Brand promises in the Automotive Industry

2013 Porsche Boxster

Car companies spend mega-bucks on marketing departments and advertising agencies, all with the aim of engaging you, the potential customer, with their brand. They want you to relate to their product easily, and a good brand fit does a nice job of greasing the tracks in that department.

I’m not a one-man marketing department, nor am I an advertising agency, but I’ve spent a LOT of time drooling over cars in my lifetime, writing about them and even working for a car company. I also have my own thoughts on brands and the promises they make. My theory is a simple one: the relationship a customer is likely to have with you, as a company, is based a lot more on their experience than it is on your words.

When I talk about experience, it doesn’t have to be an experience they’ve had first-hand, either. I don’t have to have competed in Le Mans with a Porsche to know that Porsche are extremely good at racing. What matters is that I’ve had plenty of exposure to the fact that Porsche have competed in – and even more importantly, won – a lot of races. They’ve achieved a lot in racing, and the stories about Porsche racing are told not just by Porsche (there’s a key – get others talking about you and you’ll get some of your advertising for free).

Lots of car companies have built their brand based around experiences and/or achievements. Those brand identities are action-based and they say a lot more about a car company than words written across the top of an advertisement – and before my mate Curvin O’Rielly gets mad at me, advertising’s important, too, but it’s not the focus of this article.

I think brand promises are something that take time to build. They are the sum of years of achievement or experience, just like Porsche’s racing career. If the company’s current products align with those brand promises, then the brand experience for the customer is that much stronger. If the company’s current products don’t align with the brand promise, then the company’s sales will most likely decline as their customers’ brand experience deteriorates (and as word gets around about it).

Simple, no?

Let’s take a look at some car companies and see how their brand promise matches up to experience.

Please note that these are just my beliefs about brand promise. A brand’s promise to you is very dependent on what you know about it, what you’ve experienced with it. Some of that will be because a company has touched you directly in some way and some of it will be because your Uncle Albert had one when you were a youngster.

MINI

MINI’s brand promise is built on the qualities that made it a cult car back in the 1960’s, for being cute, simple, affordable and practical. Because it was so nimble, it was a fun car for a lot of people, too. The original MINI has an iconic look to it and still looks good today. It was used in movies to great effect because it has character, so much so that it’s seen as a symbol of its time.

I think BMW’s new iteration of the MINI has been very successful for a couple of key reasons. First, they made sure the new car looked like a modern interpretation of the old one. There’s a definite visual relationship there. Second, the new MINI is surrounded by fun marketing. It’s cheeky, engaging and the visual cues make it easy and fun to relate to. Third, and perhaps most importantly, the car is fun to drive. None of the above means a damn thing if the product is no good. A car has to live up to the brand promise or it’s all a waste of time – the MINI does.

Result? The new MINI has been an outstanding success, both in terms of building sales and building community. Where I live, old Minis and new Minis alike participate in club events and a special Mini-mania weekend with a massive group photo. There seems to be a great acceptance of the new MINI by the old guard, which has to be the greatest compliment of all.

CHEVROLET

This is an example where it’s important for you to remember that brand promises are subjective – they depend on your own experience. In Chevrolet’s case, I have a feeling that people in the company’s home market have a completely different set of experiences and forgave Chevrolet a long time ago.

As an Australian, my experience of Chevy (I use the abbreviated name deliberely here) is based on the cars of the Harley Earl and Bill Mitchell eras. Big fins and muscle cars, all with a big fuel-sucking, loud V8 big block up front. It’s still seen as an aspirational thing here in Australia to put a Chevy bow-tie badge on your V8 Holden Commodore.

Of course, the modern reality for Chevrolet is quite a bit different. Aside from the Corvette (which most clear-thinking people see as a brand of its own), modern Chevrolets have absolutely none of the flair or character that defined the brand’s halcyon days. In fact, Chevrolet is now GM’s budget brand in Europe, selling cars designed mostly in Korea and manufactured on the cheap in various low-cost factories around the world.

Results? The interesting thing is that most of the markets that have Chevrolet as GM’s budget brand probably didn’t have much exposure to the Chevy of old. As such, there’s not so much conflict in terms of the product and what I see as the brand promise, and sales of budget Chevys do pretty well in many European markets, especially in the east.

I don’t think GM will rush to market Chevrolet here in Australia with those budget-buckets, however (they’re sold here as Holdens, which is a brand promise conflict in itself).

