Category Archives: Cars

Where is BMW’s Vision at Geneva?

IMG_0025The traditional positioning of Mercedes and BMW next to one another at the Geneva motor show provides a neat and obvious chance for comparing Germany’s two traditional powerhouses. And as a show of brand strength Mercedes squashes BMW this year.

Yes, Mercedes is a little brash these days. Chrome and polished surfaces are so ubiquitous that they’re in danger of undermining the quality of the fit-and-finish and engineering.

But being Geneva show neighbours does BMW no favours. It looks reticent by comparison. Understatement is a good thing – and BMW has traditionally been a master of managing and exceeding expectations – but the Bavarian company’s stand gives the distinct sense of a lack of new product and vision.

When BMW introduces new generations of it core models it starts with the 7-Series, followed by the smaller 5-Series and then the 3-Series. The 7 has just been launched, and we’re currently awaiting the 5. With the 7 being a notoriously slow-seller against the Mercedes S-Class, and the 5 replacement set to be revealed later this year, BMW is in limbo.

It’s a position made more uncomfortable by the fact that, in the real world, a new, larger 5-Series routinely makes the 7-Series seem rather redundant. When the latest 3-Series is launched it has the same effect on the 5.

The most significant car on BMW’s stand this year is the 330e, a plug-in hybrid offering the same performance as a petrol 330 for the same money. But it’s there only as a single four-door variant, untrumpeted and barely noticed alongside the i3 and i8. It’s also very clear that BMW is painfully aware of the car’s biggest limitation – reduced boot space because of the battery pack – as there are no standard four-door 3-Series models to provide an unfavourable boot capacity comparison.

The i3 and i8, beautifully marketed though they are, pose another issue: what are the next i cars? BMW leaped ahead of the market when it launched these, making EVs desirable and cool. But they’re bookends, one a true EV solution, the other a £100k sports car halo product. Where’s the middle ground, and what is the technical solution? For a company so brilliant at brand-building and engineering, the lack of narrative is puzzling.

IMG_0028Butting right up against the BMW stand is Mercedes’ vision of the future, a concept car with an interior rethought around the autonomous driving capability. It’s backed up by a plethora of plug-in hybrids, a new E-Class (5-Series competitor) and new variants of the C-Class (3-Series competitor).

BMW is celebrating its centenary this month but Mercedes has trumped it even there, with the deliciously poisonous public statement, “We warmly congratulate the globally renowned company BMW on its anniversary and invite all employees of BMW AG to discover the complete history of the automobile at the Mercedes-Benz Museum.”

p90212587-highres-1A week after the Geneva show opened, BMW marked its centenary by announcing the Vision Next 100 autonomous-driving concept car – a step on from the autonomous Mercedes at Geneva. How the Geneva stand could have done with that. BMW should hold the high ground in engineering for the future. If the Vision had been at Europe’s most important motor show it could rightly have claimed that territory. Far better that than a longer history.

Ford’s future: chillout and chocolate or mobility for the masses?

unlearn_homepagewebbannerThings aren’t getting much easier for the mainstream, high-volume car brands.

At the end of the last decade they were savaged by a perfect storm of a territorial invasion by the German premium brands, the economic meltdown, and the opportunism of the value brands seeking to capitalise on it. Ford, GM and the like were left struggling for relevance.

Visitors to the current Geneva motor show are greeted outside the hall by a vast Ford billboard. It features the new generation of the iconic Mustang muscle car, flanked by the GT supercar and the new Edge SUV, and asks us to forget everything we know about the brand. The Mustang hero vehicle doesn’t even wear the Ford blue oval.

It’s not rocket science to work out they’re saying: we make more than just commodity cars, we’ve got the heritage and we’ve got the SUVs everyone wants these days.

Go inside and another layer of icing has been put on the cake. For the first time there’s a real range of Fords adorned by Vignale sub-branding. Vignale is the company’s premium line, also offering concierge-style customer service. And they’ve pulled off a real coup by installing a Vignale lounge in the departure area of the Geneva airport. Chillout music, free massages, coffee, chocolates, water, workstations and wifi will go down very well with the millions going through the airport – and almost certainly be more effective than the show presence.

IMG_2582Yet what do these things say about the Ford brand? “We make great cars. They’re well designed, comfortable, high-quality and handle well. But we can’t persuade private buyers to consider us alongside Audi, BMW Mercedes and Volvo.” And the focus on the Mustang, GT and Edge – which as a large, expensive SUV will remain a niche choice against the premium competition – makes a telling contrast with Renault. The French brand was the most distressed of all after the 2008 crash, but now boasts a confident, all-new range of cars. No halo products, no premium pretensions; just attractive, honest cars people want to buy, including electric vehicles with dedicated designs.

