Chrysler cars are the industry's style leaders, at least according to Kelly Blue Book. In a press release dated yesterday, Chrysler proudly proclaims they won "Best Exterior Design – Non-Luxury Sedan/Coupe/Hatchback," one category of the 17 different KBB Brand Image Awards handed out at the New York Auto Show. The awards "recognize automakers' outstanding achievements in creating and maintaining brand attributes that capture the attention and enthusiasm of the new-vehicle buying public." The press release didn't say which specific model led to the award, but the Aspen and Town & Country are eliminated by the category. The PT Cruiser has been around since Bob Lutz was a Boy Scout and the 300's long over-due for a re-do. That leaves the Sebring as the style leader that "captured the attention and enthusiasm of the new-vehicle buying public." If the Sebring displays the essence of Chrysler's "brand attributes," that explains everything you need to know about why the company's on life support. Just sayin'.
Category: Marketing
In a desperate effort to sharpen the dulling edges of Scions "edgy, youth-oriented brand," Toyota is offering fans a website (scionspeak.com) where they can channel their youthful enthusiasm towards designing individual logos for their sweet rides. The New York Times reports that Scion owners can build a logo from hundreds of symbols designed by a professional graffiti artist, download them and have them made into window decals or airbrush templates. Whether the middle-aged-and-up folks who occupy most of the Scions I see on the street even know that there is such thing as a "professional graffiti artist" or will use this website remains very much to be seen. The real point of this exercise is to keep the myth of Scion-as-youth-brand alive… among those who already own one. The campaign is not aimed at actually reversing Scion's sagging sales, but "reducing Scion's investment on conquering new customers and increasing the passion for the brand among its core fan base," according to the company running the campaign. We bet they'd do better by offering a special ramp so your youthful Rascal Mobility Scooter can drive out of the back of your xB.
Saturn is planning on launching a new web-based purchasing scheme which will place even more of the buying process online. The plan is aimed at moving functions like checking dealer inventories, applying for credit and scheduling a test drive to a unified Saturn online platform. Down the road, the website could also be used to handle the evaluation of customers' trade-in vehicles and to negotiate price using online chat and e-mail. Although this last goal is particularly strange given Saturn's "No Haggle" pricing. Of course, this program is not being pitched as "the end of the Saturn dealership," although Edmunds AutoObserver notes that it came out of efforts aimed at "developing the Internet as a tool that might someday enable them to eliminate the middleman entirely." Since these efforts were thwarted by legal concerns, Saturn will just be centralizing a few online capabilities which most dealers already offer. At enormous expense.
A few years back it was safety. Before that it was reliability. At some distant point in the past it was (maybe) performance. These days, the ever-fickle and typically totally misinformed car buying public is obsessed with mpg– at least according to AAA. And why not? Gas is flirting with $4 a gallon. Milk, egg, your gas bill, beer, Viagra– everything is up, up, up! The MotorAuthority reports that consumers are fighting back by purchasing more fuel-efficient cars. In other words, they're being rational rather than emotional. But how do you define rational? This past weekend a friend asked my girlfriend what the latter thought of her 2001 Ford Focus, a vehicle held together by duct tape and bumper stickers. The friend asking had a 2000 Ford Escort which fell apart in less than 100k miles. She currently owns a 1998 Ford Explorer. She's thinking about getting a new Focus. She's from Michigan, so she can only buy Fords. Or a Prius. Go figure.
"Leading with innovation" (based on a Time Magazine article it read sometime in 2004), Chrysler is following GM in offering a new online "community" at Chryslerlistens.com. "Through our online Customer Advisory Board, we have a new platform to engage our customers in two-way dialogue," Chrysler VP and Chief Marketing Officer Deborah Myers explains. "So we can harness their insights and vehicle dreams as we move quickly to develop and refine technologies and products." Yes, this means you can cash in your buzzword bingo cards at Chryslerlistens.com. But there's more: Social Networking! Community Building! Collaboration Technologies! In short, the perfect opportunity to turn over your information to Chrysler direct-marketing and work your little Cerberus-loving tail off doing focus-group work for which people were once paid. Of course, Chrysler doesn't want to listen-dot-com to just anyone. The site is a "closed community." If you stick out the "three- to four-week period when Chrysler will introduce members to the process and the company," then you can have your "insights harnessed" (kinky!) and help Chrysler innovate and bloviate. Let us know how you get on (literally).