ALFA ROMEO

A brand that’s dear to my heart, Alfa Romeo built its following on performance and racing. The cars had elegant, beautiful styling matched with willing, revvy engines and rear wheel drive. They were light, handled well, had beautiful sounding engines (the V6 – mmmmm) and simply looked fantastic. That the company had plenty of racing success in its early years only added to the mystique. That’s the basis for a brand promise that still exists in many people’s hearts today.

The modern reality is very different, however. Having largely abandoned rear wheel drive back in the 1990s, and after being hurt by reliability and rust concerns many years earlier, the company has had to reinvent itself in recent times and has become more about style than substance.

(Most) Alfa Romeos are still heart-achingly beautiful to look at. But a move to front wheel drive has dampened the performance attributes of the cars and when your brand promise is built on a history of racing success and being a true driver’s car, that’s a hard thing to overlook.

Alfa Romeo has tried to re-claim some of that ground in recent years with the 8C Competizione and the 4C, which they’ll release in 2012. The 8C was amazing to look at and sounded like a symphony, but road tests (OK, road tests often suck) weren’t completely complimentary about the driving experience. Alfa Romeo restricted the 8C to being a high-price limited edition, supposedly for exclusivity, but one suspects because they knew something that might be classified as a truth – that maybe even the 8C wasn’t everything it should have been.

Results? Alfa Romeo recently passed its 100th anniversary, though it hasn’t been a life without difficulty. Right now, the brand has a magnificent-looking new Giulietta that supposedly drives very well indeed. I hope it’s enough to save one of my favourite brands because it’s struggling with sales and re-introduction to the US market has been postponed time and time again.

You want a damning sign for the future? Alfa’s car museum has been closed indefinitely as Fiat doesn’t want to bear the cost of keeping it open.

PORSCHE

Porsche’s brand promise is built upon years and years dedicated to performance driving and racing. It’s slightly ironic, therefore, that Porsche are now one of the most profitable carmakers in the world because they sell Panameras and Cayennes at high margins, to people who I’m guessing always wanted to keep a Porsche in their garage, but who’s needs outgrew their 911.

Porsche had some difficulty with their brand promise back in the 1980s with the 924, 944 and 928. These were all well engineered cars that sold reasonably well and kept the company afloat in difficult economic times, but they eroded the brand’s value to a certain extent and used values for these models are well below the 911s from the same period -even if the performance of some models, e.g the 944 Turbo, is comparable to the 911. (Ironically, these 1980’s Porsches are some of my favourites).

Porsche is an example of a company that has changed its brand promise slightly, which according to my interpretations about brands is OK as long as the promise/product improves accordingly.

In Porsche’s case, they’ve gone from being a majority racing-focused sportscar maker to being a maker of high quality, high performance cars across a range of segments. Porsche’s traditional model offering was all small, all lightweight and all sporty, but they now offer a focused smaller sports car (convertible and hardtop), their traditional mainline sports car, as well as an SUV and even a ‘four-door coupe’. They even offer …. *shudder* … performance diesels. Ferdinand would be spinning in his grave.

Porsche’s products get consistent high ratings and continue to sell well. Even the Panamera, which gets a fair amount of criticism based on its odd proportions, is selling well, recently overtaking the Cayenne in sales. The level of technology in Porsche’s cars is consistently high and despite their movement into other segments, Porsche’s main marketing focus remains on their halo product – the 911 – which is relentless in both its improvement and appeal.

HYUNDAI/KIA

All of the brands that I’ve covered so far have a common element – history. Hyundai/Kia is in a slightly different basket because they don’t have a rich heritage to draw on. They’re creating their history – and thus their brand promise – right now. This can be both a good thing and a bad thing.

Having a rich heritage to draw on gives your brand a story to tell, one that people can relate to through their own past experiences. This is a blessing if your products continue to build upon that heritage (Porsche, MINI) but it can also be a curse if your product no longer carries the flame in the same way and you fail to adjust your brand promise in a way that people accept and adopt (hello, Alfa Romeo).

Hyundai’s first brand promise was one of cheap and cheerful motoring. Here in Australia, their uber-successful Excel from the 1990s was commonly referred to as the Hyundai Arsehole (because like opinions, everyone seemed to have one). The Excel sold purely on price and the company’s profile and promise was downplayed in the market for that reason. People assumed that the cars weren’t of any notable quality because they were so cheap.

Then something happened that people didn’t really expect – Hyundais got good reviews. Not only was the Excel cheap, it was a reasonable drive for the money and as time progressed, it proved itself to be reliable, too. What Hyundai did with their price-leader was effectively shoe-horn themselves into Toyota’s market, offering something every consumer wants – value.

Hyundai took on the global financial crisis in the US by offering a huge 7-year warranty along with a promise to take lease cars back if the lessee lost their job. Their market share rocketed.