It begs the question of what Ford’s purpose is. The company appears to be hoping to build brand equity from its niche offerings rather than focusing on what makes Ford a real brand – offering excellent quality products at a mainstream pricepoint. Other companies have done this without denigrating their brand – look at the iPhone. And ironically Ford itself has history here.

Over 100 years ago Ford revolutionised motoring with a commodity product, the Model T. Today, in an age when mobility will alter radically, it should not be beyond Ford to help drive that change for today’s masses, be an enabler, and build an everyman brand which is also a valued one.

Give the Blue Oval back its meaning, Mr Ford, and wear it with pride.

VW – volumes over values

VW Group’s announcement yesterday of its first financial losses in 15 years is not as significant as the loss of brand equity.

volkswagen-scandalThe emissions scandal isn’t ultimately about emissions, diesel or money. It’s about brand. The revelations could be a catalyst to redeveloping the VW brand by focusing the business on a new purpose. And a brand is nothing without a purpose.

The management of VW Group has been giving an object lesson in bad brand stewardship for a long time. As I said here last year (http://wp.me/p3xo5H-6d), in assembling a vast passenger car brand portfolio of SEAT, Skoda, VW, Audi, Porsche, Lamborghini, Bentley and Bugatti, it created a self-cannibalising mess. Skoda and SEAT have progressively been entering the VW brand’s space. VW has been intruding on Audi, while Audi’s aggressive entry into every market segment meant that it was stealing sales from the other three. And with the R8 supercar Audi was even competing with Porsche and Lamborghini.

The obsession with volumes meant that each of the brands was being devalued. At one end of the scale, Skoda – which has experienced serious growth as a value brand – recently stated an intention to start selling on quality, while at the other end the Lamborghini supercar and Bentley super-luxury brands were being commoditised with announcements of SUVs. And the flagship Audi premium brand has become utterly ubiquitous.

3500In the centre of all this there was the core VW brand, squeezed from above and below – just as the likes of Ford, Opel and Renault have been by the premium and value brands – but in VW’s case by its own siblings. It was pushed into the no-man’s land of the car industry, the sub-premium territory which crippled Volvo, SAAB, Lexus and Infiniti for two decades. And at the same time VW was introducing the Phaeton luxury car which offered more quality than the Audi A8, was a credible alternative to a Bentley Mulsanne, and was a car no-one wanted. How on earth did that represent VW brand values?

The reasons for VW doing these things? Greed and arrogance. It was about chasing the global number one status and doing things because it could. It was a case of volumes over values, a perilous trajectory for a brand. And it resulted in the emissions scandal.

Nobody should be surprised that the cheating happened. Car manufacturers are inherently conservative and inward-looking, VW more than any other: these are businesses driven not by customer requirements – and even less by vision and values – but by legislation and sales figures. They routinely cheat the monthly sales figures by self-registering cars, and the EU’s over-ambitious and poorly conceived CO2 emissions reduction targets have inevitably been met with equally expedient and poorly conceived ‘solutions’.

Add to this that VW Group has a toxic cocktail of a structure which lends itself to corruption. Management is too close to the unions, and the company is 20% owned by the state of Lower Saxony, with two of its management board coming from the regional government. 5396a-ferdinand_piech_a_70_ansIt has also been dominated by the Porsche and Piech families, and the comically evil-looking Mr Burns-alike Ferdinand Piech personally sponsored the Phaeton and the 1200bhp, $2.25m Bugatti Veyron vanity product. The latter is only slightly more garish than the vast sums spent by VW managers on their union colleagues on partying with prostitutes like Spring-break teenagers, activities which were revealed in 2005.

pg-48-VW-epaBut legislation and structure aren’t excuses: they’re reasons for better cultural and strategic governance. Even if VW’s now departed CEO Martin Winterkorn were completely unaware of the cheat devices, he is as culpable as Piech for the corporate hubris. It was he who declared an intention to be the global number one by 2018. It was under him that Audi has been boasting of growing from an already overblown 50-plus model lines to 60. And don’t forget that after his accession in 2007 four further brands were added to the group’s massive portfolio.

The good which can come from this is that it raises the fundamental question of what the carmakers’ purpose is, and may prompt them to redefine their brands through that spectrum. Is that purpose simply to grow, or is to make people’s lives better, even transform them? Think of Ford with the Model T, mobilising the masses.

6a00d83452989a69e200e5503ce7028833-800wiBut think even more of VW with the Beetle: how ironic that the company named after the reason for its very existence, the ‘people’s car’, should lose focus so catastrophically. And even more ironic that it then has to redefine itself and so perhaps become a real brand again, even a potential totem for the automotive industry.

