This week’s “Weekend Head Scratcher” is a little different. It’ll require quite a bit of thought, so pay attention! This week we’re going to play a little game I created. It’s called “Fantasy Car Maker”!
Here’s the scenario: You are the CEO of a car company. You have been picked by the United Nations as the recipient to unlimited amounts of non-refundable “infrastructure aid.” You have unlimited money that comes with on small string attached: You must invest it NOW. You have to choose car brands from around the world to form your car company. You need to report the brands you choose and the reasons why you chose them for the particular segment. Now here are the rules:
Your car company must consist of all of the following:
One “Value Brand”, one “Mainstream” Brand, one “Luxury” Brand, and one “Frivolous” Brand.
The Frivolous Brand segment can only be one of the following:
i) A Super Luxury Car Maker (i.e Bentley, Rolls-Royce, etc)
ii) A Super car maker (i.e Ferrari, Lamborghini, etc)
iii) A performance division (i.e BMW’s M-series, Mercedes-Benz’s AMG, etc)
Let me give you an example of how I expect the answer to be. I’ll give you my answers.
Value Brand: Skoda. They’re cheap, they’re reliable, Volkswagen are scared by them and they’ve shaken their “Eastern European” label off, so now you can drive one without people cracking jokes.
Mainstream Brand: Toyota: It’s global, they make reliable cars and they’ll appeal to most people.
Luxury Brand: Lexus. As far as I’m concerned the most “total” mainstream luxury marque out there. They’re incredibly reliable, there cars aren’t offensive and they’re relatively cheap to fix.
Frivolous Brand: For this segment, I’m going to choose Aston Martin. It’s recognisable, people want it and, above all, it’s achingly cool. However, a close second choice, was GM’s V-series tuning house. After all, who wouldn’t want a luxury car that’s as phenomenally reliable as a Lexus and goes like a Cadillac CTS-V…?
There’s no prize for this game (life’s tough, get over it) but you do get the chance for TTAC’s Best and Brightest to look at your choices and utterly maul them. Get thinking, people!
I need to think about this, but if you were building a global car company then your Luxury brand would not be Lexus, because they only command a 1.3% market share in Europe. Europe has pretty much rejected that brand and so you need something with more global appeal. Europeans actually really seem to hate this brand, I think it’s because most of their range has tepid performance versus their European rivals, there is no charm in their cars (like there is n something like a Jaguar) and the styling looks bland.
So I would probably go for Mercedes on the basis that not only do the sell luxury cars but they even manage to sell Luxury vans. They have a very large range and they are consistent. On the other hand I may go for BMW, but only if I can have MINI too….
Value Brand: Hyundai, It has Dramatic design, reliability and moving into 3rd place in the family car segment. Could be a mainstream brand now, with value pricing.
Mainstream Brand: Opel, the best Of GM design and for worldwide marketing (with rear wheel drive!), I want Holden attached to it to make the best American cars ever… (In Australia?). I will take Vauxhall also, just to keep the British happy!
Luxury Brand: Mercedes, the one that engineered its cars so that they were the best in the world. Remember that one?
Frivolous Brand: TVR, in full Peter Wheeler craziness, designing and building brutal, beautiful cars like no else dared.
>>> One “Value Brand”, one “Mainstream” Brand, one “Luxury” Brand, and one “Frivolous” Brand.
The problem is that I think these distinctions are going to change. I’m predicting that we’re going to see a feature/content war where any car regardless of brand will have pretty much any luxury feature available on the option list.
Case in point is the 2011 Optima offering former luxury features like heated/cooled front seats and heated rear seats or the new Elantra with auto-park feature. What excuse would you have to buy a luxury brand when there is nothing feature-wise to be gained? Luxury brands will be become essentially badge options purchased by poseurs. Eventually sales will decrease to the point that they go away. Better to use the extra overhead $$$ to improve products.
You also want to send a message that all of your vehicles are premium vehicles. Some may be priced better than others, but essentially everything you make is premium. No dollar store brands here. Everyone gets a premium dealer experience.
