Reinventing the Automobile

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Automakers are making great profits again.

Who would have thought that two to three years ago. Back then consumer spending was down, economic crisis a global headline and automakers were piling up cars they could not sell.
What happened in between? Well to cut it short, the economy found back on track, automakers learned from their mistakes and focused more on what customers really need instead of selling them illusions which could only be sold thanks to massive marketing efforts. The result: smaller, more green vehicles which more and more are built on interchangeable platforms and which share parts with a large number of cars.

Yet some fundamental problems remain.
Other than 30 years ago auto brands have moved closer together in terms of product quality. This is due to technologial advances but also to the consolidation among suppliers. Today you barely find a „bad“ car which has the reputation of spending more time in the shop than on the street (old Mini Cooper legend).

What counts today is price, efficiency, how green the car is and of course its design. And increasingly another virtue is developing: interaction.

It may not be critical yet, but in the future, autos will continue to become more similar. Already today you can buy almost identical cars which are offered by three different brands. How shall a consumer decide which of the three to buy? In such a case what it boils down to is brand. Or some small features which make one of the three unique, more customizable, more entertaining.

This points to an interesting phenomenon.
Basically cars have a transportation function, second they are fun to drive or provide roles or an image (such as a Porsche as a symbol of success, reward for hard work) you can transfer to yourself.
The brand facet „sporty“ today is closely connected to efficiency. This is something even Porsche has discovered and it proves to be good for the brand. Technological excellence no longer means to get the most power out of a certain engine size but rather to get more power out of the car while at the same time reducing emissions and gas consumption.

What consumers in the future will be calling for is more interaction with the car. More possibilities to customize the car (trend towards individualism). This may no longer mean body work such as in the 90s when tuning your car was the big thing. We are less extroverted today. What counts is the inner values. This can also be oberved with luxury goods. Excessive consumption is considered stupid and unsophisticated. Luxury today is more complicated and less superficial. Sense and context matter.
In terms of cars you can see this trend by the fact that we no longer care about RDS Radio but rather on the need for an AUX interface so we can connect our iPod with our very own, individual taste of music with the car. In the future customization will much more take place on the inside than on the outside of the car.

This tendency can also be oberved in other fields of technology. Mobile phones are not only bought because of the design (let’s not discuss the iPhone now, yes it does look okay) but because of what you can do with them. Today the number of available apps plays a major role in the purchase decision for a mobile phone. Or rather which OS to choose. Windows, Symbian or Android. Manufacturers who opted for Android are highly successful today. Altough 80% per cent of the apps may be crap, it does not matter. There is something for everyone. It is not about what you have but about what you do with it. Finding the best apps to reach your customer needs is a characteristic of cleverness.

I have mentioned this in a previous article, digital to some extent replaces the automobile today. In short, less and less people in Germany and the US have a driver’s license and the automobile is constantly losing its importance. What can be done? Well how about the auto becoming more digital? This may of course not collide with safety on the road and the basic transportation function. But if you today have two similar cars – say an Audi A4 and a 3-series BMW, two of the best cars out there, and one offers entertaining and helpful additional digital features – the tough decision of which one to buy all of a sudden become totally easy!

Automakers will have to find ways to make cars more interesting, more capable to provide answers to consumer problems we usually do not associate with the car. Cars have to become more entertaining, more customizable, loaded with additional features that provide additional sources of utility.
Another thought would be to enable the car to communicate. Here is one: More and more people today are single. Many would like to have an animal to reduce the feeling of loneliness but do not have the time for it. Wouldn’t it be nice to somehow communicate with your car? To constantly check how it is doing, to get notifications from the car directly to your phone? If the car would enable us to serve as an avatar, but not in the digital but the real world. If the car enabled us to get in touch with other drivers? Think back that a car offers an image or a role. Thus dricing the same car could imply that two people share the same value set, world view, political view, etc. What if the roads out there were a social network which enable you to stay in touch with friends, find people with similar interests. What if the car would provide you with information about the area that is specifically designed for you? What if the car becomes a means to transport electricity from A to B? What if you could already from the office or the couch configure which music to be played when you enter the car?
What if your car is always reborn with new software updates and thus new features you can explore? Thus you would have a car you are familiar with and that keeps surprising you with new features – it would never get boring. Sounds like a really good human friend, doesn‘ it?