Back in July 2014 when I wrote the piece with the link above, Volkswagen was admitting an urgent need for better profits. That VW’s profits are suffering is not surprising,’ I said.’ That’s what happens when a goal defined by volumes is set. If the goal were instead to define and differentiate the brands more clearly, with each given the objective of becoming the most desired among consumers, then the volumes would follow. They would do so more slowly but they would do it sustainably.’

Fifteen months on, I’m standing by that.

Changing the way to buy a new car: it’s 1995 (and Daewoo) all over again

daewoo-mirrorsTwenty years ago today, a company called Daewoo Cars was launched in the UK. It’s since disappeared and yet it’s becoming more and more current.

Car companies are only now beginning to explore new ways of engaging customers, of unravelling themselves from the restrictive dealer model and exploiting the internet – virtual showrooms, pop-ups, and shops in malls; service like you get at an Apple store. Tesla’s first UK outlet opened 18 months ago in the upmarket Westfield shopping centre in London. And now Hyundai has launched a joint venture giving it an outlet at the Bluewater shopping centre in Kent, staffed by plain-speaking, plimsoll-wearing people who are not trained to sell and are not paid commission.

New Hyundai store in Bluewater Shopping CentreHyundai’s partner Rockar claims that the end-to-end web process you can access at the outlet is a world first. It’s not. Fiat abortively launched a near-identical initiative, Fiat Click, in 2011. And if you take the website out of the equation, the business model is Daewoo’s – launch date 1995.

I was part of the Daewoo launch team. We knew that the world didn’t need another cheap Asian car brand, another Proton. But we didn’t want to be a Proton. And we had a clean sheet of paper.

So we tore up the rule book. Then burned it and stamped on it. No dealers; no third-party sales. In an industry bound to the archaic, unfit-for-purpose dealer network distribution model, that made us pariahs. It made us notorious. Which was great for our awareness but it was also smart. The message was that when you dealt with Daewoo you weren’t sold to but advised, by Daewoo employees who were not on commission. We could become number one for customer service, which we did. Overnight.

The result was record share for a new market entrant in the UK – immediately ahead of not only Korean arch-rival Hyundai but also mature brands including Volvo and Mazda – with almost 95% awareness, and the ability to stand shoulder-to-shoulder with M&S as a customer-focused high-street brand.

The Hyundai Rockar model gives a great brand message: we’re modern, we do things the way you want them done, we come to you. That’s part of it of course, but there’s a far more pragmatic driver. Car companies want to go to where there’s high footfall, but city centre land is prohibitively expensive. So let’s adjust the thinking and go to where there’s both footfall and people in a buying frame of mind. And let’s have just one car on display so it feels more like a lifestyle retail outlet.

EE_Daewoo_1_webBut remove the web element – like sat nav, Sky+ and Simon Cowell, Sky+ it didn’t exist back then – and Daewoo was doing all that and more. Showrooms exclusively at retail parks, with interactive touch-screen info pods (yes, in 1995), free coffee and children’s play areas. Smaller outlets at Sainsbury’s superstores with test-drives from the car parks. And more customer touchpoints at the Halfords service centres.

We reassured customers about buying a car from a new name with messages about the then-mighty Daewoo Corporation. When I took journalists to Korea we would arrive in a 747, parts of which were made by the company. We transferred in Daewoo coaches to the Seoul Hilton, built and managed by Daewoo, where we went in Daewoo lifts to rooms with Daewoo TVs. We flew to factories in Daewoo-built helicopters, visited Daewoo shipyards with towering Daewoo cranes, and even watched demonstrations of Daewoo military tanks.

080129-sea-slugThe car operations became healthily Europe-centric. Headed by Ulrich Bez, previously at Porsche and BMW (and later Aston Martin), the company established R&D centres in the UK and Germany. The UK retail model was exported back to Korea and I was asked to advise the global Chairman Kim Woo-Choong’s office on communications strategy – I recall sharing a meal of sea slug with him and Bez in his Hilton penthouse, discussing a plan to establish a manufacturing base in the UK. Strange days but good days.

money-graphics-2005_954555aSo why did Daewoo disappear? Not because the UK model didn’t work but because the Korean economy and Daewoo Corp imploded. The Korean car industry had to be rationalised, so Kia was absorbed into Hyundai, and Daewoo sold off into the old-school homogeneity of General Motors. Oh, and Chairman Kim fled the country in 1999 to avoid charges for his part in the bankruptcy of a conglomerate ranked 18th in the Fortune 500 only two years earlier…

GM rebranded Daewoo as Chevrolet in 2005 before dropping the latter from Europe 15 months ago. And with that the last vestiges of the Daewoo we created appeared to be gone. Dead and buried.

