Tag Archives: BMW

Recovery gets real at the Geneva motor show

genevaWith the glitter of last week’s Geneva show’s press day reveals having been swept away and the dry ice cleared, now’s a good time to reflect on the what it meant for the business.

The Geneva show always provides an annual shot in the arm for the motor industry. It’s at the start of spring, in a bubble of snow-capped mountains and clean air, with the God Particle leaving nearby. Switzerland has no OEMs so it’s neutral – no Frankfurt or Paris-style shows of national strength. And it allows the niche producers to sit among the big players in the main halls, so exotica and design are as prominent as commoditised volume cars. It’s a good place to be, even in a post-recession landscape.

But, ironically in a market showing the first signs of sustainable recovery, this year the event came with an unusually large dose of reality. It’s as though the industry doesn’t want to push its luck, to be distracted from a hard focus on that recovery. Which is hardly surprising: in spite of five consecutive months of growth in Europe, sales are still a very long way off pre-recession levels – three million units in fact. Almost all of the OEMs are losing money in Europe, and incoming PSA CEO Carlos Tavares was quoted in Geneva saying that making money hasn’t been part of its culture, and neither was it at his previous employer, Renault.

So it was appropriate that many of the key press day launches were focused on the more fertile market opportunities. But that paradoxically comes with some challenges – for both bottom lines and brands.

Renault_TwingoThe rash of new city cars from Toyota, Peugeot, Citroen and Renault will deliver volumes. They’re cars for our time – cheap, urban cars with an injection of fashion, fun and flair. But small cars and small price tags also offer small margins, especially when they have the quality demanded by downsizers and the Apple generation. The development cost-sharing for the Toyota Aygo, Peugeot 108 and Citroen C1 will have helped, as will the Renault’s Twingo’s joint development with Daimler’s next-generation Smart. But these are not the cars those companies really want to be shifting. They’re cars for the marketers, not the FDs, better for long-term customer acquisition and upselling than short-term profits.

BMW_2_Series_Active_Tourer_at_the_2014_Geneva_Motor_Show_BMW_52185BMW’s 2-Series Active Tourer has properly given its brand and marketing people something to think about. It’s two things a BMW has never been before: front-wheel drive and a family MPV – in effect, an aspirational Kia Carens. Mercedes-Benz has trodden the MPV path already with the A-Class, and has reverted from a clever, one-box design to a conventional hatchback. The B-Class has retained the one-box shape, but Mercedes makes vans; BMW makes the Ultimate Driving Machine.

However, BMW’s strategy is conservative compared with what led to the Geneva debut of the Porsche Macan compact SUV. Barely a decade ago, ‘Porsche’ and an ‘SUV’ didn’t belong in the same garage, let alone the same sentence. Now, thanks to the Cayenne, they’re synonymous, and over half of Porches are front-engined and four-wheel drive. The SUV may have saved Porsche but the company made the SUV a global phenomenon.

I’m not sure BMW will be hoping that it does the same for the front-wheel drive people carrier. It’s brand people may have to be as clever as its engineers over the coming years.

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Jaguar – the power to change the world?

jaguar-teaser-hed-2014_0Jaguar is going for it. And, you have to say, doing great things with how it’s communicating the brand. British, edgy, daring, contemporary, it’s making the most of the freedom it has compared with the premium-brand grandees Audi, BMW and Mercedes. It’s Paul Smith to Hugo Boss, Arts and Crafts to Bauhaus, Virgin to Lufthansa, The Who to the Scorpions. It’s punk premium.

The German carmakers can’t reinvent themselves like Jaguar’s doing. They’ve got solid-core brands and big market shares to protect, and are now mainstream players. They sell in every segment of the market, including to fleet managers and folk who would have been driving Fords and Peugeots until a few years ago, whereas no matter how successful Jaguar becomes it’s going to remain a relatively small-volume player. But unlike the other small premium brands, Lexus and Infiniti, it has heritage, so it can communicate like a niche brand, in a confident and exclusive way. It simply doesn’t need to appeal to everyone.