There is so much the car of the future can do for us. And the better it understands our needs or problems the more we value the car and the more desirable it becomes. And the more loyal we become.

How do you make sure people stick to one software or operating system?
Updates, features, applications, relevance,.. It is so simple.

How do you change the game?
With a new operating system that simply rocks, grows fast, and allows your own developements (open source)…

Sounds familiar?

Autohäuser 2010: Service oft nicht gleich Service

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Heute beim Sonntagsfrühstück bin ich mal wieder über ein VW Prospekt eines regionalen Händlers gestolpert.
Man ist innovativ und preist Intervallservice Angebote und Jahresinspektionen an. Gleichzeitig der Hinweis „Warum wo anders mehr bezahlen“ und „bis zu 20%!“ sparen. Sogar auf Leistungssteigerung bei MTM gibt es im November „10% Nachlass“.

Und dann entdecke ich auf dem selben Prospekt, den Hinweis auf ein „Werkstattersatzfahrzeug ab 10 €/Tag“. Also wie jetzt? Hier 10% sparen und dort 10€ wieder drauf? Und das wahrscheinlich für einen nackten 70 PS Polo V…

Wieso sollte ich denn für ein Auto auch noch was zahlen, wenn es schon in die Werkstatt muss? Und wieso nutzen Hersteller den heutzutage seltenen Moment dass der Kunde tatsächlich mal wieder im Autohaus vorbeischaut nicht um ihm neue Produkte und AfterSales Angebote anzupreisen? Durch die verlängerten Wartungsintervalle distanzieren sich Autohaus und Kunde immer weiter voneinander. Gleichzeitig steigt die Bedeutung von CRM-Maßnahmen um den Kontakt zum Autohaus und letztlich der Marke nicht völligst abbrechen zu lassen. Deswegen sollte man dem Fahrer eines 5er BMW beim unfreiwilligen Werkstattbesuch nicht gegen Entgelt einen Mini (immer mindestens selbe Fahrzeugklasse) anbieten sondern ihm freiwillig das aktuelle Modell in seiner Wunschaustattung zur Verfügung stellen (soweit verfügbar). So kann der Kunde ohne aufwändigen Probefahrttermin am Wochende vereinbaren zu müssen (das Wochenende gehört der Familie) das neue Modell im Alltag testen (Wochenende ist nicht gleich Alltag). So entsteht bem Konsumenten nach kurzer Zeit das Begehren nach den Annehmlichkeiten des neuen Modells und er spürt die Wertschätzung als Kunde. Bei frisch auf den Markt gekommenen Produkten trägt das Werkstattersatzfahrzeug sogar dazu bei, dass das neue Modell sich im Stadtbild zügig etabliert. Ob eine Aufschrift des Autohauses nun eher vorteilhaft für das Autohaus oder negativ für den Fahrer (man sieht sofort, dass der Fahrer nicht Eigentümer des Autos ist sondern das Autohaus) ist, kann man sich streiten.

Natürlich muss man hierbei aber auch die Situation der Autohäuser sehen. Knappe Margen, hoher Kostendruck,.. lassen vielen Autohäusern nicht viel Spielraum für großartigen Service. Doch genau das spürt der Kunde, wenn bspw. keine Probefahrtfahrzeuge verfügbar sind, eine Probefahrt auf wenige Stunden begrenzt ist, oder eben ein Werkstattersatzfahrzeug auch noch was kosten soll. Will ich bei so einem Autohaus Kunde sein und Fahrer einer solchen Marke sein? Und ist das die Art und Weise, wie ich als Kunde behandelt werden möchte? Sicherlich nicht.

In Zeiten, in denen die Quailtät der etablierten Marken sich immer mehr annähert (Wissen sie in wie vielen Fahrzeugen ihr aktueller Motor verbaut ist?) und gleichzeitig andere Faktoren wie Design, Markenimage oder Preis eine immer wichtigere Rolle bei der Kaufentscheidung sprechen, steigt auch die Bedeutung der Loyalisierung. Deswegen sollte man seine bestehenden Kunden entsprechend betreuen und ihnen in jeder Kontaktsituation das Gefühl geben sie seien etwas Besonderes. Es gibt nicht umsonst einen Markenwechselbonus für die Verkäufer, denen es gelingt einen Fahrer einer Konkurrenzmarke für die eigene zu gewinnen. Dieser finanzielle Spielraum wird dann gerne auch mal ein Stück weit an den Kunden weitergegeben.

