At every level, the automotive industry is under pressure: challenged by alternative business models, battered by scandals, wrestling with well-capitalised start-ups, the rise of electric and autonomous driving, and struggling with the migration from transport provider to experience creator.
From the car manufacturers to their sales partners, equipment providers to aftersales — each element of the automotive life cycle is being forced to change — and rapidly.
Increased urbanisation, reduced youth engagement, amplified environmental awareness and growing digitally activated experiences would each pose significant issues on their own. Compounded, they form the foundations of a crisis that will threaten the continued existence of brands within the automotive industry — Mitsubishi’s independence has already been claimed.
To survive and thrive in the face of these challenges, those brands need to work harder to be a consumer’s first choice. In automotive branding terms, those who redefine themselves first, best and most simply will win. There are four areas of focus automotive brands should consider:
1. A better journey
Performance is no longer the main territory on which car companies compete: these days nearly all cars drive, brake and handle so well that their owners will never come close to exploring their limits on ordinary roads. Safety and reliability are not differentiators either, as most cars have a fair claim to both. Owners may fall for the beautiful lines of their cars’ bodywork, but even the most infatuated petrolhead is not going to spend hours gazing at the object of his desire parked in the drive.
The real battleground is in automotive brand experience. As autonomous driving becomes a reality, in-car experiences will dominate consumer decision-making. Audi, Volvo and Mercedes have all realised this. SEAT is cleaning up in the mid-sector with its investment in excellent technology integration. Simple, intuitive experiences mirror and add to the ecosystem we already enjoy on our phones. It’s a rich, but also ultra-competitive territory.
2. A simpler relationship
Buying a car is still too painful. Digital customer experiences, dealership relationships and customer service infrastructure are entirely disconnected, backward or out-of-touch. Too many competing elements of the supply chain make the experience unhappy and confusing for consumers.
Now that Tesla and Volvo are changing their approaches to sales and challenging convention, the traditional champions of the sector will have to “up their game”. Seven year warranties and “just add fuel” deals are now table stakes.
The carmakers (and sellers) that win in the future will be the ones that focus on simpler, more intuitive sales experiences. Fewer, clearer finance options. Integrated and enjoyable buying experiences. Flexible purchase models. Highly trained experience consultants (rather than sales people) — “Consultative” will be the new watchword for the car industry.
3. A clearer brand purpose
Just as diesel and hybrid power plants are no longer cutting edge, electric propulsion cannot be a long-term differentiator. Most consumers will be unable to differentiate between cars with better range or quieter, more sustainably sourced motors.
Instead, automotive branding strategies should help brands define their essential purpose in this new world. Is it a forcible rejection of autonomous vehicles in favour of the thrill of driving? Is it the most comfortable, cosseting experience? Is it adding ease? Or could it be delivering unprecedented relaxation?
The traditional brand territories are muddied. Can the Ultimate Driving Machine be autonomous? Is Vorsprung Durch Technik a defendable position in a world of ubiquitous technology?
4. A more flexible experience
Are carmakers flexible enough to take active roles alongside governments and regions as they evolve at different rates? Regulation already means different sales models in different markets. How will they respond when some countries demand electric cars and autonomous driving while others take different approaches technologically or politically?
Is it a carmaker’s place to contribute to the conversation? Can they flex their business models to create hybrid rental and ownership models that give the consumer real control? Can they kill the rental car market? Will they combat the Uber challenge? The industry needs to answer these questions to thrive.
By 2022, the automotive industry landscape will be unrecognisable — 98% of cars will be connected to the Internet and goods will flow across nations in driverless trucks. Add-ons and skin-deep innovations won’t future-proof parts manufacturers or sales franchises as the industry gets less clear cut, more competitive and increasingly complex.
Reimagining their relevance to people, enterprise and governments will require brands to navigate the future with simple, rich ideas and experiences — creating a simpler, easier journey.
Geraint Jones is business development director at Siegel+Gale. Follow Geraint on Twitter: @gvlj