So it’s pushing the boundaries, and the high-profile Good to be Bad campaign works well, at least for the USA. The ad has been well cast with alternatives to the mainstream: Tom Hiddleston isn’t yet stereotyped, and Mark Strong, essentially a supporting actor, makes for a believable villain. Yes, since playing the terrifying Don Logan, in Sexy Beast, Ben Kingsley exudes barely contained psychosis – someone Ray Winstone wouldn’t want to meet in a dark alley. And yet he’s suitably ambiguous, a richly spiced mix of Gandhi, RSC and Iron Man. This is a sharp selection of bad boys for the new brand.

But the use of actors and celebrities, no matter how carefully chosen, is a well-worn route and a rather prescriptive brand tool. We don’t really think that the good-to-be-baddies drive Jaguars.

Jaguar is cooler than this. Earlier this month, somewhat more quietly, it launched the ‘100 Most Connected’ list with GQ, first F-Type customer Jose Mourinho and the very now Editorial Intelligence organisation, which connects the UK’s most influential people and curates relaxed meeting-of-minds get-togethers. The next one is at Aldeburgh, the Victorian Suffolk coastal town. True, it now serves as a seaside London suburb, but it’s very deliberately not Davos.

In engaging with this community Jaguar is aligning itself with state-of-the-art thinking: we’re now in a networked world, where who you know means what you know. Where top-down power is beginning to be unseated by a free flow of information. Where companies are beginning to value knowledge and thinking as much as revenues and profit. Where CSR is beginning to be questioned by a genuine desire to improve the quality of people’s lives. Where we need companies, brands and politicians to believe in what they’re doing.

So here we have Alain de Botton and David Beckham, Peter Fincham and Lionel Barber, Idris Elba and Andrew Neil holding hands in the Most Connected list, gazing out at the sea and feeling the sand between their toes. With Jaguar in amongst it. The message is that the company is progressive enough to embrace the new, post-recession world – one in which failure of the financial system, the need for sustainability and the growth of digital interaction have created a real shift in the way people think and communicate. Jaguar is absorbing influences from the varied spheres which a company providing something as vital as mobility should do.

In an essentially conservative, old-fashioned motor industry driven by the imperative to sell and month-end figures, Jaguar is probably the only brand which can do this. It has an extraordinary opportunity – to demonstrate an understanding that, in future, brands will be shaped not so much by traditional marketing messages as by changes in corporate thinking and behaviour. By actions rather than words. By engaging with people. By doing good.

Utopian vision? It’s happened before. As Henry Ford, the man who mass-mobilised the world, said: “To do more for the world than the world does for you – that is success.”

Note: Go to http://www.citizenrenaissance.com for more about progressive communications from the UK’s leading exponent Robert Philips, ex-Edelman EMEA President & CEO and founder of http://www.jerichochambers.com

Frankfurt reflection #1: i3 makes an impact

Frankfurt i3The BMW i3s shuttling journalists around the vast Frankfurt IAA showground last week may have given us a glimpse of the future in more ways than one.

With its road network, surrounding office blocks and on-site railway station and hotels, the Frankfurt Messe site perfectly created a vision of the megacity which BMW has been planting in our minds as the habitat for electric vehicles. And the i3 was in its element, moving four adults around in style and surprising comfort, with zero tailpipe emissions, swiftly – excitingly even, with huge and immediate torque on tap – and silently.

And that’s the thing. So silent were they, with almost no noise from the skinny tyres, that it was almost impossible not to step in front of one. I nearly did. The drivers learned to play it very safe, assuming that pedestrians would not notice the car and giving them a 5-metre berth. One admitted to having hit someone on the first day.

It demonstrated how much we depend on our hearing in such situations, and makes you wonder if some sort of pedestrian avoidance system will become necessary. Or perhaps a horn with a V8 soundtrack.

Jaguar to land on aluminium feet

22-2014-jaguar-f-type-fdThat Jaguar is set to build compact cars is not a surprise. It’s a necessity and a belated one at that.

