Q&A: What's Ailing Auto Brands

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This is the month many of us hope for automotive magic. After all, there are self-driving cars at the Consumer Electronics Show, the Detroit Auto Show is right around the corner, and -- who knows? This year’s Super Bowl might give us another incredible VW commercial. 

But Andrew Pierce, president of Prophet, a brand and marketing strategy consultancy, isn’t holding his breath. “It’s a little embarrassing,” he says of the auto universe. “The digital age has transformed every other category. You can buy stocks and books and just about anything you want, at any time. Not with cars. The whole process is just really broken.” 

Pierce tells Marketing Daily why he isn’t expecting any miracles this year, and why automotive marketers keep shooting themselves in the tire.

Q: First, why do you think the industry is such a symbolic one?

A: It’s a category that is expensive, and so brands are a bigger reflection of who we are. It’s highly visible, and says something about us, in an important way. Other things -- washing machines, for example -- can also be expensive, but aren’t that important.

Q: America seems to love the automotive comeback story. Has that goodwill meant much?

A: Americans are always for the underdog. So when Chrysler came out with its “This is what we do” campaign, it was bold. (Of course, Chevy has claimed that Americana territory, too.) These efforts may win them advertising awards and build good will, but there is room for improvement in terms of understanding how great advertising can sell cars. You want to believe in Detroit. But when you look at market share over the decades, it’s been collapsing.

Q: This has been a rough stretch for cars. Millions of Toyota and Ford recalls. Hyundai and Kia misstating miles-per-gallon. Those drunk Chrysler workers. How does that affect brands?

A: Actually, I don’t think recalls hurt that much. In fact, it’s often seen as a negative, but it’s another step in creating transparency, and gives brands a chance to interact and communicate with consumers. The recall process has gotten much better, thanks to the Internet, and at least that part is more in tune with the way consumers shop.

Q: Why is the automotive industry so backward?

A: A lot of it has to do with archaic laws, and how powerful the dealers are. It’s totally backward. Consumers do not like the idea that they have to physically go to a dealer, and then go through this laborious process. It’s not the way people buy things anymore. There's a big opportunity for an auto brand that can change it. 

Q: What other consumer changes are having the most automotive impact?

A: In the auto space, consumers are applying the same discipline to buying behaviors that they are in other categories. They want increasing choice and flexibility, and they want something new and different. When Toyota came out with its sub brands -- way back with Lexus and Scion, geared toward different demographics -- it woke the industry up. Some, like BMW’s Mini division, have grown quite nicely. I don’t think that’s going away, and I suspect we’ll see more of these smaller brands. Car companies will have to get more accustomed to brands that sell 150,000 vehicles a year, not 500,000.

Q: How about the Super Bowl? Any hopes for greatness this year?

A: Sorry -- no. Mercedes will have its supermodel. For the most part, car advertising is a formula that’s been in place since the 1950s, right down to the sexy ladies. 

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2 comments on "Q&A: What's Ailing Auto Brands ".

1. Karl Greenberg from MediaPost
   

   commented on: January 9, 2013 at 11:33 p.m.
   It's a tad disingenuous to argue that one can't believe in Detroit because they no longer have the slice of pie they once had. The U.S. auto biz is saturated; there are now eight major mass-market auto brands in the US, and I'm not counting Buick, GMC, Lincoln, Mazda, Volvo, Subaru, and GM no longer owns seven of them. Success means streamlined operations, global platforms, a nice position China (and other places) a good design studio, awesome telematics, and strong, consistent, differentiated brand identity. You want to believe in Detroit but you have to be on laughing gas to think Motown or anyone else is going to have 30% share now. It's something of a miracle, actually, that the former Big Three, which actually were delusional a few years ago, were able to adjust their portfolios, get some sense going, and get it together (more or less). Chrysler is especially remarkable. I counted them down and out.
2. David Aaker from www.davidaaker.com
   

   commented on: January 10, 2013 at 1:12 p.m.
   With respect to dealer experience and control, keep an eye on Telser. I my view it is along with Zipcar the most important innovation in brand-customer interaction for decades.

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