Yet its influence and the trail we blazed in the UK are in the here and now, the new retail motor industry landscape – ironically being championed by Hyundai’s ‘innovative’ approach. So if you hear something strange beating at the heart of the new retail motor industry landscape, remember – that really will be the Daewoo.

Do Keep Up, Honda

keep up honda campaign (3)Honda has a new TV ad. Called Keep Up, it champions the company’s commitment to innovation. It’s typical of Honda’s TV spots – arresting and engaging. But it also encapsulates the problem at the core of the business. Honda makes some brilliant, technically advanced cars. But it makes some very dowdy ones and those are the ones it sells – in dramatically falling numbers.

Honda doesn’t seem to know what it is. And if you don’t know what you are you can’t know how to market yourself. You could argue that Honda doesn’t truly have a brand. And this is a huge problem – because today’s car market is all about brand. Nobody makes a truly bad car any more: a Skoda is a VW is an Audi. So brand is the differentiator.

In recent years Audi, BMW and Mercedes have invaded mainstream territory with smaller, more everyday products, and ultra-low interest rates mean almost anyone can now get into one of their cars. At the same time the ‘value’ brands like Hyundai and Kia have marched into the mainstream. The result? A very squeezed middle.

So life has become extremely hard for the likes of Ford, Opel/Vauxhall, Renault, PSA Peugeot-Citroen and the Japanese carmakers. But where the European brands are rethinking their relevance, the Japanese – with the exception of the now half-French Nissan – are not. Honda in particular.

surtees_2_jan_1967Which is odd, because it’s Honda which has the heritage and the soul to register with customers. There was the tiny but brilliant S600 sports car and the Z microcar. There were the rising-sun liveried F1 cars and world championships for Ayrton Senna and Alain Prost. There was the NSX – a non-images-23vulgar supercar – and the screaming S2000 roadster. There was the pioneering of variable valve timing, hybrids and now hydrogen fuel cells. There was Asimo the robot, and even a new kind of business jet.

And yet customers carried on buying run-of-the-mill Civics and perhaps a lawn mower. The engineering wasn’t working. If it was part of the brand it was a part which didn’t matter to the people actually buying the cars.

The result? A nose-dive in sales since the premium brands re-shaped the landscape. Honda now has a market share in Europe of just 1.0%. That’s behind Suzuki and only just ahead of Mitsubishi. Like Toyota and Nissan, Honda has a European factory, yet it has just a quarter of their shares. And it has been trampled by new brands like Hyundai and Kia, which together have almost six times Honda’s share. Something has gone very badly wrong.

A lack of diesels – ironic for a business with engines at its heart – and a strategic cut in R&D spend following the 2008 crash have hit Honda hard. But the problem is more fundamental than that.

2015-honda-jazz-01-1Honda will say that it’s about to reborn, with a stream of new product. This week at the Geneva motor show it will have a new high-performance Civic, a new-generation hybrid NSX supercar (effectively a Porsche 918 for not much more than 10% of the cost), a production version of its fuel-cell vehicle, a new Jazz supermini and a new HR-V small SUV. But it’s only the latter two which compete in volume segments of the market.

2015-Honda-HR-V-rear-viewAnd the design of the Jazz and the HR-V, like the Civic Tourer, is ungainly, clumsy and dated. That won’t matter to the typical Honda customer, but Honda needs new customers. And new customers will not be persuaded by product like this. Design is now a prime brand communicator. In the years since Honda’s R&D cut consumers have become much more design-literate – the advent of the iPhone saw to that – and car companies have become much bolder.

To be successful today a car company needs a strong, clearly articulated brand. But the brand has to be underpinned by the product – cars which people want. Only then will the engineering credentials and brand messaging count. If the product’s not right the messaging has nothing to adhere to.

So the advertising, like the engineering, currently exists in isolation. It’s great. It wins awards. But it won’t sell cars. Sadly, for business with such a pedigree, it’s Honda which hasn’t kept up.

Davos? Next time take the car

Apparently trust and leadership were the buzzwords at Davos this year. A pity they were only talked about.

croppedimage780520-Davos-Schweiz-Winterlandschaft-Sunstar-Hotels-Davos2The much-quote figure of 1700 private flights bringing the world’s plutocrats into Davos for the World Economic Forum, where climate change was a headline topic, may be too good to be true. About half that number appears to be more likely. But it does highlight the fact that the annual Davos bonding session is, let’s say, something of a contradiction.

The clue’s in the name: it’s an economic forum. Growth may well be the key to reducing inequality, as many were saying last week, but it’s also handy for those more focused on improving their own quality of life. The place is summed up this year by the reported sighting of a monk checking his smart phone. And who knows if anyone saw the contradiction in Google’s choice of party entertainment, the singer Aloe Blacc (most famous song: I Need a Dollar)?