The brand has to grow and to do that it has to diversify. Large, essentially traditional saloon cars and sports cars are not enough. It’s 10 years since Porsche started producing the Cayenne SUV, which now provides over half its sales. And in that time BMW, Mercedes and Audi have transformed their product ranges by introducing new models into parts of the market they’d never previously touched. Including downsizing into compact and mini vehicles as well as SUVs. This is where the growth is, and will continue to be as the Chinese market dynamics shift from luxury for the wealthy few to affordable premium for the new middle classes.

Add in the facts that the compact Range Rover Evoque – a daring departure for the brand – sold more than twice Jaguar’s total volume in 2012 on its own, and that the Jaguar brand accounted for less than 20% of Jaguar Land Rover sales in the first half of this year, and it’s clear the new strategy is not a choice for Jaguar. It’s an imperative.

But it’s one which needs extremely sensitive handling. Jaguar is not a German premium brand. It’s a British brand with heritage. And a royal warrant. When the prime minister climbs into his XJ it’s a statement of pride, not efficiency. Mercedes are driven by taxi drivers. Audi has diversified to the point where it is commoditised – you don’t need to look anywhere else, whatever kind of car you want.  BMW has even invented a few sub-niches of its own. Jaguar doesn’t do these things and doesn’t need to.

The mere fact that a 3-Series rival and an SUV will bear the Jaguar badge will be enough of a leap. Remember that Mercedes makes trucks. Audi has its roots in NSU, which made lawn-mower engines. And BMW used to make three-wheelers. Whereas Jaguar established itself making desirable cars, with sporting pretensions.

It has therefore recently been busily reinventing its image around sportiness, with core brand campaigns centred on athletics and cycling – where Britain currently excels. Compact mainstream models and especially SUVs don’t lend themselves to this. But Jaguar is cleverly taking the route of aluminium architecture for the new cars, meaning light weight for better handling and performance. This will help the brand fit of the new cars – and, just as important, add premium perception and differentiation.

The sales model for the new Jaguar SUV will obviously be its cousin, the Evoque, but the model for its positioning and image will surely be the Macan, Porsche’s new smaller SUV. Porsche has done Jaguar a huge favour by making an even bigger leap first.

Does i3 blow away the Leaf?

wallpaper-1600x1200-9BMW officially announced the first of its new range of electric vehicles yesterday with a simultaneous launch in Beijing, London and New York.

That tells you a lot: the company isn’t trying to convince anyone that the i3 is anything other than a city car, and one for style-conscious customers at that. It’s not any everyday car. BMW has a likeable honesty – electric cars are a compromise, but this one is less of a compromise than the rest. The company has made sure of that by offering two versions, one battery-only, complete with range anxiety, and a range-extender version with a petrol engine for topping up the batteries, similar to GM’s Ampera/Volt.

BMW has taken a properly ground-up approach to the design and engineering, with an innovative CRP passenger cell and largely aluminium chassis. So it’s light, offsetting the battery weight and helping ensure that is has the handling a BMW needs. And it has more torque than BMW’s own Mini Cooper S, so it’s quick.

But if the i3’s a game-changer it’s in the fact that it’s desirable – and not just because of the badge. It’s stylish and, critically, looks truly contemporary and different from everything else. The interior design is as modern as the technology and as clean as the emissions, with interesting fabrics, light tones and pale wood trim. Trim levels have names like Loft and Suite. Two iPad-like screens give an Apple-like feel. BMW could have made an electric 1-Series but this looks like a concept car. Or a Danish architect’s living room.

It’s cool and hi-tech, as an electric car should be. And it sensibly applies that technology to the practical task of overcoming some of the problems of EVs: the i3 comes equipped for fast charging, and a clever sat-nav system suggests ways of extending the battery range and directs you to charging points.

But the killer app is the cost. Priced from £25680 in the UK for the standard version and £28830 for the range-extender, including the government grant, it makes life uncomfortable for the Vauxhall Ampera (£29995) and even the Nissan Leaf (reduced to £20990). These are larger cars, but that’s not where the market is right now. People want premium and they want it in smaller cars, which happens to suit electric vehicles. So BMW’s answer is different – if i3 owners want to use a larger car occasionally they’ll be able to use something else from the BMW range.

The i3 will be successful precisely because BMW has understood that electric vehicles necessarily have limitations. Except in their appeal.