Back in August '06, GM announced "Value Pricing" policy. Yes, well, Edmunds.com reports that cash back and special financing offers are back, and they're big. "Incentives have been boosted to the levels we saw regularly before automakers instituted the 'value-pricing' strategy that aimed to reduce sticker prices and minimize the need for incentives." The Dallas Morning News has the list, and it ain't pretty for profits. While you'd expect the arthritic Mercury Marquis ($6500) and lame duck Dodge Ram ($5k) to offer incentives, the Explorer's $4k, Focus' $2k and 300C's $2k has got to hurt. Even the highly-touted Cadillac CTS (1.9 to 4.9 percent) and Malibu (5.9 to 7.9) are using financing to help move the metal. The transplants are playing the game as well; the struggling Nissan Titan comes with a $5k come-on and the new Toyota Tundra slaps up to $3.5k on the hood, or zero to 3.9 percent financing (which Box forgot to mention). Overall, the numbers tell a familiar tale. "In its most recent assessment, Edmunds.com found that the average incentive in February for the Detroit Three was $3,393 per vehicle, while European brands spent an average of $1,945 per vehicle sold, Japanese brands averaged $1,313 per vehicle sold and Korean brands spent $1,807." Not that the average American Lexus buyer could give a damn, but Toyota's luxury division has singularly failed to gain traction outside the U.S. market. Which is exactly the point: Americans are far less bothered by issues of provenance (i.e. or lack thereof) than any other developed automotive market. Business Week reports that the analysis applies to Lexus' home turf. "When Toyota (TM) introduced its Lexus brand in Japan three years ago, the company was hoping drivers like Masayoshi Haku would swoon over the luxury lineup. The 46-year-old doctor is a car lover with a $110,000 BMW 750 sedan and a $60,000 Porsche Boxster, so he should have been a prime customer for Lexus. But Haku hasn't taken the bait. Why? Lexus is too Japanese for his tastes… 'Foreign brands have more individuality.'" Sales reflect this non-import bias; Lexus sold just 34,800 cars in Japan last year. As Biz Week points out, Lexus did itself no favors with its initial lineup, featuring "the $52,000 GS sports sedan, the $68,000 SC convertible, and the entry-level IS sedan, starting at about $40,000. All three had previously been available in Japan under the Toyota nameplate— for about 20% less than the Lexus models." Oops. [thanks to stalightmica for the link]
The Financial Post reports that car prices in Canada have plummeted 6.8 percent last month, the biggest drop since 1956. The number comes from Statistics Canada's February inflation report, which reportedly shocked even the economists who collect the data. Vic Singh, chief economist at the Canadian Auto Dealers Association explains the phenomenon as an "accumulation of several months of falling prices, as the soaring Canadian dollar forces auto dealers to cut sticker prices in an effort to keep consumers from heading south of the border to get a better deal." A strong Canadian dollar, aggressive manufacturer incentives and increased demand for compact cars are also cited as reasons for the sharp downturn in prices. Of course, good old Econ 101 analysis indicates that this is what the textbooks call market self-correction, as Canucks have been paying high premiums on their vehicles for years compared to their American neighbors despite the strong loonie. Check out a slideshow comparing prices in Canada vs. US in November, 2007 here to see what we're talking about.
As we reported earlier, the X-Prize (of "paying people to shoot themselves into space in home-built rockets" fame) is bringing its "Revolution Through Competition" approach to the lofty goal of the 100mpg car. Well, they finally got the money together, thanks to title sponsor Progressive Insurance. And they even have a Senate resolution praising them for their bold, visionary whatever. So let the games begin! Oh, but first your garage-built go-kart must pass safety, cost, features and business plan inspections to ensure that only production-capable, consumer-friendly cars compete. Yup, they said business plans. Sorry Tesla!
TTAC commentator (and now unintentional blogger) Lichtronamo dropped us an interesting email, which we reprint for your dining and dancing pleasure: "I was reading a Saturn brand Special Advertising Section in the April 2008 Automobile magazine (starting on page 40 and ending at page 53). On the last page, I caught this little nugget of info re: the Saturn brand: "Saturn was named for the rocket, not the planet". This raises at least two questions: 1. Wasn't Oldsmobile the "rocket" brand when Saturn was first launched (both the real rocket and the car brand, I guess)? 2. If Saturn was named after the rocket and not the planet– as suggested by the ad– then why is the Saturn logo a stylized image of the planet? Rethink that! [Note: if you come across a TTAC worthy item– in the media or real life– email robert.farago@thetruthaboutcars.com, including your user name.]