720x405-AP907210667509You couldn’t make it up. And you didn’t really need to. Given the fact that, after years of being pushed down the Davos agenda, climate change was back – and and launching the event with Al Gore/Pharrell Williams double act – what was the WEF (mission: Committed to Improving the State of the World) doing 5000ft up a mountain and 150km from the nearest airport and sizeable transport hub.

private-jet-over-snow-mountains-Pilots-Perspective-Travel-3Sixty-AirAsiaEven if the number of private jet movements was half that speculated, that’s rather inefficient in pilot-to-passenger ratios. And private jets burn more fuel in an hour than a car does in a year. That’s an inconvenient truth.

We know that these people need to move around quickly. We understand that having so many important people gathered together in a single place means we can interrogate their influence. We appreciate that the event focuses them and the outside world on the big issues. But.

Davos could look to an event like Editorial Intelligence’s Names Not Numbers, where some of today’s smartest and most influential people first got together (and still do) in the very real environment of a genteel British Victorian seaside town. It’s not parochial – it attracts an international audience, thinkers rather than figureheads, and the event has now spread to New York and Mumbai.

WEF’s Swiss venue and date early in the year make for an interesting comparison with the Geneva motor show (this year 2-15 Mar). It’s Europe’s major annual auto industry event, so leaders from all over the world fly in. But unlike Davos it’s held at sea level (or at least lake level), and is a 10-minute walk from a major airport and a five-minute train ride to the city centre.

20181_300Road transport contributes around 15% of the world’s CO2 emissions. But it’s one of mankind’s most important tools. Motor vehicles changed our lives. They mobilised us. They enable business. They transform the lives of people in rural communities. They offer humanitarian assistance. They help fight wars. We need them and they’re being reinvented for the modern world.

And Geneva highlights a car industry which achieves more than the lofty talking shop of Davos ever will. The carmakers have achieved minor miracles. In Europe the average CO2 emissions for all new cars will fall to 130g/km this year. The target for 2021 is 95g/km, which will be down 40% from as recently as 2007 – the year before the financial meltdown caused by the world’s political and business leaders, the same people who were at Davos 2015.

In the UK the emissions are down around 45% since 2000, because a buoyant market means that people are buying newer cars with cleaner tech. And all this is before mass adoption of ultra-low-emissions vehicles has even begun.

This year will see Al Gore’s Live Earth concerts, ahead of the UN-hosted intergovernmental climate conference in Paris – tried-and-tested formats for achieving little. Meantime 2015 will also see the first production hydrogen fuel-cell cars and the roll-out of zero-emissions autonomous vehicles. The auto industry is full of brilliant people who achieve results – fast.

What’s the betting that the next 12 months will also see another Davos World Economic Forum in which the same people will hear the same things said before listening to a pop star they haven’t heard of and climbing back into their Citations and Falcons with a diary note of the 2017 event?

Kia – the power to surprise, the power to disappoint

kia-kx35-concept-1A Kia concept, said to preview a China-only SUV model, at a second-tier Chinese motor show. Hardly big news, especially as the industry was focused on the Los Angeles show at the time. But the Kia KX3 unveiled in Guangzhou show a few days ago is an interesting product for what it says about the brand.

Its front-end styling has the same basic form as a Porsche Cayenne, the SUV which saved the German carmaker, accounting for half its volumes and becoming a talisman for the brand in China.

Kia, like its Hyundai sister brand, has been a revelation in the last few years, growing phenomenally and producing very well designed products. It’s secret has been to add good styling to the value brand proposition. But it’s an overstretch for Kia to try to assume some of Porsche’s cachet.

And there’s a very good reason not to ape Porsche design: the Cayenne’s unloved styling was a direct result of applying iconic 911 design language to a front-engined, four-door car for the first time. And the 911’s styling was borne out of the rear-engine layout, meaning that it could have a very low bonnet line. This resulted in a unique – and aesthetically problematic – form in which the Cayenne’s headlights sit above the radiator grille, giving a bug-eyed, ungainly look. There’s been no other car like it. Until now.

Porsche-Cayenne-S-E-HybridThe original Cayenne’s looks were universally unpopular. They’ve been refined but whether you like them or not is not the issue. The point is that they were, and remain, a must for Porsche in communicating its brand: the Cayenne may have been a heavy, high-centre-of-gravity beast but its engineering and dynamics were as cutting-edge as those of a 911. It was an SUV but it was a Porsche. Aesthetics had to be secondary. The design of the Kia KX3 has no such rationale.

