Tag Archives: SEAT

Automotive News Europe Congress: why brand, Barcelona and Amazon matter

barcelona-913487_1920

The big issues facing the automotive industry were all there at last week’s 20th Automotive News Europe Congress Barcelona. But the order of importance is shifting.

Connectivity was the headline act. LYNK & CO’s Alain Visser made sure of that with a punchy presentation to open the event (see previous blog piece, LYNK & CO goes back to the future). Integrated mobility, and how connectivity can facilitate its provision, was a strong support act. Electrification in the form of plug-in vehicles was pushed from centre stage though: as Luca de Meo, President of event host SEAT said, EVs won’t take over until the range is better, charging takes the same time as filling a fuel tank, and the cost of ownership is reduced. And autonomy? That was just a cameo. Toyota’s Executive VP Didier Leroy, the most senior non-Japanese in Toyota Motor Corporation, said autonomous vehicles will become a norm only when an accident-free society has been achieved.

But above all these came the overriding matter of brand. Why? As everyone agreed, the carmakers are under threat. They don’t want to become merely the hardware supplier in a society where the experience and the service are what consumers engage with and what creates affinity and loyalty. If they do, cars will be reduced to mere commodities.

So brands are more important than ever. Luca de Meo said as much in his event-closing presentation, declaring, “Brands have not disappeared – they are levers to respond to different customer demands and needs.”

This was fitting – he made a powerful and effective figurehead for the SEAT brand. He’s an appealing character, with a relaxed, modern delivery and a smartly pragmatic approach. He recognises SEAT’s weaknesses and limitations, acknowledging that if it were not for VW Group parentage the Spanish company wouldn’t have a future. Even with that ownership SEAT is anchored insecurely, positioned somewhere adrift Skoda and acting as a feeder for the other group brands.

AR-170629842

So, to give SEAT relevance, as well as pushing the inevitable SUVs he’s investing in the brand by understanding where its roots are and strengthening them. And not just its national roots. Where others are developing homogenised brands – Skoda isn’t Czech any more, and LYNK & CO emanates not from China or Sweden so much as cyberspace – de Meo is going in the other direction, reconnecting SEAT to its home city of Barcelona.

This is smart thinking, and not just because Barcelona is emerging as one of the world’s leading smart cities. A strong brand has to reflect a company’s culture, and Barcelona – a city renowned for independent thinking, creativity and a life-affirming sense of well-being – lends an authenticity the company has lacked in recent years, when it’s aspired to being a “fun” brand, an antidote to the rest of the VW Group, without substance.

Didier Leroy shared top billing with de Meo at the Congress. He was the only other speaker given slots on both days, and although he’s from a very different background and operates within a polar opposite culture he was a deeply impressive conduit for the Toyota brand. He gave persuasively different perspectives on Toyota’s perceived weaknesses – a corporate reticence, a go-it-alone mentality, a stubborn adherence to hybrid technology – and did it with humility, humour and effortless authority.

2013_Toyota_FCV_CONCEPT_01

Leroy didn’t understate the challenges facing the industry: he compared the extent to which Toyota is having to reinvent itself to what it faced when it went from making looms to producing cars in the 1930s. But he left the listener feeling that the business is as focused on the challenges, the real issues and the real way forward as any can be. He’s the public face the brand has never had.

In spite of the way Hyundai and Kia have been transformed by a car designer, Peter Schreyer, the appointment of Volvo designer Thomas Ingenlath as CEO of its newly reoriented Polestar EV offshoot and the ongoing use of Land Rover/Range Rover design boss Gerry McGovern as its brand face (“I am the custodian of the brand”, he said in his Congress presentation), this may be a moment when the executive-as-articulator-of-the-brand role swings back from car designer to boardroom leader.

