No. 812,
September 2, 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


Tuesday
Aug182015

THE COMMODITIZATION OF EVERYTHING.

By Peter M. De Lorenzo

Detroit. In the aftermath of the much-touted Monterey Car Week and the equally gushed-over Woodward Dream Cruise, it might be a good time to step back and see where this “Car Thing” is really going.

To say that the “Car Thing” is in a bad place right now is an understatement. WTF and wait a damn minute, you say? Isn’t this the “golden era” of high-performance that we’re living in at this very moment? Aren’t we enjoying the finest machines ever built? Aren’t the eye-popping sales numbers being generated every month worth shouting about?

And the answers to these three questions are 1. Absolutely. 2. We are, indeed. And 3. Yes, of course those sales numbers are more than noteworthy, they’re smokin’ hot.

And to be sure, it’s not as if there weren’t countless stunning machines on display at both of those quintessentially American car happenings either, because there were, too many to even comprehend, in fact.

But – and there’s always a “but” in this business – there was a palpable air of foreboding lingering over the proceedings as well. You could sense that in the midst of this glorious automotive thrum, more than a few people had begun to glance off into the distance, squinting to see if they were indeed getting closer to The End of this latest bout of unbridled automotive euphoria.

Why? A pall of sameness and predictability is wafting over the “Car Thing.” There’s not only not much new under the sun, everything is so homogenized that even the so-called “sacred” touchstone events for enthusiasts have begun to take on a rote cadence, cloaked in a black cloud of inevitability. 

This was especially the case during the many auctions that occurred in and around Monterey. The True Believer car enthusiasts looking to connect with an interesting bit of automotive history have long been overrun and replaced by the hucksters, quick-buck charlatans and speculators, those looking to extract every last dollar out of the various machines they had brought with them in order to slaughter the bank accounts of the unenlightened.

And the prices? They had climbed from the merely absurd to the flat-out obscene, with cars going for anywhere from 50 to 100 percent more than they had cost just three years ago. This was no longer about preserving the classics or reveling in the majesty of a one-off creation destined for a good enthusiast home, this was pure greed rearing its ugly head in a full-blown orgy of wild speculation. These rolling artistic creations were no longer historical automotive artifacts changing hands between those who would cherish them. No, these machines had now been reduced to mere - albeit extravagant - commodities at the mercy of the condescending hordes looking to hang a big number on an end-of-auction tally that would make the “right” headlines and fuel the next wave of auction hype. It was nonsensical and ridiculous, and all but a few bothered to care – or notice - where all of this was going.

And of course the lemming-like manufacturers were willing participants in the automotive excess going on as well. About 30 years ago, marketers connected to the car companies decided that the Monterey Car Week and the associated events in and around Pebble Beach were the equivalent of marketing gold.

“The Drill” for luxury auto makers goes something like this: Design ever more grandiose structures (the quaint notion of “tents” went by the wayside years ago) and tastefully artistic displays either at Pebble Beach or for The Quail (which has been turned into a high-level hucksters paradise complete with its eye-popping luxury “midway”); mine your customer lists in order to invite the cream of the upper echelon intenders (reserving the free luxury hotel rooms for the truly financially gifted as well as for the myriad all-star freeloaders from the media); offer extended immersion test-drives; soak the whole thing in breathtaking scenery and unending booze; then host exclusive “event” dinners and present enough forced frivolity to numb even the most jaded, all in the hopes that it will payoff with one of the golden “ups” plunking down $200,000 plus – and usually much more - for the latest luxury-performance offering from the Belchfire Motor Company (insert your favorite luxury make here).

“The Drill” is so predictable - and so frighteningly expensive – that what started out as the ultimate, personal, one-to-one image wrangling tool has devolved to being a commodity unto itself, so indistinguishable from manufacturer to manufacturer that it’s not hard to see why prospective customers walk away offering collective shoulder shrugs, with lingering impressions embedded deep in their brains of their favorite respective brands trying to out-do each other while getting lost in a coastal fog of sameness.

And lest you think that this marketing hand-wringing was confined to the friendly confines of Carmel and Monterey, the Woodward Dream Cruise itself has taken on the same stench of commoditization. There’s an air of sameness about it that suggests the manufacturers are out of ideas and are now just “phoning it in” in order to be present and accounted for, because if they don’t they would somehow be deemed tragically un-hip. The “WDC” is dominated by the same manufacturers, erecting the same displays, in the same locations along the Woodward Avenue strip. And this has been the standard operating procedure for years now. The lone exception? The Dodge-sponsored Roadkill Nights at the abandoned Pontiac Silverdome was so creatively organic and powerful that I wouldn’t be surprised if a semi-permanent dragway didn’t emerge from the event, it was such a runaway success.

But that was it. The Woodward Dream Cruise has now been commercialized and commoditized to the last possible degree, and the spontaneity that once made it so unexpectedly interesting has given way to a bumper-to-bumper crawl of predictability that is both disappointing and borderline depressing.

But the ultimate expression of commoditization in this business right now? Look no further than what “Sergio the Great” Marchionne is campaigning to do. He believes that the auto industry - as defined by its separate corporate entities - is wasting billions upon billions of dollars on developing mechanical bits and on system redundancies that could instead be shared among multiple manufacturers, things “under the skin” that only the so-called enthusiast True Believers would know the difference, or even care about.

In reality, this kind of commonality and commoditization has been ongoing within the corporate auto conglomerates (Toyota, GM, VW, etc.) for years, with GM starting it all by playing musical chairs with its engines back in the late 70s. The difference now is that Marchionne wants to do it across multiple manufacturers.

This commoditization concept is being laid right at the doorstep of the global auto industry as you read this and there seems to be a faction of industry “experts” who are succumbing to his point of view, too, at least to a limited degree.

Marchionne wants to put Ferrari engines in Alfa Romeos and more Maserati offerings, among other things, and basically share most everything else under the skin – from switchgear and transmissions to chassis components and everything in between - with the global Autoverse so that the manufacturers can increase their profit margins (which are woefully low compared to other industries) and reap untold wealth from this new way of doing business.

Marchionne vehemently rejects the notion that his so-called “visionary” concept for the commoditization of the auto industry is being driven by the fact that FCA is on the edge of serious financial jeopardy, but the stark realities of the FCA numbers can’t be concealed. Marchionne, the consummate mercenary, desperately needs a partner, or his self-made industry "legend" status will be relegated to the dustbin of history, filed under "just another guy with a dream and an extraordinary talent for making the most out of other people’s money."

Ironically, Marchionne's concept of commoditization will play right into the hands of the autonomous car movement, because if the cars are in fact basically “the same” underneath, what does it all matter anymore? And will the leap be all that great from individual brands to appliances boasting uniform sameness that meet government-mandated regulations for space occupancy on the highways and electronically-monitored parking lots?

And what will become of the Monterey Car Week or the Woodward Dream Cruise in another 25 years? A new wave of Muscle Car nostalgia highlighting the first 20 years of the century as we make our way to the hollowed berms of Pebble Beach in our faceless and graceless transportation commodities?

Ultimately, if this business continues to embrace the “commoditization of everything,” the only thing left to protect the integrity of what we know and still find appealing about the “Car Thing” will be two fundamental principles: The authenticity of brands, and the ability of compelling design to create desirability.

In the meantime, we carry on.

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