Tag Archives: advertising

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.

Volvo – more upright, less up tight

13195_10151460597409489_20262807_n-1I’ve just been reading about the new Volvo ad campaign running in the USA. It seems Volvo is now nailing its identity, how it differs and how it’s relevant. And the economic conditions of the last few years mean it’s more relevant than it’s ever been.  In a world where culture is moving away from flashy displays of wealth and towards authenticity, the market has come towards Volvo.

The company has traditionally struggled to get a seat at the premium table. It’s been sub-premium, which is a mighty difficult position to communicate as a virtue, especially to potential new customers. So Volvo became stuck, and with the premium German brands entering lower-priced market segments its task became a lot more difficult. Over the past few years, however, it has realised that trying to compete on exactly the same terms with BMW, Audi and Mercedes is futile, and that it has more relevance as a brand whose products transcend traditional aspiration and perception – occupying its own lateral space, outside the vertical hierarchy. And its hands-off owner, Geely, is giving a great example of brand stewardship by allowing this to be articulated.

Today’s teaser shots of a new concept, a coupe which is exciting but retains Volvo’s solid design language courtesy of new chief designer Thomas Ingenlath, shows Volvo can be taken to new levels of desirability. And Volvo is about to become a leader brand with the launch at the Frankfurt motor show of a cutting-edge new engine family and platform. Yet for all the new sleekness and new-tech, the car which Volvo4has been the catalyst to Volvo’s recent brand journey is the decade-old XC90 SUV. It’s become the default family transport – even Jeremy Clarkson has owned them. As nicely executed as an Audi Q7 and more practical than even a  Discovery. The German brands have massively expanded their product ranges in recent years, inevitably going into SUVs, but range diversification works best if it’s based on real brand values, and the XC90 was an extension of Volvo’s undisputed practical-box-on-wheels principle, reinvented as a lifestyle package.

Volvo is a genuine lifestyle brand. The cars are a pleasure to use and to own, for real people – they’re even more usable than its estate cars of 25 years ago, but now in an aesthetically pleasing form with an increasingly authoritative use of Scandinavian design principles applied to comfortable, well equipped and well-made interiors, with cossetting safety. A Volvo is good place to be – like your living room on wheels, with everything just where you want it. It’s about practical style.

And there’s a kind of luxury in that, never mind just premium value – like a hotel which discreetly anticipates your needs rather than welcoming you with a magnum of Cristal. The cars are understated, work well and are satisfying to use, rather like Apple products. You may not have heard these two brands in the same sentence before, but Volvo, like Apple, is a classless brand. Drive one and you could be a business executive, architect, antique dealer, writer, farmer or housewife. Nobody will judge you and nobody will dislike you.

This is the point of the new ad campaign – http://youtu.be/umzNMC13QEk. A Volvo is less shouty than a Mercedes. A Merc announces itself loudly these days, with its body bulges and creases and its cabin-full of buttons and chrome. Volvo has become the antithesis of this. Ironically it’s now not that far from where Mercedes used be – well made cars with integrity and clean, modern design which become a friend to the owner. Volvo is The Killing, Mercedes more like a Jon Woo film.

Cars say a lot about their owners. But for Volvo what’s important is what they don’t say.