Automotive - Interbrand

Rover, could learn much from amainstream success like Toyota.Car companies need to re-establishtheir position as pioneers ofproduction. This essential move maynot produce lucrative results for sometime, but doubling down on changewill accelerate not just profits,but survival in the longer term.This strategy runs along twoparallel tracks: Streamlining analready existing process so thatit stays productive and profitable,while using the cash generatedfrom that to build a more efficient,future-proof structure. Part of thatcould involve cutting wasteful andunprofitable low-volume products,while another aim would be to makefuture production more modularby sharing parts and productionequipment across multiple models.Toyota is one example of a companywhich has taken those strategiesto heart; it maximizes the use ofcommon parts and processesthroughout its range, making itscapital expenditure one of the lowestin the sector. However, it has alsokept a strong focus on innovation,particularly in hybrids, while keepingdevelopment costs in check thanksto collaborations with companiessuch as Subaru and Yamaha.OEMs should strip back on allbut the most profitable elementsof their traditional revenuestreams, preserving only theessentials and pushing capitalinvestments to the future.02Know yourdark sideAnxiety can evoke the dark sideof any business, and brands thatare blind to theirs are at greaterrisk of succumbing to problems.As recession bites, there is anincreased likelihood that existingcustomers may default on carloans – many of which are owed tocarmakers’ finance arms. This posestwo challenges: short-term cashflowlimitation and subsequent longterm investment priority options.Demand for used cars appears robustin the US and Asia – and showroomsfilled with cheaper second-handmodels, brought about by anincrease in returned or reclaimedvehicles, creates an attractiveshort-term fundraising option.But in the immediate short-term,sales data risks boosting theperception of demand, skewingcustomer desire for traditionalcarbon-fueled vehicles. Thismisleading surge could potentiallyreduce the incentive and/or urgencyto switch to an EV-first approach.OEMs must be sensitive to thefact that urgent change is coming.Now is the time to get ahead of thecurve, not to take easy short-termoptions, no matter how immediatelyattractive and convenient.03and complement traditional salesand service center models and builddigital platforms that reduce friction,making it easier for customers toaccess and engage with products,on their terms – ultimately unlockingnew, more lucrative revenue streams.In times of crisis, innovative brandsmust think from the future back,rather than from the present forward.Innovative finance packages,customer-centric pricing strategies,and on-demand subscription modelsall have the potential to minimizeentry barriers for new customers.Luxury brand Porsche, for one, hasalready started implementing suchservices through their Porsche Driveand Porsche Passport programs,making even the most exclusiveforms of mobility more accessible.Be shaped byaspiration, notby traumaThe dealer model is a case in point. Ithas been a mainstay of the industryfor many years, but it has certainlynot been without its pitfalls – it hasa reputation for poor standards ofcustomer service, cynical practicesand price-gouging, and on theservicing side a real issue with levelsof expertise and profiteering.Consumers aren’t happy with thedealer experience. They’d liketheir car buying to happen closerto home. Which is where digitalcomes in. According to Googledata, 18% of auto shoppers wouldbuy a vehicle sooner if therewas a purchase option online.The same is true of parts andservice. Consumers anticipateincreased online ordering of partsand would like to see more traditionalservicing to be carried out at home,rather than in the service center.In the short term, OEMs need to thinkcarefully about how to enhanceTIME FOR ACTIONThe future is not going to wait. Thereare disruptors and potential rivalswaiting in the wings – many from thefast-moving, flexible and well-fundedworld of technology rather than thesolid but staid engineering tradition.Not coincidentally, all of the top fiveof this year’s Best Global Brands –Apple, Amazon, Microsoft, Googleand Samsung – have been linkedto vehicle development recently.Now is the time to rethink everything– which is difficult for a sector thathas long product cycles, large andinflexible production processes and athoroughly entrenched sales model.But if not now, when?The future is not going to wait.There are disruptors and potentialrivals waiting in the wingsBest Global Brands 2020: Automotive15