Leroy made an interesting point that, contrary to the assertion that OEMs must not become just the hardware providers, in reality some may well have to. It’s just that Toyota won’t be one of them. So what are the non-carmaker business models he and his OEM counterparts are studying as they look out to the nearing horizon? Uber? Google? No – it’s Amazon.

amazon-logo2-1920

For OEMs that ecosystem has to have the provision of services at its heart, which requires a brand extension job. When consumers rent a car they choose a category and, possibly, a rental company. So if the OEMs want customers to choose their products in an emerging landscape where short-term use and sharing are the norm they will have to build and offer the service direct as well as through partners.

And that means investing in technical services and connectivity, which is why the latter is currently a bigger issue than electrification and automation. Customer engagement and ultimately profitability could well be defined by it, and strong brands will be the foundation of it.

Advertisements

Automotive News Europe Congress – how are the industry’s leaders facing up to unprecedented change?

2017-ANEC-Logo-Date-SPAIN

Four weeks today I’ll be at the Automotive News Europe Congress in Barcelona. It always attracts senior executives from across an ever-broadening industry, and now is a better time than ever to be part of it – the industry is on the cusp of dramatic structural and cultural upheaval.

POSCO_main_1300x550_170407The 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.

This is what I want to hear from them.

Luca de Meo – President, SEAT:

How is he intending to give Spain’s national brand sustainable relevance? They tried to become an Alfa-Romeo-esque sport-driven brand, and now they’re committing heavily to SUVs, but so has most of the competition already. Aren’t SEAT’s differentiators of small/compact cars and a weighting towards southern Europe also its weaknesses? How will SEAT integrate the VW brand’s surging EV technology into its own offering? And what’s the dynamic within the bulging VW group brand portfolio, especially the no-longer budget Skoda brand? As keynote speaker, de Meo’s positive claims for SEAT will be under close scrutiny.

seat_01

Brigitte Courtehoux – Head of Mobility Services, PSA:

More than one OEM has now publicly stated that they’re transitioning from manufacturer and retailer to mobility provider, but what’s the substance behind this? Nissan and Volvo have extensive ongoing consumer trials of autonomous vehicles; what is PSA doing? How is it approaching the potentially seismic consumer shift from purchase and conventional leasing to flexible and ultra short-term leasing, on-demand usage, and personal mobility platforms encompassing public transport, Uber and growing non-driver urban populations? And where does the Opel brand fit into this scenario?

Jim Farley – Executive Vice President, Global Markets, Ford:

With Mark Fields having vacated the top seat at Ford Motor Co this is interesting timing. Ford has lacked focus globally since Alan Mulally departed in 2014. In Europe the company has made money when others haven’t, and GM Europe has thrown in the towel. But Ford is still part of that squeezed middle – mainstream brands which cannot become premium but are not value brands or challengers. What is the global vision? The company could – should – be leading the world in mobility, just as it did with the Model T a century ago. And what is its future in a fracturing Europe? With profits in the region down could it even follow GM to the exit door? Farley, newly promoted to a global role but with European oversight, is touted as a future global Ford chief so his view will be fascinating.

Didier Leroy – Executive VP, Chief Competitive Officer & President, Business Planning & Operation, Toyota Motor:

Toyota’s first foreign executive VP, Leroy provides a uniquely European focus for the Japanese giant. From a European point of view Toyota is nowhere near its global standing – 10th in volume terms, behind Skoda – and Lexus has simply never taken off. Globally it has never owned the EV and hybrid territory the way it should have done as the pioneer, which has clouded its brand purpose and allowed the likes of Skoda, Hyundai and Kia to steal hard-earned European market share, and the current uncertain next-generation technology strategy isn’t helping. Now there’s a global profits crisis, so how will this affect Europe operations? The man with the longest job title in the industry in uniquely placed to make the company’s case.

