The furore over the looks of the BMW X7 concept car revealed at the Frankfurt motor show this month, which triggered criticism of the company’s entire presence at the show, was not, at its heart, about design or product.
The X7 betrays a BMW brand which has gradually been losing its sense of purpose. And now it appears to be forgetting what its values are, just when it needs to evolve them into a relevant proposition for a market undergoing massive change. There’s a cultural confusion infecting how it develops products which need to resonate with a changing marketplace yet still articulate the brand. This, then, is a brand issue.
The current trajectory can be traced back to the early 2000s when BMW commoditised itself by selling the 3-Series heavily into the world of discounted business fleets and aggressively targeting the less brand-conscious private customer with cheap leasing deals. The 3-Series became the new Ford Mondeo. Its appeal was a prestigious badge but the trigger was affordability. The badge began to stand for driveway bragging rights, not engineering, and the ubiquity made it, well, common. And meantime BMW was becoming more a bank that sells cars than a car company. This was a big cultural shift.
More recently the company has, like its rivals, thrown itself onto the altar of the SUV. The problem for BMW was that it had no brand heritage in four-wheel drive vehicles. It bought Land Rover, absorbed the technical knowledge and promptly sold it off. But technical know-how is not the same as brand equity or fit; Mercedes-Benz and Audi, on the other hand, had history in proper off-roaders and performance-oriented 4WD systems respectively.
BMW merged its new-found 4WD knowledge with the chassis engineering for which it is rightly renowned to create the X5, the first SUV you could corner like a conventional car. An impressive engineering achievement, but one which summed up the coming confusion: the brand whose strapline was ‘The Ultimate Driving Machine’ was engaging its engineers in trying to make a car with a high ride-height, high centre of gravity and excessive weight from the 4WD system do things which a conventional car would do much more easily. The 4WD would probably never be used off-road and was not there to improve handling dynamics. It was work of inherent engineering compromise. And it compromised the brand.
Porsche did the same with the Cayenne of course, but Porsche needed saving; BMW didn’t. Every third car made today by BMW is an SUV, and the production X7 will book-end the line-up with an X2 model to be launched in early 2018, both additions to the range. With the lust for SUV volumes came a dip in quality. And the compulsion to proliferate, to find niches nobody has asked for, led to cars like the dumpy and universally disliked 5-Series GT and, more recently, the X4 – a visibly confused creation which is neither fish nor fowl. Or perhaps it’s both.
BMW then brilliantly took the initiative on the first of the big new challenges facing the car industry – low carbon. It stole the electric vehicle high ground when it launched the i3 and i8, making EVs desirable and cool overnight. Yet one is an urban-centric EV solution, the other a £100k sports car halo product, with nothing in between and no longer-term narrative. And that was four years ago. Only in the past couple of weeks has it indicated its next move, in the form of the iVision concept, expected to go into production as the i5 – but not until 2021. Mercedes, Audi and VW have all articulated more coherent strategies and have already started to occupy the premium EV territory.
And now, of course, the low-carbon imperative has been joined in the list of key challenges by automation and the sharing economy. Automation squarely challenges BMW’s indelible mantra of ‘The Ultimate Driving Machine’ – how is this sustained when cars not only drive us, but when integrated mobility dictates that commoditised pods shuttle us around our cities in bland efficiency. Does BMW become merely the hardware provider? And car sharing is, by definition, a cultural shift where not only ownership but brand allegiance are secondary to the ideology, service and efficiencies on offer.
These challenges are the same for all carmakers of course. But they’re greater when your fundamental brand tenet has been about the pleasure of taking the wheel.
This is why BMW shifted its emphasis away from ‘The Ultimate Driving Machine’ to ‘Joy’ a few years ago. Joy was still the core theme in a presentation given this summer at the Automotive News Congress in by BMW’s brand boss Hildegaard Wortmann. But it means nothing. It’s feel-good lifestyle marketing-speak which could be applied equally to SEAT. It’s not a principle or a solution.
The vision of the brand she gave was strapline-centric – one where it’s hoped that customers will somehow absorb generic messaging and convert it subliminally into something meaningful, rather than one where the business’s culture, products and services define the brand, and where straplines are a consequence of demonstrable values and real assets.
There was little substance on how BMW would achieve relevance among an audience which does not want to own or lease a single car, and the impression given was that the company feels a need to outsource its brand articulation to Millenial-derived content generated by social media campaigns.
For BMW or any major carmaker to truly flourish in the new automotive market, they need clarity of vision and the courage to use their brand values as the foundations for addressing changing market needs.
BMW doesn’t appear to be doing so. To see how to use existing brand values to reinvent a brand for the age of EVs, automation and sharing, it need only look at Volvo. If safety, practicality and family-friendliness can become cool, what can the can The Ultimate Driving Machine become?
There are no easy answers but BMW, surely, can find them. Meantime they can be confident about that Joy isn’t one of them.
The excellent speaker line-up reflects those changes. With SEAT, Lamborghini and Italdesign all on the speaker’s podium, VW Group is somewhat over-represented – that’s because SEAT’s the Host Sponsor, but it also means we get to hang out in Barcelona. And the line-up does reflect many of the changes facing the industry.
Audi, the recent king of volume growth among premium brands, is about to be overtaken by Mercedes and slip to third in global premium-car sales.
It’s often said that car sales are a barometer of the economic climate. But, in the UK at least, they’re not – the booming market of the last five years has been way sunnier than our overcast economic conditions.
the highest since the banking crisis. Car dealer finance is a big part of this, accounting for £28bn in 2015 – twice what it was just four years earlier. Four out of five new cars are bought using borrowing, and today the car companies are effectively banks which sell cars. Finance is a core profit centre, and the PCP loans which the majority of customers take out to gain usership – not ownership – a brilliant retention tool.
The difference between the UK and most European countries is that we’re a finance-driven economy and they’re not. What does that say about Brand UK, our character and values? That we’re a nation of borrowers. That we’re no longer creators but consumers (preferably of German cars – VW, Audi, Mercedes and BMW alone account for almost 30% of the market). That we support our financial services industry more than we do our domestic car industry. That we see our cars, like our homes, as a measure of our success, yet we usually own neither. We just own the debt.
The strongest statement by any company at the Geneva motor show has been made by one which isn’t even there.
It’s something we all engage with on a daily basis without even registering it – every smartphone is highly personalised, not so much by covers and wallpapers as through the apps we choose. MINI knows this: the car of the future will be personalised through use of technology, not just paint and trim.
The 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.
Butting 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).
A 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.
Mark Carbery 