So, give me either Hyundai or KIA and I’ll run the table with everything from low price to supercar/frivolous with a single brand.
Mainstream Brand: Ford because they make vehicles in every segment and generally do a substantially above average job.
Luxury Brand: Mercedes-Benz because, well, I always liked them. They are a luxury car maker that has a solid base in the upscale downmarket segment. I mean, c’mon, MBs are used as taxis in much of the world while the S-class and SL-class are segment vehicles any rich person can seriously take to a high-end country club.
Frivolous Brand: Rolls Royce because they have always been THE highest-end car. And the grill . . . .
Value Brand: Skoda. I’ll admit I know almost nothing about Skoda. I just picked this because Robert Heinlein identified “Rolls Skoda” as a brand in I Will Fear No Evil. The sheer cognitive dissonance of “Rolls Skoda” is so delightful that I need no further excuse.
I also spread these around the world because I’m the CEO of a huge global enterprise and it’s politically and economically astute to spread things around.
Value: Hyundai (duh… Hey, if that guy used it as value, so will I)
Mainstream: Ford – neat products, but really I want it for Alan Mullaly
Luxury: Saab – Because the others are obnoxious
Frivolous: McLaren – Formula one, Ron Dennis, they make sports cars and not lead sled luxo-pretenders
Value brand – Suzuki. Probably the most underrated brand in the US right now. Suzuki’s own products (as opposed to Daewoo rebadges) are well thought out, reliable, and fairly attractive, plus, they have a great foothold in the Indian market, which will be very important once China inevitably becomes a smoldering nuclear wasteland.
Mainstream – Ford. Simply the best all around mainstream automaker right now with top notch products in every segment, solid sales in Europe, and a clear vision for the technology-laden car of the 21st century.
Luxury – BMW. Better looking inside and out than Mercs, and with luxury features flooding into mainstream brand models BMW’s performance focus will help set it apart.
Niche – Fisker. Luxury, performance, looks, green cred, and made in Delaware, what more could you want?
Value: KIA – just a little push is needed to put them over the top into true gangbusters success. A few more dealers, a little more production volume, and a tight lid on quality control.
Mainstream: Holden – I know I’m going to have to sell a hell of a lot of KIAs and V6 Statesman to make cafe with Holden but I’m willing to take a crack at it. I never really liked SUVs very much anyway. :) {BTW no leather interiors in my ‘mainstream’ vehicles, other than factory special editions. But my interior component suppliers are going to be so high quality that you’ll never miss it.}
Luxury: Well since I’m getting a big F-ing infrastructure investment I’m going to buy the rights to the Oldsmobile name from Gub-a-ment Motors and start over again from scratch. Modern interpretation of a Vista Cruiser anyone? Turbo AWD mid-size 442? 98 Oldsmobile that’s everything that Cadillac’s flagship SHOULD have been? Yes please. No cloth interiors or crank windows in my Oldsmobiles. Picture Audi fused with the presence and cachet of 1960s Cadillac’s. (And if GM won’t sell the name I’ll go buy the Packard name from those idiots who have it now.)
Frivolous/Niche: Lotus – no luxury Lotus’ under my watch. They’ll keep doing other peoples engineering work to stay solvent.
Value brand – Suzuki (for exactly the same reasons as listed by Nullo Modo), expecially for the Indian market.
Mainstream brand – Ford, with the caveats that Alan Mullaly would be retained, and that there would have to be large penetration into the Chinese market, either through Lincoln, or by buying into a JV.
Luxury brand(s)- I would reassemble the Ford PAG, using Volvo for midscale luxury cars, Jaguar for sport and upscale luxury cars and Range Rover for luxury SUVs
Frivolous brand – Aston Martin
Lincoln would be reinvented for the American market, using the 2002 concept Continental as the starting point, and for the rest of the world Volvo and Jaguar would fill the void (all three luxury marques would be based on shared RWD platforms). A careful positioning of the three luxury brands to avoid product overlap would be mandatory.