They set up new design houses, most prominently in California, and started producing designs that weren’t just clones of aspirational European marques. Hyundai’s design language hasn’t got to a point where you could say it has ‘stickability’ yet, but it’s improving with every generation.

And you can now add sister brand Kia to Hyundai’s success as well. Kia have completely leapfrogged Hyundai in terms of design and with similar engines and warranty, they are selling like gangbusters around the world.

Neither brand has an exciting brand promise to offer customers. All they’ve got is value, but they’re improving their value offering all the time with good engines, well accepted design (and unlike Toyota, the behemoth player in this segment, Hyundai/Kia’s design seems to be a bit more edgy and interesting) and good price points.

In a segment that’s 100% about the product, Hyundai/Kia are delivering on their brand promise, giving people contemporary products with solid backing at good prices.

TOYOTA

Toyota built their brand reputation on consistent quality and reliability for the whole family. In an era when women began to earn more and have a much greater say in car purchasing, Toyota came to the fore with their Corolla small car and Camry family cars. They were efficient, easy to drive and most of all, they rarely left their owners stranded (a compromise some buyers were willing to make in order to gain style or performance points).

Hyundai/Kia have emerged, however, and you can only stay blandtastic for so long. Toyota have tried various things to ‘sex up’ their image. You can now see a ‘Camry’ in Nascar, for instance. If you find that to be sexy, good luck to you, but at least it’s an effort on their part and it hasn’t been without success. Their foray into Formula 1 was less of a triumph, yielding zero victories in eight seasons.

Toyota’s brand promise has taken a battering in the last few years. The unintended acceleration crisis in the United States led to massive recalls which, whether justified or not (they weren’t), damaged the company’s reputation for reliability in a big way. They’ve had other problems, too, and will have to use their massive cash reserves to rebuild customer loyalty after ending up #1 on the USA recall list in 2011. Toyota have recalled nearly 11 million vehicles in the last three years – staggering. Whilst some will call this dedication to customer service, others will call it a lack of reliability and when you’re Toyota, that’s a killer.

Result? Combined with natural disasters in Japan, Toyota’s recall issues have hurt its sales. Just a few years ago, they were challenging General Motors for the title of the global #1 car company but that race is effectively over. Volkswagen are now challenging for that title and might well take it in the next year or so. And Toyota’s battle is probably less with GM and more with Hyundai/Kia in the next few years.

SAAB

I couldn’t take on this post without turning my attention to my favourite brand (and up until recently, my employer) – Saab Automobile.

Saab built up a solid following that was based first on the company’s rally success in the 1960’s and 70’s. As the company grew and expanded its geographic reach, its product portfolio also became more sophisticated, exploding in the 1980s with the iconic Saab 900.

The Saab 900 still dominates Saab’s brand promise, even today. The 900 didn’t launch Saab’s turbocharging technology, but it was the car that took turbos to the masses in a package that was distinctly designed, incredibly practical and suitably comfortable. Saab became a left-field choice based on the car’s distinctive styling and impressive engineering, which in many respects was way ahead of its time.

This earned the company a very loyal following, which continues to this day. Ask that following which Saab is the most Saabish (as I’ve done many times) and the 900 will top the poll again and again.

When Victor Muller purchased Saab from General Motors in early 2010, he started talking about building Saab Saabs once again. You can take this as tacit recognition of the fact that Saab wasn’t delivering on the brand promise built up over thirty or so years of innovation and distinctive styling.

General Motors bought 50% of Saab in 1990 and the remaining 50% of the company in 2000. Under GM’s ownership, Saabs actually improved in terms of sales numbers and reliability. They made some excellent cars in that time with some truly outstanding qualities.

I guess you could say that if Saab failed to deliver on its brand promise, it might be in terms of their position relative to their competition. In those halcyon days, Saab were innovating and outflanking many of the companies that are considered to be European premium brands today. Saab’s engineers made huge steps in terms of engine technology and vehicle design, but Saab’s work in this area was starved of investment by both their Swedish owners and by General Motors over the years.

The company lost its iconic hatchback body style in 2003, which was a major blow to the brand’s traditional customers. Interiors were still well designed, but cheapened with some inferior materials in the name of cost-cutting. Saab customers still got very, very good cars (much better than the media portrayed them to be), but it’s fair to say that the cars weren’t as good as they could have been – and many consumers knew this.

Saab had many model variations on the development table around 2001-2002, with a substantial model update timetable in place. They had a true crossover vehicle almost to production standard well before competitors like BMW stepped into the segment.