Kia has been a revelation in the past five or so years, growing phenomenally and producing very well designed products. In a visionary move, in 2007 Kia recruited the European designer of the iconic Audi TT, Peter Schreyer, to head its styling. He’s since become the boss of all Hyundai-Kia design and the most senior non-Korean in its business globally. In so doing the management has elevated the brands and created a compelling combination of the rational and emotional.

1bUnder Schreyer, Kia has been a triumph of unexpectedly confident, contemporary, original, perfectly proportioned designs – ironically everything that Porsche design is not and cannot be. This is especially true of the Sportage, which the KX3 is, in reality, thought to be previewing.

Now they’re trying to differentiate Kia from Hyundai, especially in design terms. They want to add more emotion and sportiness, and a stronger design signature. But the best brands are aligned with great original design: think Apple. And they give consumers what the consumers don’t know that they want: again, think Apple. Allowing the Chinese market to define wider product and design strategy would be a mistake.

Kia is on the rise. It’s just been ranked 74 in Interbrand’s 100 Best Global Brands, with brand value up almost 500% since Schreyer’s arrival. It’s fulfilled the brand message ‘The Power to Surprise’. But if the KX3 signals the next design phase it also has the power to disappoint.

Large MPVs – the next big thing?

Renault-Espace-0Large, stylish MPVs could be making a comeback. At the recent Paris motor show Renault relaunched the Espace as a bold, well designed MPV-cum-crossover, and Ford showed the latest S-Max, which will be a recipient of the company’s new Vignale luxury trim and concierge service.

The premium brands are making moves too: Paris saw the launch of the production BMW 2-Series Active Tourer, a compact MPV, while Mercedes – which replace the MPV-style A-Class with a conventional hatchback a couple of years ago – reaffirmed its interest in that segment by revealing a new B-Class.

That the two German premium brands are investing effort into MPVs is significant, but they may be missing an opportunity beyond the compact, higher-volume segments. Large MPVs are a neglected niche: after Toyota introduced the innovative and stylish Previa in the mid-1990s, the territory was commoditised by the mainstream brands, with utilitarian van-based models and products marketed as bland school-run devices offering space but no character and a mediocre driving experience. MPVs had become merely ‘people carriers’.

SUVs then entered the marketed. They were premium. They needed to be, because of the cost of the four-wheel-drive technology and – starting with the first BMW X5 – the additional cost of engineering decent handling into a heavy, high-centre-of-gravity lump. But more importantly the SUV concept was American, so they were marketed as lifestyle vehicles, recreational tools. They enhanced your life rather than announcing to the word your grim acceptance of its responsibilities.

Of the premium brands only Mercedes persevered with the large MPV, but its products have remained van-based. So Renault may have hit on something with the new Espace. Not everyone wants an SUV – Audi Q7s, BMW X5s and Mercedes MLs have begun to symbolise some of the less appealing characteristics of the monied middle-classes. And very few need off-road capability.

2015-volvo-xc90-steering-wheelI was with a Volvo strategy guy at Paris and it got me thinking. I’d probably buy an S-Max if it had a different badge. I’d almost certainly buy the Espace if they produce it in right-hand drive. But I’d far prefer it with a Volvo badge.

Volvo can carry off a contemporary interpretation of a large, MPV. It has the brand-width to do it (unlike Jaguar, another near-premium brand, which can stretching itself to SUVs but no further). An MPV would suit Volvo’s brand values and its design aesthetic. Volvo is about stylish functionality – vehicles with a purpose but also a personality, confident but classless, luxurious but life-2015-Volvo-XC90-interior-controls-press-imageenhancing. And its products are increasingly about cabin design – supremely comfortable but understated, ergonomically intelligent, with natural materials, authenticity and the influence of Scandinavian home interior trends. What better medium to express this than an inherently spacious, light and flexible MPV cabin?

Volvo’s boss recently said that until 2020 it will only replace existing models. That’s a pity, because there’s a gap in the market and a brand fit. And if Volvo were to fill that gap it would challenge the German big three by setting a trend rather than merely offering an alternative to a product type already offered by the competitors. Which would make the brand far stronger.

 

Paris motor show becomes a brand catwalk

The cars aren’t the stars so much as the narrators at motor shows these days. They tell an interesting story – how car brands are striving, and in may cases struggling – for relevance in an astonishingly competitive, over-crowded market.

The Paris motor show going on right now does this more than any other, because it gives centre stage to France’s own: Renault, Peugeot and Citroen. Three brands which have always struggled on the international stage and were floored by the economic crisis in Europe.

5169344898592298Citroen used Paris to launch the separation of its DS line. DS models offer Mini-like personalisation and high-quality materials, and they’re sold at a premium so there’s more profit. The mother brand’s mainstream products are hugely improved, but for years they’ve been piled as high as the Eiffel Tower and sold as cheaply as a plastic Paris bistro table cloth. Lining one up alongside a DS in either a motor show or show room only distresses the latter – and its profitability. The super-sculpted DS Divine concept in Paris was there to show that DS products are going to have unique styling to ensure greater differentiation. And greater profit.

