The gist of Sweet Pete DeLorenzo’s argument is that Chrysler has to do something to remind Americans that they still exist. Given the Chrysler’s inability thus far to articulate a vision for the Dodge brand post-Ram, this makes a certain amount of sense. With a new, well-respected ad agency, Dodge could use the Super Bowl’s giant stage to get back on the buying public’s radar. The problem with the plan lies in the one question that DeLorenzo fails to answer: why bring buyers into Dodge showrooms if there’s nothing there?
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It’s been a widely-shared opinion among TTAC’s writers for some time that GM should have used its bailout and bankruptcy to cuts its brand portfolio to Chevrolet and Cadillac. We’ve already sussed out the negative side effects of trying to hold onto the Buick-GMC dealer net, the biggest of which is that without Pontiac, Buick is being forced into volume-chasing. With the debut of the Granite “Urban Utility Concept,” we’re seeing the same brand-diluting volume-hunting taking place at the “Professional Grade” brand. GM’s attempt to bring more youth and volume to its GMC brand is starting with a Youtube-heavy, family-oriented marketing campaign, pointing the way for the brand to betray its “Professional Grade” raison d’etre. But GM’s marketing plan for the Gamma (Aveo)-based Granite will be the final nail in the brand’s coffin. Because to save the brand, GM must destroy the brand.
The prospect of US launches by Chinese and Indian auto brands like Tata and BYD have at least one of the established US-market players in a paranoid froth. Honda VP John Mendel revealed a few of the nightmare scenarios that keep him up at night to USA Today [UPDATE: more on Mendel’s fears at Automotive News [sub]]. One, inspired by BYD’s plans for a 2010 US launch without a distribution channel in place, is that newcomers could skip the dealer model altogether. Mendel worries that “warehouse stores or electronics stores” (sound familiar?) could be used to cut dealers out of the loop, “blowing up” business-as-usual for US distribution strategy.
Having divested much of its premium brand portfolio (Volvo, Jaguar, Land Rover, Aston Martin), Ford is missing out on luxury sales in growth markets like China. So it comes as no surprise that Automotive News [sub] would ask Ford President of the Americas Mark “MKF” Fields whether Ford’s Lincoln brand could go global. Fields’ reply?
Potentially, but we are focusing Lincoln here in North America for right now. We don’t have any plans at this point to take it global. That doesn’t mean in the future we wouldn’t look at that, but it’s very important for us to focus on North America.
Chrysler’s sales fell 36 percent last year, as bankruptcy and some of the weakest products on the market conspired to keep sales and market share trending downwards. CEO Sergio Marchionne figures Chrysler’s slide has hit bottom, and indeed his turnaround hinges on considerable improvement over last year’s dismal numbers. How much improvement? Marchionne tells the Freep that ChryCo needs to sell 1.1m vehicles in the US next year, an 18 percent improvement on 2009’s number, in order to reach his break-even projections. Worldwide, Chrysler needs to sell 1.65m vehicles, or 27 percent more than last year. Given the downward sales and market share momentum, the overall uncertainty of the US market, and the lack of new products until the end of this year, reaching those volume numbers won’t be easy. Especially because Marchionne refuses to cut any corners.
GM has a tough row to hoe in 2010, with the launches of key products like the Cruze and Volt going on sale, an IPO to worry about, and a sales slide (down 30 percent for 2009) to reverse. Still, according to GM’s new North American boss Mark Reuss, navigating the congressionally-mandated dealer arbitration is the top challenge of the coming year. At a speech last night, Reuss told reporters from Automotive News [sub] that:
I welcome this as an opportunity for GM and the dealership network to go through a change in our network with integrity,
As opposed to the arbitrary bankruptcy-era dealer cull?
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Apparently.
Once upon a time, luxury brands built unique cars and added special editions for extra profit. Now luxury brands tend to build more cars based on volume brand platforms, the special edition seems to be giving way to a new phenomenon: unique luxury trim levels. GM has been a proponent of this system for some time, adding Denali trim levels to its GMC upgrades of Chevrolet trucks. Now, The General’s Cadillac brand has announced it will be adding Platinum trim level options to every vehicle that isn’t available in “V” form. The impetus for this is clearly the dream of coaxing BMW “M” or Cadillac “V”-style markups from consumers who don’t care about dynamics or power, but it also fundamentally undercuts Cadillac’s status as a true luxury brand… as well as Buick’s raison d’etre as an entry-lux brand. Or does it?