Dem Kunden das Gefühl zu geben, dass er wichtig ist, dass die Marke sich immer besser auf ihn einstellen möchte, sind zentrale Elemente von Social Media Strategien. Der (potentielle) Kunde wird ernst genommen, nach seiner Meinung gefragt, und eingeladen mit der Marke zu interagieren. Die Hersteller erhoffen sich hierdurch vieles. Eine stärkere Kundenbindung, wertvolle Consumer Insights und die Marke persönlich erlebbar zu machen – auf Arten die früher undenkbar waren.

Deutschland ist nicht umsonst der härteste Automobilmarkt auf der Welt. Wer hier dominieren will muss in allen Facetten gut aufgestellt sein. Das gilt nicht nur für die Produktqualität sondern auch für den Service.

Wenn mir heute jemand erzählt, er hatte seinen 3 Jahre alten Mittelklassewagen in der Werkstatt und musste für das Ersatzfahrzeug etwas zahlen, so würde ich klar sagen: „Wechsel die Werkstatt oder gleich auch die Marke!“ Und teile deine negative Erfahrung anderen mit.

The A-class equal to the 1-series or the A3? Never if you ask me

Mercedes Benz and its small-car dreams

Posted by: David Welch on November 13 on BusinessWeek The Auto Beat

The Mercedes A-class

The Mercedes A-class

American seems to be obsessed with small cars these days. Not American consumers, mind you, but policy makers and executives at the companies who must bend to their will. First, we had General Motors and Fiat-Chrysler rushing small cars to market as part of their argument for federal assistance earlier this year. Ford has a few of them coming in response both to high fuel prices and new fuel economy rules. Not to be outdone, Daimler AG CEO Dieter Zetsche says Mercedes may export some small cars to the U.S. Luxury buyers still want luxury, he told the Wall Street Journal, but some may want to make a less ostentatious, low-carbon dioxide statement.

This is wrong on so many levels. The article says that the Mercedes compacts will take on the Audi A3, BMW 1-series and BMW’s Mini Cooper brand. As for the A3 and 1-series, yes the Baby Benz will take them on, battling for all 12,000 cars worth of sales that the two models have sold this year. That’s right. Audi has sold about 2,900 copies of the A3, one-tenth the sales of its A4 sedan. The 1-series has done a bit better, selling almost 9,500 cars. That pales next to 3-series sales of 75,500 cars. Even if Mercedes gets a piece of that compact luxury biz, it will be small potatoes. As if Mercedes needs another model that sells fewer than 10,000 cars a year. The company has about half a dozen or so right now. By the way, Mercedes once shelved plans to bring its small B-class (pictured above) to the U.S. because of currency problems. Well, the dollar is still pretty weak. That will make the car either expensive to buy for consumers or profit-challenged.

And what about taking on Mini? The brand has sold almost 40,000 cars through October and just keeps growing. But it has everyone fooled. First of all, the brand has an incredibly unique image that blends modern technology of BMW’s vaunted engineering with the British styling and heritage of its past. And it is quirky. Mini stands alone unlike any brand in the car market as accessible exclusivity, though not traditional luxury. Will its buyers look at a Baby Benz? I doubt it. One BMW marketer once told me that in their research, they found that Mini owners view BMW owners the way most people view Ferrari owners. Loosely translated from the original profane description, Mini owners seem them as men with more money than confidence. I doubt Mini owners will see the Mercedes brand any differently.

I’ll give you one more practical reason why small cars won’t sell as fuel savers or as a green statement. Take a four-cylinder Chevrolet Malibu. It gets 26 miles per gallon combined and costs $1,526 a year to fuel up. A compact Chevy Cobalt gets 27 mpg and costs $1,482 a year at the pump. Who will sacrifice the passenger space of a Malibu to save $44 a year in gas? Answer: The buyer who can’t afford the Malibu.