General Motors may be singularly unwilling to tell its shareholders and stakeholders when the company will return to profitability (or exactly how they're going to get there), but they're happy to announce a three-year plan for their annual ad spend. And the winner is.. online media. GM says it will allocate fully $1.5b of its $3b annual advertising budget to the Internet. The revelation keeps the death knell pealing for newspapers. According to followthemedia, GM's 2007 online display ad spend clocked-in at somewhere between $193m to $208m. At the same time, America's most profligate auto advertiser trimmed newspaper advertising by 32 percent, to $149.3m. The new Internet-heavy target will also eat into TV advertising. And where GM leads– in ad spending anyway– other automakers follow. "You know it’s getting dangerous for traditional media," scribe Steven Stone wars. "When the likes of Joel Ewanick, Marketing VP for Hyundai Motor America, says, 'Online is getting to the point where it may be more important than the 30-second spot.'" So look for GM advertising on TTAC soon. In other news, Hell is getting chilly.
Speaking at the Morgan Stanley Global Automotive Conference in New York, Ford CEO Alan Mulally confident predicted that Ford's global rationalization (i.e. same vehicles, different wrappers) will allow the embattled automaker to make money on its small cars in the American market (providing they sell enough of them). The AP [via The Houston Chronicle] reports that Big Al told the assembled throngs he'd been surprised (surprised I tell you) by the complexity of Ford's assembly process. "For instance, the Lincoln Navigator large sport utility vehicle had 128 possible console combinations," roughly one per customer [kidding, I think]. Since taking the reins, Ford has reduced complexity by "up to 80 percent" on "some" models. "You can imagine what that means to the cost structure worldwide," he told the analysts, who tend to prefer hard numbers to vague assurances. Still, Mulally confidently predicted– well "hopes"– his employer will equip 500k vehicles per year with EcoBoost engines by 2013. "It's absolutely going to be a competitive advantage," Mulally asserted. Meanwhile, FoMoCo's CEO conceded that "Ford's market share in trucks and sport utility vehicles has slipped recently, which he attributed to competition." So now you tell us.
The Mazda2 (Demio) has won the 2008 World Car Of The Year prize. How was the diminutive Demio chosen for this honor? According to the WCOTY press release "Rather than being just a popularity contest, the objective was to ensure that the World Car of the Year would be the product of a fair and thorough assessment process that considered the needs and wants of consumers the world over. The process began with individual jurors evaluating and rating the candidates using a variety of standardized parameters – everything from styling and quality, to performance and safety." Hmm, somehow we have a hard time believing that "standardized parameters" can objectively measure things like "styling," but whatever. The Mazda, which beat out the Ford Mondeo and Mercedes C Class for the award, had previously won national Car Of The Year awards in Austria, Belgium, Denmark, Greece, New Zealand, and Japan. You should be able to buy one in this country sometime in 2009 as the Ford Fiesta, but as Frank Williams pointed out, nobody should buys cars just because they win ridiculous awards.
It turns out we got it semi-wrong when we reported that FoMoCo's new tagline is "Ford. Drive One" (pearl two). Wandering around their auto show stand, it's clear The Blue Oval Boyz' marketing mavens are hedging their bets. They're rotating their taglines a la Nissan (Shift BLANK), Pontiac (is BLANK) and Mercedes (BLANK like no other). Three separate LCD's proclaim three separate reasons to drive a Ford product: "Drive Smart," "Drive Green," Drive Safe." (It hardly seems likely that Ford will stop at three taglines, so feel free to suggest further variations on the theme below.) The lack of a single sales message does not bode well for branding, but it certainly should satisfy the divisional mandarins within Ford's Byzantine bureaucracy (our turn!). Meanwhile, a word of warning to prospective Flex buyers: if you want to put adults in the way back, opt for the convex non-sunroof sunroof option. Otherwise, neck compression is a given.
"We are undoing the mess we had in the 1980s when every brand had everything, they all looked the same and they were all priced the same." So says GM's Product Jeffe Bob Lutz, quoted in The Wall Street Journal. The winner of TTAC's first annual Bob Lutz award went on to say their brands are emerging with their own identity, with "Buick standing for American luxury, Cadillac for total luxury and Pontiac getting back to its quality built roots." So let's run down the GM lineup and see where they stand: Pontiac is selling Cobalts and Holdens. Saturn is selling Opels. Saab is selling TrailBlazers (with the ignition key between the seats). Buick, Saturn, GMC and Chevrolet are all selling the same CUV with overlapping prices. Saturn, Chevy and Pontiac are all selling the same mid-sized car at about the same price. Cadillac is selling squared-off Corvettes and blinged-out Avalanches and Tahoes. Everything GMC sells is duplicated in the Chevy lineup. They're talking about introducing a Chevy-priced "entry level" Cadillac. Yep. Looks to me like GM has a firm grip on their brand identities. Too bad they don't have a firm grip on reality.
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