Fellow PSA brand Peugeot believes that if it offers excellent quality at mainstream prices the numbers will happen. And today’s Peugeots are well-designed, with thoughtful interiors, tactile materials and good build. It’s an impressive turnaround. But there was little new in Paris. Even the Exalt crossover concept had been seen before – at the Beijing show. That betrays its ambitions in China, but for Europe there are only facelifts until the end of next year, and for a company still dependent on Europe that’s a concern.

017E00D707663739-photo-renault-espacePSA has refused the budget-brand route, unlike Renault with Dacia. The Romanian brand has been propping its parent up over the last couple of years, but now Renault has emerged with excellent new product of its own. The Fiat 500-esque Twingo will give some fizz back to the brand, while the styling has a new-found confidence, shown in the Espace revealed in Paris. It’s an MPV with a low, muscular stance and an interior which wouldn’t look out of place in a Range Rover.

It could be a breakthrough for Renault in the large-car market where it’s always struggled, but the company is giving more prominence to its Initiale sub-brand. Unlike DS, Initiale won’t spawn models but a new luxury trim level. Ford is doing something similar with its Vignale line, seen in Paris in the form of a dedicated merchandise and accessory boutique on the stand. The new S-Max and Mondeo models revealed at the show will lend themselves well to the Vignale treatment, and there’s nothing not to like about the concierge-style service offered. But it’s very hard to see Ford conquesting customers from the premium brands without a product as bold and surprising as the Espace.

The approach being taken by Ford’s principal mainstream rival, Opel, is more in line with Peugeot’s: everyday, good value products with increasing quality and sophistication. But GM’s new dawn in Europe after the dropping of the Chevrolet value brand was signaled in Paris by the new Corsa supermini – an everyday car in one of the traditional segments you still have to be in. The new car has been developed from the old one’s architecture, which is fine – VW has done that with the Golf in the recent past – but it’s a mistake for the new Corsa to look so similar to the outgoing car. GM listened to what customers said about the old car, and this is the result. When did Apple last do that?

GM Europe has acquired several senior VW people in the past year or two, so perhaps it’s become a model for the Opel revival. VW keeps doing what it does best – granite-like rationality – and the evolutionary new Passat in Paris could have gone unnoticed.

Paris saw the world debut of Volvo’s XC90. It’s a wholly more convincing way to usher in a new era than Opel’s, but it’s not bang-on. The XC90 is the right car to go with to send the message that Volvo is an upmarket lifestyle brand. And the interior – which is what really matters for a Volvo – is a lovely place to be. But Volvo is now a design-led brand, which has not translated fully to the slightly utilitarian exterior. And the pricing is ambitious – maybe too ambitious. Volvo needs to escape the ‘near-premium’ straitjacket but it will do that more effectively by concentrating on being what it is – a genuine alternative to the premium brands – rather than aligning itself more closely with them on price.

IMG_0974The opportunity for Volvo is clearly there when you look at the established premium market leaders Audi, BMW and Mercedes. Each is intent on offering something for absolutely everyone, which means creating new sub-segments. Volvo is too small do do the same, but that allows for a clearer brand statement. There’s a growing feeling in the industry that fragmentation has its economic limits, but Audi is intent on a 60-model range by 2020, including a family of TT models based around the TT sports coupe, likely to include a TT SUV. Paris saw the unveiling of a five-door TT concept, less of a leap and something of a return to form on the design front. It may not sell as many as a TT SUV but it would serve the brand better.

Over at Daimler, Mercedes’ effort to match Audi’s range was amply demonstrated in Paris by the simultaneous launch of the exotic AMG GT sports car and the smart fortwo and forfour city cars. BMW showed a new version of the unloved X6 coupe crossover which only highlighted the lacklustre design running through its range. Interior materials are on the slide too. It’s hard to avoid the thought that the company’s best people have been working on the game-busting i3 and i8 electric range.

2016-jaguar-xe-parisThis background may help Jaguar. Like Volvo, it’s small and it has to get the segments and products right. The new XE compact executive car – a 3-Series rival – is its most important car ever and was revealed in Paris. Quality seems excellent and, crucially, it’s different from the German premium offerings it has to compete against. It’s visibly a Jaguar, even if the rear-end styling is somewhat generic. But perhaps that’s deliberate: BMW has become a major fleet player with the always-inoffensive 3-Series over the past 10 years.