The customer’sview: Fromicon to cocoon,glamor to utility Freedom has always beena huge part of the car’sappeal. But in 2020,‘freedom to’ has changedto ‘freedom from’. The ideaof picking up friends, goingto the beach, driving to an event oreven just commuting in comfort hasbeen replaced by avoiding publictransport, staying away from otherpeople – and in many people’scase, not commuting at all.It wasn’t always like this. In late 1950sAmerica, having a car was everything.For the first time, vehicles wereuniversally accessible. As per HenryFord’s prediction just 30 years earlier,“any man with a good job can affordan automobile”. By 1958, there were68m cars registered in the UnitedStates – up more than two-fold sinceBest Global Brands 2020: Automotivethe start of the decade (from 25m).We can’t underestimate the socialsignificance of the car. Between 1949and 1964 (and beyond), the wayswe shopped, ate, worked; where welived and how we socialized; howwe vacationed; how we dated (andwho); how we engaged with popularculture and who we idolized – evenwhat we valued – all changed as adirect result of the automobile.No cars would mean no plushsuburbs. No drive-in movies. Noshopping malls. No Golden Arches.The very tenets of westernconsumerism are built on fourwheels. Simply having a car said‘I’ve made it!’ More importantlyit shouted adventure, freedom,discovery, excitement and liberation.

THE NEXT GOLDEN AGE?2020 has changed everything.The revolution is coming Again.If you’re leading an auto brand in2020, undoubtedly you’re feelingthe strain. But let’s not miss theopportunity. If you lead an autobrand in 2020. This. Is. It For the first time, in a very long time,as consumers, we’re actually excitedabout leaving the house. We wantto be outside. We really want to beoutside. And outside looks verydifferent. Because when you can’tgo outside, adventure no longermeans an expensive vacation. It’snot the annual family trip to Spain orGreece; it’s not backpacking in Peru.For the first time in decades, asconsumers, we want our cars.Moreover, we need them. Wethink that the landscape is set fora new golden age in auto travel.In the United Kingdom, the NationalCaravan Club reported that salesof motor homes had risen by 71%in July. More than a third (37%)of those sales were from peoplewho had never owned a caravan.34% of new sales were made bythose under the age of 44. Caravanholiday bookings for next year’sseason are already up by 200%.Across the US, the #vanlife trendis booming. As is the price tag.A Mercedes Sprinter might cost 40,000 new. Converted, the valueof what’s essentially a trade vehiclecan rise to anything from 100,000to over 400,000. Most suppliershave 10 month-plus waiting lists.What does this mean? It’s more proofof the vehicle-as-cocoon idea; thefreedom of the open road, plus thesafety of having your very own space.The pandemic has in some ways shotattitudes right back to the 1950s.All of a sudden, those vintage travelposters of winding roads throughparks and forests are seductiverather than out-of-date. Flyingthousands of miles to stay in a hotelseems both dull and dangerous.The new adventure is closer to homeand involves your own wheels, yourown space and your own itinerary.We’re all going on a road trip.Have the world’s leadingOEMs caught on? And howdo they take advantage of thisunprecedented opportunity?70 YEARS ON, WHAT HAPPENED?Cars can be an identity purchase;a statement of who we are. Whatdoes a Mercedes say about you?They are advertisements for you onwheels, or at least they should be.But now, while our cars are stilla big-ticket purchase, they aretoo often just a necessity. Aconvenience. At worst, a utility.Cars – and car brands – just don’tseem to mean what they did.As consumers, our relationshipswith our cars are increasinglyfunctional. We now ask: Is it safe?Is it reliable? Is it economical?Given the advancements inproduction capabilities and newtechnologies, the answer to thesequestions is ubiquitously ‘yes’ atpretty much every point across themarket. There are no longer anyreally bad cars – only dull ones.The net result: we rent cars, evenwhen we own them. Our relationshipswith our vehicles are transient. Atbest, we want the next model. Wecare the most when we buy – butalmost as quickly as we’ve driven ourcars off the forecourt, they disappearinto the background narrative ofour lives; they’re a functional andphysical manifestation of the routine.Emotional equity depreciates almostas quickly and almost as dramaticallyas that of the machine itself.For too many of us, our cars are likeour washing machines; functionalmachines that serve a purpose.You buy the best one you canafford, then forget about it. Noone loves their washing machine.But does it have to be this way?

FROM ‘WHY EV?’ TO ‘WHY NOT?’What we value, and what we wantto say, now have a greater senseof urgency. The symbols we useto communicate our perspectiveon the world are more meaningful.Cars have always been aninstrument of self-expression.This emotional need is unlikelyto change. But what we sayand how we say it is shift

Automotive Finance Luxury Media Retail Sport Tech Move In the Decade of Possibility. Best Global Brands fl flfi Automotive 5 Welcome to Best Global Brands 2020 At a time of deep reflection, the deepest form of relevance is increasingly being driven by an uncompromising approach to fundamental human issues. Businesses that do not yet know, very specifically, which constituents they are .