Translate that to the luxury market where buyers are less concerned about gasoline prices, and there is even less incentive to go small. As for the low carbon statement, that won’t wash either. By the time Mercedes gets its compacts to the U.S., there will be Chevy Volts, plug-in Priuses, Fisker plug-in hybrids, Tesla electric sedans and plenty more expensive greenery for well-to-do do-gooders. Isn’t this idea just a wee bit silly?


SOM Marketingberatung:


in no way does the A or B-class Mercedes compare to any of the models mentioned. They all have what the Mercedes lacks: they represent young, dynamic drivers who can afford to buy a small premium car and are willing to pay a markup for a strong brand. The typical A and B-class drivers – in terms of perceived and actual age – are seniors. Of course there are also some younger drivers whose parents drive a bigger Mercedes model and who want „to stick with the brand.“ The same is true for the C-class. The average age of drivers still ranges somewhere around 50. That is in the home market of Germany. For long, there have been discussion whether to finally stop these two models: they are simply not profitable enough. And here’s another one: guess which vehicle is currently the most hated rental car in all of Germany: yes, the B-class.
So dear friends down in Stuttgart, you are in need of action now. Define your brand! Either find a new profitable positioning for these two models or combine them into one car. As of today, both are too expensive and do not offer what a Mercedes represents. And do not compare the current A class with a 1 series BMW or an Audi A3. Event rental companies rank these two higher than the A-class.

GM to retain Opel – what a foul play!

What long looked like a neverending story got an unexpected turn. GM tonight decided to keep Opel.
GM who first played the poor victim of economic downturn and a US auto market that got ever tougher and who addressed governments for financial aid in order to maintain thousands of jobs now showed its real face. Among the wide range of similar brands of inferior quality, Opel can truly be called the most promising of all GM brands. For months, the German government has been working hard to support Opel and to navigate the corporation towards what seemed to be the most promising of buyers: Magna together with Sberbank. This may not have been the ideal result but at least it saved Opel and thus German engineering from Chinese copy methods. Now what? Time will tell. By keeping Opel GM maintains access to European-standard automobile technology and the production lines for small vehicles which may become one of the fastest growing automobile segments in the U.S. – given that gas prices will not fall to levels before 2006.

How can GM all of a sudden afford to keep Opel? According to GM auto sales in October have risen by 4 per cent compared to the previous year which was mostly due to the core brands Chevrolet, Cadillac, GMC and Buick.

German politicians and managers alike are very displeased about the game GM has been playing for several months.

I seriously wonder if the brand Opel and the the German Chevrolet models will not be negatively affected by this strategy. There is a latent threat that the strong sympathy and support which Opel has been experiencing in the last months may turn by 180°. Opel could be perceived to be less German and more capitalistic and greedy, sokaing up German taxpayer money…

Curious about what is to come….

One day has gone since GM announced to keep Opel. As expected, German government representatives are „pissed“, European Opel employees scared about the future, and Magna angry about this sudden change of plan. Many wonder how GM plans to manage the restructuring of Opel, what will happen to the European factories and whether GM will make its statements true and lay off some 10,000 employees. Experts expect that GM will increase pressure on the current European factories and try to play them off against each other in the struggle for survival.

I am skeptical about whether GMs strategy has a long-term perspective. They are running risk of pissing off European consumers, auto unions and European governments. How then do you want to increase sales in Europe? And how will rival automakers react to this move? Ford is already ahead of competition in the U.S. and by introducing more and more European technology in the U.S. and by focusing on efficiency instead of pure power and size their head start may manifest.

Will the Alfa return to the U.S.?

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Fiat which took over Chrysler is considering the introduction of its premium brand Alfa-Romeo in the U.S.
As far as I can tell, Alfa-Romeo has a pretty good reputation in the States. People associate the vehicles with sportiness, passion, European technology and Italian passion. The fact that many sophisticated Americans are familiar with the brand is due to the fact that it was possible to purchase Alfa-Romeos until 1995 in the U.S.
Given the success of German premium brands such as the Mini, the small MiTo could definately meet some demand. However, Alfa-Romeo will definately remain a niche model as is the case in European markets such as Germany. A lot will thus depend on the cost aspect of selling this brand in the U.S.

Here is an article with further background information on the issue: