Wednesday, October 3, 2012

@Interbrand Racing Towards Growth By Michel Gabriel #Automotive #Branding

Over the past decade, the automobile industry has experienced considerable growth. Luxury car sales in China have grown by a whopping 1,550% from 45,000 units in 2001 to 736,000 units in 2011, and a re-energized North American market has been steadily posting impressive numbers. But even in 2012, the global market for passenger cars is far from saturation.

In addition to China, BRIC (Brazil, Russia, India, and China) and other key emerging markets such as Mexico, Turkey, Indonesia, Thailand, South Africa, Colombia, and Bangladesh are expected to dominate the second growth wave in the automobile industry. As a result, most automobile brands are adjusting their respective brand positionings and the manner in which they engage with these audiences. For these markets, constant, rapid change is the greatest challenge they face. Many consumers in these new markets will be purchasing a car for the very fi rst time, and will require a fair amount of education in how to benefit from and maintain their vehicles. This is a rare opportunity for automakers to create a closer, lifelong relationship.

Whether considering emerging or more established markets, automotive brands are increasingly focused on the emotional aspect of the relationship between cars and consumers. Everywhere in the world, owning a car means more than just getting around. For some, a new automobile represents independence, freedom, and pride of ownership. For others, it’s about confidence, sporting the latest technology, or publicly showing one’s sense of responsibility to the environment. Automotive brands are becoming more attuned to this emotional connection, which has led many automakers to pioneer more effective, technologically savvy ways to reach target markets and help prospective buyers better identify with or relate to their brands.

Highlights 2012

From an acquisition perspective, Volkswagen stands out in 2011 and 2012. The German multinational took over MAN Trucks, Porsche, and Ducati to complete its range throughout all segments. BMW became one of the most profitable car brands worldwide in 2011, and many of the traditional competitors from Japan, US and Korea capitalized on pent up demand. These sales trends should continue as automakers are in the midst of a protracted launch cycle that started late last year.

In Europe, Mercedes-Benz has revamped their car designs to achieve a more dynamic look, which represents a genuine advance from a brand perspective. Additionally, Hyundai took a tremendous step forward in the quality vector. Thanks to YouTube, the whole world now knows that Volkswagen’s CEO, Martin Winterkorn became aware of Hyundai's quality surge at IAA 2011 (i.e., “Nothing rattles here”), and the impression reflects reality: in representative surveys, Hyundai has been getting top scores for quality and dependability during the past two years. Perhaps, then, it’s no surprise that Hyundai is one of the fastest growing automotive brands in the world.

The largest automakers are beginning to inject a global perspective rather than just a regional, product-driven approach. To help drive consistency, the likes of Audi, BMW, and Hyundai are investing in global brand campaigns while launch and branded events are becoming more and more digitally connected, and tailored to narrower target groups. The entire industry is taking a fresh look at these formats, and hoping to engage customers and prospects in a relevant and personalized manner throughout the entire purchase cycle.

Escalating pressures, from fuel prices to climate change, have pushed automakers to prioritize their sustainability eff orts. Like many auto manufacturers, Audi is integrating sustainability into everything they do, rather than treating it as a separate issue. With a dual emphasis on performance and efficiency, BMW continues to promote its “efficient dynamics” program to off er both efficient engines and dynamic driving, while Mercedes-Benz claims BlueTEC as the cleanest diesel technology. No longer a badge or a mantra, sustainability has become an integral part of an automaker’s brand identity and is now a key driver of technological progress.

But some have pushed innovation even further. Toyota carved a path for hybrid vehicles while other automakers such as Nissan continue to push the boundaries of EV technology. The Nissan LEAF continues to demonstrate that clean technology does not have to hold performance back while the Infiniti EV concept car, that will soon go into production, makes sure that luxury isn’t sacrificed either. Most notably, BMW is gearing up to introduce the i series, which promises to bring new excitement and attention to the EV market.

Despite the breakthroughs and innovations, adoption of new technologies will take time. Even with government subsidies, models are still relatively expensive and their range is acceptable only in a few regions that have the right infrastructure. Car-sharing in metropolitan areas with green car fleets has been gaining visibility and is a great example of a cost-effective alternative. However, while some cities are experimenting with promising pilot programs, clearly, leading car brands will have to worker harder to arouse the curiosity of consumers around green mobility and motivate them to invest in cleaner technology solutions.

Auto retailing and the brand experience

In saturated markets, digital media is changing the role of dealers, but they can still have a crucial role in retaining and acquiring new customers. As technology becomes increasingly complex, dealers can help educate new customers in how to maximize the features in their vehicles. Lexus, for example, has hired new technology associates that focus purely on using tools such as iPads to help new customers get acclimated with their vehicles. Audi is taking things even further with their Audi City concept, a new and exciting format that combines digital product presentations and personal contact with dealers. Audi City presents the brand’s complete model range digitally instead of physically and allows the brand to globally showcase itself in important metropolitan areas where space is often limited. Boosting proximity to the customer and transforming the role of the classic auto dealer, Audi City repositions the dealer as a customer relationship manager in an immersive environment that engages and fascinates.

Semi-stationary formats such as branded events, or mobile and virtual channels are also gaining more and more significance for sales. Younger customers, in particular, will no longer want to visit classic auto dealerships on the outskirts of cities. They do their research online and want to be addressed at their convenience. They also expect to be wowed by a product and demand that brands engage them in a dialog.

The growing significance of online and mobile distribution channels calls for a change in thinking among automakers and retailers toward a multi-channel distribution model. Traditional distribution formats in saturated markets must be reviewed and adjusted. In the future, they will merely be a part of the overall retailing concept and will no longer function as the sole hub of distribution activities. At the same time, multi-channel distribution models must be optimized and implemented for deployment in the urban centers of growth markets.

To effectively compete in the category, brands will need to stay relevant — which means rethinking design, adopting a global perspective, driving innovation, and prioritizing sustainability. They will also have to move beyond brochure-ware and catalogs, and engage more directly with their audiences — not only working to pique consumer interest, but also staying with prospective buyers until purchase is secured. For the near future, the automotive brands with the ability to link digital media to real-life brand experiences will have the greatest chance of success.

From Interbrand.Com