What happened? Bob Lutz happened. Saab’s planned product portfolio was slashed and slowed and whilst the 9-3 Sport Sedan and convertible had commendable launches, the failure to back those vehicles up with the crossover and wagon variants in quick time stunted the brand’s growth. The cancellation of a timely 9-5 replacement, the 9-7x and 9-2x didn’t help, either.

Saab’s fans kept pace with the company long after many other brand enthusiasts would have given up. The company had excellent new products and a wonderful replacement for the 9-3 range in the pipeline when the company declared bankruptcy on December 19, 2011 (just 11 days ago as I write this).

We’ll have to wait and see if Saab is purchased as a going concern, and if so, what any new owners plan to do in terms of products in development.

Saab has a wonderful heritage and could reclaim its brand promise with a lot of hard work. The talent certainly exists in Trollhattan to do so. As has been the case for decades now, all they need is the right level of investment.

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15 Comments

  1. I love that Alfa 8C Competizione. It’s the best example of a modern car with a classic design. I was fortunate to see one at an Italian car day just a few miles from my home. It is even more beautiful in the metal than on pictures. I can’t wait to see the 4C. And the price tag of the 4C may even make it a possible second hand replacement car for my Boxster somewhere down the line!

  2. I haven’t had the pleasure of seeing on in person, yet, Arild. Well, aside from at a motor show. It did look stunning, but I’d love to see one on the road to get a real impression.

  3. Swade, you may never work for a car comany again, but it would be a fool who did not hire you, or at least pay you to write about cars and the automotive industry. You have a knack, no, a gift that few automotive journalist exhibit. The right mix of knowledge & enthusiasm without all the pretense I find too common. Your recent experience with Saab had to be disappointing beyond words, but I see great things ahead for you.

  4. Very well written, Swade, on all points. I didn’t realize the Chevy brand image overseas was what it was until I started watching Top Gear (UK, not US). Here in the US, Chevy makes a good pickup truck (ute) and couldn’t make a worthwhile retro muscle car until it went to the Monaro platform (GTO, of wich I own one, and the new Camaro). Their line-up really doesn’t inspire much at all as a consumer. I’d have to say, the Hyundai/Kia line are indeed VERY interesting. Optima (Kia) and Sonata (Hyundai) in particular are truly turning heads here.

  5. I must admit, that my view on those brands is very different from yours, but on some cases it is because of the local awareness of the brand.
    Best case: Chevrolet
    While in the past Chevy was an US only brand for European customers, and only seen as a joke, even the Corvette was not seen as real competitor to Porsches and Ferraris, the rebranding of the Korean brand Daewoo to Chevrolet in Europe by GM did not help either.
    Chevrolet could be on a level with Hyunday/Kia, but while the later tried to improve the quality of their products, the former only tries to reduce production costs.

  6. Nice to see you back in the saddle Swade. Great topic. Perhaps in a spare moment you could cover the brand promise of ALL marques – although a little more brevity may be in order.

  7. I’ve seen three 8C’s so far. One at a Concours in Holland ( http://www.flickr.com/photos/geertkusterjr/2818961238/in/set-72157607061379761/ ), one passed me at the freeway doing 100mph or-s0 and was a stunning white convertible.

    Do you remember my pictures of the NG9-5 SC I shot at a dealership? Just around the corner were 2 8C’s …!!! A coupé and a roadster, both in flaming red. Wonderfull…

    The 8C is one of the most beautifull cars produced. That it handles slightly less then others, is with these looks not very important.

    What companies still don’t understand, is that ‘they’ have to stop thinking about USP’s, but in UBR’s… No Unique Selling Points, but Unique Buying Reasons!!!
    Talking about buying reasons: the 8C is such a beauty to look at, that a bad handling wouldn’t effect me wanting to own one.

    Dreamcar for the weekends for me is a Brera by the way 😉 A coupé in skyblue or anthracit with the two-tone leather and dash, the too heavy sky-roofwindow and the nicely build 2.4 JTD 5-cilindre.

    Great article, nice and easy to read. Even for a non native-English reader! Hope you’ll have some clarity about your own future. You really should try for a continius column in an international car-magazine. Your writing appeals, also for foreign readers.

    Cheers and best wishes for 2012!!

  8. Hi Swade, nice to see you blogging again! I discovered this site today and have already added it to my RSS feeds. 🙂

    This was an interesting article, and I agree with most of what you write. It would be interesting to hear what you think about Subaru. In some ways they are a bit like Saab; an underdog company with aircraft connections, driven by engineers who develop innovative technologies. My father has owned ten Saabs in his life, and not a single car from another manufacturer. He has said to me that when our current Saabs (one ’99 9-5 Sedan and one ’06 9-5 SC) needs to be replaced, he would probably buy a Subaru if he couldn’t buy a Saab.