Suzuki would supply the value platforms, and more importantly, entry into the Indian market, where the existing network would also supply the launch pad for Ford’s presence.
I always felt the the Ford PAG was a very good idea that was very poorly executed. Bill Ford’s and Alan Mullay’s leadership seems to have imposed a seachange in the company, and I believe that the aquisition of the PAG would not be beset by so much folly as the first time around.
I would also ressurect some heritage vehicles (Mercury Marauder, Mercury Cougar, Ford Thunderbird, Lincoln Mark IX) built to the absolutely highest standards, and to be sold in limited numbers at “exclusive” price points. Let Suzuki and Ford carry the burden of volume sales, allowing the luxury makes to be sold in lower numbers at much higher prices. If an aspirational brand (or two or three) can be created and maintained, eventually the trickle down effect will pay big benefits for the value and mainstream brands (think of GM from the 30’s through to the mid 50’s).
The biggest piece to the puzzle though, is the entry into Brazil, India and China. There would have to be a laser-like focus to solving Ford’s lamentable presence in those markets or the entire exercise would be for naught.
Value Brand – Scion, but turning loose the people at my frivolous choice on it. Toyota tried to get the younger market without much success for a long time, but Scion seems to have done well. If I can’t get away with that, I’ll also go with Suzuki.
Mainstream – Honda. But I’d tell them to go back to about 2000 or so and stay with the fun / man-over-machine track. I’m tempted to go with Ford, but there’s still a lot of baggage there, and I’m not convinced they can stay as sharp without Volvo and Mazda helping develop cars. I think there’s still a lot of brilliance at Honda, even though they’ve become more like old Toyota. I also think it likely that Honda will play a major part in developing whatever the post-gasoline vehicle will be.
Luxury – That’s tough. Mercedes-Benz. Even though they spent a couple of decades lost in a weird laurel-resting, shoddy-reliability, plasticladen purgatory, they somehow managed to survive on the strength of the brand. If they can get back to making cars that really will last 30 years of hard driving, all while making people drool, then there’s not much reason to pick anyone else.
Frivolous – Ariel. Because they’re pure and awesome, and I say that without ever even seeing one in real life, much less driving it. Besides, what would the Ariel people do with a Scion, a resurrected Prelude or a 190E?
Just because I insist on making things tougher for myself, I decided my choices needed to include the following:
The major brands each had to be in a different market (Asia,Europe,Americas)
Each had to have a good focus on what kind of cars they make;
Each had to have a good portfolio of IP (Intellectual properties) to offer;
Each had to have a history of racing – and would race in one major area;
Each had to have strong, acknowledged leaders;
Clear delineation between the positioning (pricing) of each brand;
Brands recognized for their value by consumers and enthusiasts
So:
Type Area Brand Leader Racing type
Value Asia Suzuki Osamu Suzuki Motorcycle
Mainstream Americas Ford Allen Mulally Rallying / NASCAR
Luxury Europe BMW Norbert Reithofer Sports car / Touring car
Frivolous —- McLaren Ron Dennis F1 / Open Wheel
Why these picks? Suzuki is the #1 maker in India, and has a strong presence in eastern Europe as well. Their involvement in motorcycles gives them expertise in lightweight powertrains, which I suspect will be directly applicable to mini-cars as composites become more available. Suzuki remains primarily focused on motorcycle racing, which provides a path for talent to migrate from bikes to cars.
Ford is restoring it’s brand by focusing on what they stand for and eliminating what they don’t. Heavily reducing the numbers of models makes factories and equipment available to build other members of the group locally. As a bonus, Lincoln will be easy to ressurect once the Ford brand is fully reestablished.
BMW is the luxury brand that has best maintained their sense of self. The M-B quality issues of the last two decades and the recent brand dilution of Porsche erode their quality to consumers. Audi is too firmly enmeshed in VM. And the M group can provide a model for the creation of a more lightweight performace arm at Suzuki.
McLaren may be frivolous, but it brings tremendous depth of design, engineering, and engineering manangement expertise – McLaren gets the best. They can teach the rest.