Hakan Samuelsson – President & CEO, Volvo Car:

As a challenger brand Volvo has the agility to reinvent itself and shift to meet changing market needs. And, sure enough, it has just announced that it will stop making diesels altogether, admitting that meeting emissions targets is too expensive. Other than VW’s virtue-out-of-necessity move to EVs, the bigger players have too much invested in existing technologies to be as bold, but Volvo’s move to EV and hybrid power brings the tipping point into view. The company is also at the forefront of automation, with its brand imperative of safety meaning that Volvo automation systems will effectively become the industry benchmark. Can this small OEM be the catalyst to both the demise of the internal combustion engine and the mass adoption of automated cars?

Alain Visser – Senior VP, LYNK & CO:

As the face of LYNK & CO, Alain Visser is fronting a company embodying many of the challengers facing existing OEMs. It’s not only offering cars designed for electric powertrains and connectivity, it’s challenging the whole existing business model by designing one around emerging market expectations. Direct, online sales, fixed pricing, home delivery and a subscription model for the app generation. “The word doesn’t need another car brand,”, Visser said. No existing OEM would establish itself now using the archaic distribution models they’re tied to, but LYNK & CO is part of Geely and was dreamed up at Volvo labs, so can the company make it work and head off the Teslas, Ubers and as-yet-unknown disruptors who come in totally fresh, with no automotive background?

lynk-co-6190b1c5917297178130459508b41e3ba

Hildegard Wortmann – Senior VP, Brand, BMW:

For me BMW is in some ways the most interesting OEM represented in the speaker line-up. Recently replaced by a resurgent Mercedes as the number one premium brand globally, it has lost its way a little: a commoditised 3-Series, bland and questionable styling, not enough true SUVs, an i-Series low-emissions sub-brand which has stagnated with just two, polarised products book-ending a product void. And now it faces a fundamental challenge to its very purpose – the Ultimate Driving Machine – in the shape of automated mobility. What will BMW’s place be in the future automotive landscape, and how will it get there? As the brand chief, Wortmann should provide a clear insight.

Barcelona-Cathedral-

I’m a little biased as I worked with ANE for several years in the 2000s, partly on this event, but for me the Congress is the best automotive trade event in Europe. Readers wanting to register can get a €100 discount by visiting the link below and quoting the code LONGSHORE. It can be used for either the Congress/Rising Stars combo or the Congress only.

Hope to see you there.

https://www.regonline.com/registration/Checkin.aspx?EventID=1934274 

Viva Geneva: Karl kicks out the concierge

If the underlying importance of the high-performance cars at the 2015 Geneva motor show was to point the way for electric powertrains, the fundamental theme of the show as a whole was even more real-world: how the mainstream brands are re-emerging.

Whereas a year ago the brands in the squeezed middle were focusing on countering the the premium brands with their own premium strategies, they’ve instead rightly addressed the fundamentals. In today’s market that means confident, well-designed, well-executed product in the right segments, giving them relevance in a market turned upside down by the explosion of the German premium brands over the past few years. Cars people want, not brand-stretching super-deluxe specifications, quilted leather and VIP concierge services.

Renault-Kadjar-Live-Geneva-2015-00Renault, which had a desperate few years, now looks one of the most convincing mainstream brands. Geneva saw the launch of its Kadjar crossover, effectively a version of the massively successful Nissan Qashqai cloaked in Renault’s latest and very agreeable design language. Alongside the smaller Captur crossover, Clio hatchback and Twingo mini car, it’s got the important mainstream market segments covered – and with attractive new product.

Renault’s alliance partner Nissan is also looking very healthy. It Geneva-2015-Nissan-Sway-Concept-03showed a mini concept, Sway, which is the basis of a replacement for the dowdy Micra and would complete a range differentiated by characterful design. Like the latest Qashqai, it’s a distinctive rather than disturbing like the Juke, but it still clearly says Nissan.

