick brain trust is apparently incapable of grappling with that notion.

4. Excellent question. In the 60s Ford’s “Total Performance” marketing initiative was a premeditated strategy to jump-start the brand out of its doldrums. And it worked extremely well, with Fords competing in every form of racing imaginable and changing the image of the brand once and for all, culminating in wins at Indianapolis, in Formula 1, and four straight triumphs at the 24 Hours of Le Mans. We live in a different era, but Ford’s product lineup is now filled with worthy high-performance variants, with the ultimate halo machine to be introduced next Monday in Detroit. Developing a cohesive marketing strategy that not only attracts the hard-core enthusiasts but also transforms the Ford image to a broader populace - while adding incremental profits for the company - is a huge challenge. The jury will be out on this one for years to come.

5. Not long. What a lot of people don’t realize about the new F-150 is that beyond the aluminum story and its towing capability prowess is that it’s a fantastic driving truck. This is the one factor that everyone is underestimating. Once these trucks get to the dealers in volume, watch out.

6. Never. Sergio and his posse think they know better than everyone else, and they will never admit that the passenger car thing (except for the Dodge hot rods and their cop car business) and the Fiat thing are nonstarters. The tunnel vision and the prosciutto-encrusted hubris know no bounds out in Auburn Hills, there’s no doubt. But as long as they keep churning out Jeeps and trucks, it’s all good.

7. Are you serious? The only capacity for hubris that rivals Marchionne’s in this business comes from the braniacs in charge of BMW and Mercedes, with Audi not far behind. There’s an unmistakable undercurrent emanating from the German manufacturers that suggests that they’ve forgotten more about this business than their collective rivals will ever know, but the reality is that they’ve been wrong at least as many times as they’ve been right, and many of their product and marketing initiatives go up in flames on a consistent basis. Case in point? BMW is unveiling three – count ‘em - three 6 Series models in Detroit next week. Really? And that’s just one example. Stumbling around the show displays from BMW, Mercedes and Audi next week will beg the question: Who are these guys marketing to? And can you really parse the American luxury-performance market in to slivers without cannibalizing your other products? And the answer: How about no?

8. For everything that’s sacred and holy in this business, and for the legacy of the auto giants that came before, this story should have been over years ago. But for Dieter Zetsche, the Chief Executive of Hubris at Daimler, the delusion runs deep. Too bad, because smart is a lingering embarrassment that needs to be put to sleep.

9. Are you serious? Part II. It’s nevergonnahappen. As in never. The MINI thing was interesting for a while, but the BMW brain trust is hell bent on riding this one-trick pony into the ground, all the while insisting that they know best. Same as it ever was, in fact.

10. They’re in the discussion, at least, and the new MKX is a technological marvel, but until they have a “big” Lincoln they will still be operating on the periphery of the American luxury radar screen.

11. Toyota is too frickin’ arrogant to get real about Scion. End of story.

12. They’re giving it a good fight, I’ll give them that. And the new performance machines are indeed impressive. Will they be able to cultivate this two-pronged strategy going forward without negatively affecting their traditional “we have non-descript pseudo-luxury machines with impeccable service” raison d’etre? We’ll see.

13. No. Let’s be real here, why would anyone – other than the fringe enthusiast who wants to drive something different to the club - venture into a Maserati showroom? Given the serious players in the field, the ones with much more accomplished track records in terms of image and resale performance, Maserati will remain nothing more than a miniscule niche of a niche.

14. Fiat is teetering precariously close to Clown Car City, and I see no reason to think that this trend will not continue. FCA is flat-out dreaming about Fiat’s place and potential in this market, and that is not about to change anytime soon.

15. Are you serious? Part III. Oh wait, I forgot, Marchionne has promised anyone who will listen that Alfa will rival Audi in sales by 2018. Still the most egregious example of unmitigated bullshit in this business, hands down.

16. Remember, we’re talking the German automotive marketing mindset here. They think, nay, they insist that they know best. And in VW’s case they have proved relentlessly and convincingly that they don’t know jack. Expect more of the same from the bumblers in Wolfsburg.

17. Yes, but will anyone actually give a shit? Not enough to matter, unfortunately.

18. They either drastically slash the price of the ELR or kill it outright. There’s no in-between worth discussing here.

19. They will talk a good game, at least for a while, but make no mistake humility isn’t a growth industry when it comes to the Korean auto manufacturers. They will return to their arrogant and misguided ways in no time.

20. Yes, you can absolutely count on it, especially given Ford’s unveiling next Monday. GM isn’t going to take this sitting down, trust me.

21. Who, me? We’ll see.

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

Editor's Note: If you missed our AE 2014 Year in Review or other issues, scroll down and click on "Next 1 Entries" below. - WG