    1. A few years ago, I would have agreed with your Dad. I don’t like Subaru’s new stuff anywhere near as much as what they were doing three or four years ago. They used to be lean, mean and hungry (and practical) but they seem to have got a lot more bloated in the last few years.

      Our youngest still has his first car, an Impreza, and it’s a fun drive. Useful, too. I had a new WRX for three months back in 2008 and didn’t rate it at all.

  9. Hi Swade,
    a happy new year to you and your family from Germany.
    Nice to have found you again.
    I read your blogs since mid-2009 and without them I would miss something.
    The tallent to build cars come from Trollhättan but the writing tallent come from Tasmania, perhaps the most beautiful piece of earth where I was for a few days in 2008.
    (sorry for my bad english!)

  10. Always good to hear from you Swade.

    I think that you are being too kind on Toyota. Most of their troubles are self-inflicted. They cut costs to an unprecedented level, leading to cars that are cheap on the surface (compare a current Toyota and Hyundai interior), but also cheap underneath. I’ve heard from industry people that their acceleration/deceleration (ABS) issues were partly due to their borderline system configurations: slow CPUs with minimal memory and not enough error checking. That leads to an automotive “blue screen of death,” as it were.

    I would love to read your take on Volvo. They’ve certainly benefited a lot from old brand promisses (wrt safety), and they’ve banked their “simple but reliable” image way beyond the point where it stopped making sense. Their traditional audience long ago went to Subaru, yet they’ve managed to maintain decent sales levels as a maker of SUVs that don’t look as big as they are.

  11. First,

    Great to have you back as a blogger! I´m enjoying every entry. No matter what the brand is as long as YOU are writing about our passion – cars!

    Anyway, I seem to think quite a lot like you on most of those brands. I find it really intersting you brought Huyndai / Kia here as well. I have to confess, but I find Kia a very intersting new brand. It seems that they made really profitable investment by employing Peter Schreyer. He´s made a fantastic job for Kia. Like the new Sportage. It really makes Q5 to look bland and boring. This really shows how design is more and more important today. Like you wrote on “Why most car reviews suck”: “Most cars made by most manufacturers can satisfy the needs of most consumers” This is very true. And for this reason the design (to name one) is really important.

  12. VERY interesting post, and the idea of “brand promises” certainly got me thinking…

    In the US however, I’d refashion this statement as “brand projections” rather than brand “promises,” as in, “what do the characteristics of this brand tell the world (my friends and family) about who I think I am?” I think 95+ percent of US luxury sales are driven by this “brand as projection of self” aspect.

    The only brand I can’t easy fit into this peg is Acura, whose success continues to baffle me. They’ve seemingly done almost everything seemingly possible to destroy whatever their luxury brand promise is and have committed almost every sin. From baldly rebadging Euro Accords (and in Canada Civics), to grotesque design, to a lack of commitment to RWD, to nasty plastics, to technology that’s consistently a step behind competitors, Acuras continue to sell fairly well here. I just… don’t… get… it… If GM or Ford pulled not only one of these, but ALL OF THESE SIMULTANEOUSLY in a model line, the media would obliterate them, but Acura gets a pass. Really, why? I’m starting to think Acura is the luxury brand for buyers who view cars as appliances.

    Since we’re on the verse of the debut of 3 new Acuras here in the US, I felt it was time to bring them up in the context of Swade’s brand thinking…

  13. Interesting article as usual.

    Totally agree with your comments about Alfa Romeo, a brand very close to my heart.

    They seem totally confused about their brand promise and really need to get their act together and very soon too! Two models in their stable just won’t cut it these days as there are so many other brands out there who are offering so much more! The 4C is coming (I’ll believe it when I see it!) but there is no way it will hit the market this side of 2013 IMHO, if at all! And as for the US launch, well, the US dealers are not happy as they have spent a huge amount of money in upgrading their dealerships for the Fiat and Alfa launch and only have Fiats to sell and only the 500 at that! They are not exactly flying out of the dealers either with pretty poor sales figures and targets that are well out of reach at the moment so I can’t see Fiat or SM introducing Alfa back into the US any time soon and even if they do, it might already be too late for Alfa.

    Interesting to think that Alfa only have two models in their lineup at the moment both of which are statrting to stall sales wise as they have both been out for two to three years now, yet Saab had three models in their stable when (sadly) they went into bankruptcy.

    Makes you think!

    Griffin Up! Cuore Sportivo!

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