Nissan’s struggling upmarket brand Infiniti also looks rejuvenated, with two production-ready-looking concepts – the Q60 coupe and the more important Q30 compact crossover. That’s a model for a segment every volume carmaker needs to be in, and could be the car to finally give the company some meaning and a foothold in Europe.

maxresdefault-3SEAT has had a tough time since 2008, with an over-reliance on a bankrupt domestic Spanish market and a newly inherited position as VW Group’s bottom-rung brand thanks to the gains made by Skoda. But it’s got decent product again, and the sharply styled 20V20 SUV concept signals a wave of new SUVs which will add vital volumes. Like the Sway, it takes its brand’s existing design language and moves it on to give a clear and confident brand statement. That’s good design. Skoda’s new Superb, also revealed in Geneva, does exactly the same.

This is about having confidence in the brand: understand what you are, understand your strengths, and set about developing products which reflect that and a design language to articulate it.

Geneva2-Viva-1_3217646cThe star of the show? In this context, no contest: Opel’s new mini, Karl (Vauxhall Viva in in the UK). Opel has got a bigger job than most in re-setting itself and defining its mission. It can’t be premium but it mustn’t become merely a producer of commodities. The Karl/Viva is punchy looking, has an excellent interior, the equipment list of a £20,000 Audi, high-tech low-emissions engines, good quality and an impossible-to-ignore base price of about €9500.

But it’s not a cheap car. It’s a statement of the new Opel brand: excellent engineering, emotional design and high technology for everybody.

A car for the real world. A car with confidence.

Volkswagen group not profiting from its brands’ equity

_origin_Fakti-kas-tevi-parsteigs-9Martin Winterkorn, boss of Volkswagen Group, admitted this month that the business “urgently” needs better profits, and today’s half-year results announcement confirmed falls in both profits and sales. This is the company, remember, which has targeted global number one status by 2018, and since Winterkorn became CEO in 2007 CEO has increased production by 4m units and doubled its revenues.

One of the reasons for VW’s poor profitability is that it isn’t global in terms of geographical spread. It’s in the key growth market, China, but is actually over-dependent on it, whereas it has little traction in south and south-east Asia. And market share is relatively low in the USA, with the VW brand on the slide. Another factor is that VW is light on compact SUVs, the biggest growth segment globally. A further reason and perhaps the most significant is its sheer size – a company this big simply can’t avoid inefficiencies.

But here’s the elephant in the boardroom: VW’s problem is also down to brands. VW group isn’t merely huge; it has a huge brand portfolio, with 12 brands in total – stretching to trucks and motorbikes – and over 310 models. Paradoxically, rather than providing economies of scale, in the accumulation of brands the collective mass has outweighed the ability to exploit the efficiencies.

By 2007 it already had the considerable challenge of consolidating and managing a passenger car portfolio of SEAT, Skoda, VW, Audi, Lamborghini, Bentley and Bugatti. Each was struggling for both individual relevance and group synergy. Skoda had already begun to produce cars in the VW brand’s space. VW in turn was encroaching on Audi, which was moving onto mainstream segments previously the preserve of these brands while simultaneously launching de-facto Lamborghinis. Bentley was doing a fine job. Bugatti was, well, Bugatti, and SEAT was struggling not to be a Spain-only brand and was being jumped by Skoda. The group was competing with itself, and the mainstream brands were sharing the same market space but without sharing the economic benefits. And meanwhile the world was plunging into an economic downturn.

So what did VW do? Since Martin Winterkorn’s 2007 accession it’s added four more brands: Porsche, Ducati, MAN and Scania. It has also become the largest stakeholder in Suzuki and even consumed the design house Italdesign Giugiaro. And Skoda has stated that it wants to sell on quality and style, while Lamborghini and Bentley have announced SUVs.