Jaguar’s sister Land Rover brand showed the Discovery Sport in public for the first time in Paris and, like the XE, it’s a vital model for the business. Its smooth, compact shape contains a cleverly packaged interior with seven seats, but it’s a further step away from Land Rover design and brand values and towards a generic Range Rover/Land Rover look and purpose.

Hyundai and Kia offer a surprisingly relevant viewpoint here: hugely successful as a merged business producing essentially the same products with unique styling, the group is now making a concerted effort to formally differentiate the look and brands further. It’s an enlightened approach from a business which took the original Audi TT designer Peter Schreyer on board and elevated him to president status. Kia’s aggressive-looking new Sorento large SUV, and Hyundai’s sophisticated new i20 small car, both revealed in Paris, articulate the new positioning well.

The Hyundai-Kia group has frightened the life out of the Japanese brands, and in Paris you could see why. Toyota was the most impressive, and is finally concentrating on communicating its pioneering position in low-carbon solutions. It gave a European debut to the the production fuel-cell car which will go on sale in Europe next year, plus a hybrid crossover concept to compete with the Nissan Qashqai crosssover. Toyota may lead on technology but it lags behind on product planning.

Nissan launched its Pulsar hatchback, almost a decade after replacing its conventional offerings with crossovers. It may be a market necessity but it weakens the brand positioning, and suddenly, Nissan’s position in the market is looking weaker than alliance partner Renault’s.

But it’s better off than Honda, which now sells only fractionally more than Mitsubishi in Europe, and is behind Suzuki. It’s way behind Mazda, with its ‘go our own way’ approach, and despite having new cars on the Paris stand Honda looked outdated and lost.

Honda is competing in a market packed with brands which are becoming better defined and more expressive. They’re not all going to succeed. But without investing in the brands the carmakers will lose relevance and ultimately fail. Shows like Paris remind us that modern cars are extraordinarily capable, technical marvels which are a tribute to their engineers and designers. They’ll very soon be driving themselves. But they can’t sell themselves. In a market where high-quality cars and affordable finance come as standard, brand engagement will decide consumers’ purchase decisions.

More Discovery, less Land Rover

The replacement for Land Rover’s compact, family-friendly model, the Freelander, was announced this week with a new name – the Discovery Sport.

lr_ds_statics_07Pulling the Freelander into the Discovery range is a sensible move for the Land Rover/Range Rover brands. It rationalises the model ranges, and it co-opts a name which has assumed sub-brand status thanks to the Discovery’s combination of modern but uniquely Land Rover looks and unbeatable functionality. The intention is clear from the oversized ‘Discovery’ bonnet badging where ‘Land Rover’ used to sit.

The new Discovery Sport has been engineered and packaged to provide more space than the outgoing Freelander, including a third row of seats, in a barely-bigger footptint. That’s clever. And it manages it while looking sleeker, more premium and completely contemporary.

But in doing so it leaves behind the Land Rover design language which has helped make the existing Discovery a brand icon and a statement of resolute differentiation from SUVs produced by other brands, which are mass-adopting a lower, less utilitarian look. The exterior styling also has a lot in common with Range Rover’s urban, fashion-oriented Evoque model, and plenty of similarities with the Evoques’ big brother.

It even shares that Range Rover’s Sport tag. This merges and confuses the two brands. But, more importantly, sportiness has little if any relevance to Land Rover. It’s diffuses the brand.

So what makes the Discovery Sport a Land Rover? And what will make the Discovery replacement a Land Rover? It’s no longer the styling – if anything, Range Rovers now have the more utilitarian body shapes. And it’s not the core value of functionality – after all, the Range Rover Sport also offers seven seats.

The increasingly high price point for Land Rovers doesn’t help. At launch – with only one engine, taken from the existing car – the Discovery Sport will cost from £32,000 to £43,000. A few options and the price will creep towards £50,000. That’s well into Porsche Macan territory – an SUV which is sporty because the brand dictates it.

Compare Land Rover’s price positioning with, say Audi’s. Equivalent versions of its Q5 SUV range top out at £37,500. OK, it’s not a Land Rover – but if the unique identity of the Land Rover brand is diluted then so is the emotional appeal of its products. Which is where Audi, BMW and Mercedes come in. They’ve aggressively targeted every market segment, especially SUVs. They’re premium but they’ve opened themselves up to everyone rather than adopt exclusive pricing. They’re a threat, the more so as Land Rover becomes more premium and less obviously functional.

Land Rover makes excellent cars. Sales will continue to grow in the short-to-medium term. But it has serious brand challenges. It should ensure that sales ambitions don’t shape the brand, and that Land Rover’s brand differentiation, achieved over decades of leadership, is both preciously preserved and clearly stated. That starts with the design of the product, but with the Discovery Sport it has become more generic. In the long term that’s going to help Audi, BMW and Mercedes more than Land Rover.