We’d heard that Dodge (“The Full-of-Life Brand”) would be re-working its trim levels in order to “take ‘base model’ out of the Dodge vocabulary,” as a company press release puts it. So, they’ve changed the names of trim levels on some Dodge models. First off, note that only certain models get the trim level name change: Caravan will still be sold in SE and SXT trim, and Challenger will still come in the standard SE, R/T and SRT8 trims. Otherwise, each model has its own trim levels: Journey now comes in Express, Hero, Heat, Crew and Uptown trims, Nitro is available in Heat, Detonator and Shock, while Caliber comes in Express, Mainstreet, Heat, Uptown and Rush, while Avenger comes in Express and Heat trim. What the Foxtrot does it all mean? There’s no way we want to break it all down, so surf on over to Kicking Tires for the full breakdown. Needless to say, it’s yet a another marketing mess from the soon-to-be defunct bailout baby named Chrysler Group.
When someone pays tax, they generally like to think it’s going to towards something that will benefit society. Maybe it might be a repaired road? Or funding towards a crumbling school? I doubt they would want the money to go towards shifting a supposed CamCord killer or an alleged 3 series rival, but that’s what’s going to happen. BusinessWeek reports that executives at “New” General Motors are going to cut prices and rework adverts to boost flagging sales of the Chevrolet Malibu and the Cadillac CTS; two saloons considered critical to meeting Ed Whitacre’s target of a profitable 2010. That’s right, “New” GM are going to cut prices (A.K.A “Cash on hood”) to make more sales. Sound familiar?
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This graph of Hyundai’s market since 1993 is a refreshing antidote to yesterday’s depressing Detroit market share picture. And it doesn’t take a whiz kid to deduce the single most important factor in Hyundai’s success. Notice a bit of an uptick starting in 1998? That was the year Hyundai introduced its 10 year, 100,000 mile warranty. It’s been suggested before on these pages that GM should address its “perception gap” with meaningful improvements in warranty coverage rather than more talk. After all, if it could fix Hyundais weak 1990s-era rep, it couldn’t hurt The General’s. This seems to be conclusive proof that warranties matter as much as the products they cover. After all, what good are a few extra horsepower or more interior room to a consumer compared to insulation from risk?
Of all of Chrysler Group’s branding conundrums, the de-Ram-ified Dodge brand has got to be one of the toughest ones. Without the truck-based image or styling, Dodge is a brand without a purpose, and Dodge CEO Ralph Gilles brought little to his brand presentation at Chrysler Group’s five-year plan that would help explain what Dodge is or why consumers should choose it. Other than more refined youthfulness and less rugged wisdom. Or something. Anyway, if Dodge is really to be “all things to all hip people” as the Autoextremist succinctly puts it, they sure picked the right ad agency. Wieden + Kennedy does hip like few others, having started with Nike’s “Just Do It” and taken off from there. As the ad above, and several other Honda spots prove, the guys knows how to bring some youthful enthusiasm to the otherwise staid, desperate world of car advertising. And goodness knows recent Chrysler Group advertising needs the help.
First it was the Prius, now Audi has come out with an ad featuring failed suicide. In both cases, the intended message (our car doesn’t spew poison) gets a bit lost in shuffle due to the fact that consumers of these products are portrayed attempting suicide. So this is what Audi’s CMO meant when he said rational arguments don’t work in the marketplace. Unfortunately, as the California Air Resources Board helpfully points out, diesel fumes contain arsenic, benzene, formaldehyde, nickel, and polycyclic aromatic hydrocarbons. So, you know, professional driver on a closed course, and all that. Don’t try this at home, kids!
GM’s VP got a guest spot on Edmund’s Inside Line to promote his “to-do list for 2010.” The top two spots on the list are dedicated to Lutz’s resolution to “remain focused on the product above all else,” presumably because “stop repeating self” was cut by GM PR. But number three on Lutz’s list is of considerably more interest. Labeled “change minds,” Lutz uses the entry to defend the General’s “perception gap” hobbyhorse. You see, when GM accuses consumers of being too stupid to understand how great GM’s products are, they aren’t actually calling consumers stupid. In hopes of clearing up the confusion, Lutz does what any other savvy marketer would do: call the media stupid.
Let me digress for a moment and say that I’ve seen it written that GM’s marketing strategy is based on the fact that the consumer is too dumb to know what great vehicles it makes. I take huge issue with that. That’s an example of the media trying to ascribe some of the old GM arrogance where none exists.
Audi CMO Scott Keogh explains how diesel, racing and politics can be relevant to automotive marketing… as long as they’re approached in a different and unique way. Money quote at 3:10: “We clearly knew that a rational argument was not going to work in the marketplace.”
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