VW’s strategy goes directly against the new automotive industry paradigm. Toyota has continued to excel in financial performance. It has not acquired other makes but concentrated on its core brand, which has maintains clear values, and its own premium-luxury brand, Lexus. Hyundai, which led even Toyota on profitability in 2013, was forced into a merger of unequals with Kia when the South Korean business bubble burst in the late 1990s. They produce cars for the same market segments, yet with only two brands they’ve not only managed the situation by differentiating the brands but have grown stratospherically since 2007. Meanwhile Ford has divested itself of Aston Martin, Volvo, Jaguar and Land Rover, and is emerging strongly under the ‘One Ford’ mantra. GM is now doing the same in Europe, discarding Chevrolet to concentrate on Opel/Vauxhall. And VW’s German rival BMW has limited its acquisition trail to the very distinct Rolls-Royce and Mini brands and retained the BMW group values across its portfolio.

They’ve all benefitted from a focus on a single brand or a primary and secondary brands. It’s very hard for Volkswagen group to do the same. The VW range’s own brand is still strong in spite of becoming part of the uncomfortable brand portfolio dynamic. But the group’s brand is infinitely less than the sum of its parts. It’s impossible to say what it stands for in the way that you can about its volume peers Toyota and Ford.

That VW’s profits are suffering is not surprising. 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.

Geneva brand digest #3: Volvo talks the talk but the party’s over at SEAT

Despite the fact that motor shows are a paradox – where technically cutting-edge and brilliantly designed machines which move us physically and emotionally are parked up in large, soulless indoor exhibition spaces – you can often tell as much about a car brand from its stand design and execution as you can from the models on display.

imagesAt the Geneva show Volvo demonstrated its brand transformation not so much in the Concept Estate car (despite the fact that it elicited more “I want one” comments than any other car at the event – yes, for a Volvo estate) as in the design and atmosphere of its stand.

After years of being sub-premium, a sort of no-man’s brand, the XC90 SUV gave it relevance once more, and the confidence to become not so much premium as Scadinavian. The brand now sits in its own space, transcending the stiff aspirational appeal of the big boys, and genuine practicality and cool Scandinavian design principles combine with a sense of enlightened independence to define the new Volvo.

This is now built into its crisply designed show stands not only through clean lines, neutral tones and contemporary materials, but by creating a guest area drawing its influences from a stylish Scandinavian home, with an informal mix of modern decor and design classics. items. The range of reference implies that the brand values are embedded in the culture of the business. So few brands do it.

4833836_930d7939c8e6ce19afb64b9cca352915_wmBut the stand-out feature was that Volvo used Swedes to serve the coffees – not people hired in locally, not traditional motor show smile-and-move-on hospitality people; these were young, relaxed, confident men and women who didn’t talk to you about the company or its products, but talked to you as they would in a Stockholm bar or Apple outlet. It’s hardly radical – after all, a business’s culture should always start with the staff. But it’s human, and it’s real – exactly where Volvo should be. And it works.

It’s ironic that as Volvo has passed into Chinese ownership it’s rediscovered its inner Scandi. If Geneva was anything to go by, VW’s Spanish value brand SEAT is going the opposite way. Some desperate recent years saw SEAT slip from aspiring to be a Spanish Alfa Romeo to the bottom of the VW pile, way behind the ex-communist Skoda. It’s made losses of Euros 1.5 bn since 2005. But it maxresdefaultpersevered with its Spanish party-time image, and late on motor show press days would always bring out the tapas and Rioja and turn the music up. Club music, one time with Ibiza DJ and Cafe del Mar creator Jose Padilla on the decks, another time young F1 driver Jaime Algersuari. The rest of the VW brands could only look on jealously from their corporate car parks.

The stand party didn’t happen at Geneva 2014. The last 12 months has seen SEAT rebuild its sales, and its new Leon lower-medium car is being praised as a genuine alternative to the market leaders. European sales were up over 10% in 2013, including 22% growth in Germany. There’s a new boss, and he’s German. Things are looking good. But they’re also looking less Spanish, less distinctive, and every other brand out there has good products.

You hope that this is more down to VW’s group cost-cutting than a brand repositioning. Because buying habits are changing, and there won’t be enough room in the VW portfolio for four serious but identikit mainstream car brands indefinitely.