Phil Biggs covers the automotive industry for NewsTalk 1340 WJRW
April 4, 2013 – 1:30 pm ET
DETROIT, Mich. – Over the past decade the automotive OEMs have worked hard to move away from an underwhelming manufacturing/finance-driven focus to become marketing/design-driven companies. Instead of purely cost dictating design decisions, manufacturing and finance have begun to take new and daring investment approaches as vehicle program decisions are made. Here are several observations:
Understanding the impact of vehicle design and setting the right customization requirements is crucial for today’s automakers to achieve both volume and profit. Nowhere is the mass customization trend more noticeable than among the 70 million-plus Echo Boomers, who demand customization in everything from the look and feel of their iPods and Smartphones to the “anything goes” approach in how they personalize car interiors. Make no mistake, the automakers that understand the qualitative fashion aspects of customization – from ambient lighting to reconfigurable trim to on-board advanced technologies – will emerge as the clear volume winner.
What shapes our emotions and impulses, what drives our “psyche” when we buy a car? There is an ever-growing range of factors, starting with powertrain options, in-vehicle technology choices, luxury appointments, and of course the look and fit of the exterior of the vehicle. As car buyers, many expect their cars to make a fashion statement about them. Whether they drive a Ford F-150, a BMW 328, or a Buick Enclave…their car must “represent” their good taste and superb judgment. For many, the look of their car reflects their passion and values. As Ford Motor Chief Sales Analyst Erich Merkle says, “Automakers today are not in the transportation business as much as they are in the fashion and entertainment business. Many times, the automobile has become an extension of the suit or wristwatch that the car buyer wears.”
Taking design risk is critical in order to compete, let alone win, in the highly fragmented, fickle car business. The perception of where quality and coolness interact is reinforced in the design of the vehicle as well as its emotional appeal on the street. For example, if the car interior, where we have our greatest interaction with the vehicle, looks and feels
cheap, the consumer will not perceive quality. The lowest price design isn’t without a cost, real and perceived. So what’s the cost of falling sales and share loss? Today, the inability to predict American tastes has caused soft growth for some OEMs, even with volumes in North America spiking the past two years, and expected to rise through 2015 at least.
But OEMs have only so many investment dollars, only so much risk they can afford. With huge sums being put into on-board electronics and the latest technology interface, and even more investment with hybrid and electric options, how much is left for a bold, striking exterior design? They may not be able to afford a Maserati Quattroporte on a Chevy or Ford budget, but today’s consumers hope for at least some of that unique styling! And in many cases, that’s what they get: a bold looking car for a reasonable price. The industry can now boast some very cool designs, with leading-edge technology, and even electric powertrain options, all for $30,000 or even less.
“There is a pedigree and a heritage of European design missing in some of the American brands,” Giles Taylor, Director of Design of Ro
lls-Royce, told Forbes recently. Taylor believes that the Domestic Three – GM, Ford and Chrysler – significantly lag behind in beauty, elegance, and motif. That’s true in part but, of course, it’s easier to make those allegations when you are responsible for sales of only 4,000 versus millions.
Domestic automakers have come a long way in ten years. No, they’re not ready to compete with Ferrari, Maserati or Rolls-Royce in overall design or luxury. And in no way can the iconic look of a Rolls or a Ferrari be duplicated for just a fraction of the cost. But the value and satisfaction gap is shrinking. Want proof? Just look at how much the new Ford Fusion fairly resembles the Aston Martin, or how the new Cadillac ATS outdoes the BMW 3-series in look and performance, at a cost well below the price of the BMW. Progress has been made. And design matters…it wins…and it makes a difference here in America.
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