The press days of major auto shows are the occasion for manufacturers to showcase the solutions they believe will define the future of the industry – and of course, to prove that their solutions are that bit more visionary and pioneering than those of their competitors.


As I walked around the grand unveiling of the Paris Motor Show, however, ‘solutions’ didn’t seem quite the right word. The concepts and ideas I saw are not the answers to the question of what the auto industry’s future will look like. In reality, they simply prompt a lot of new questions. Manufacturers need to think long and hard about what the answers will be.

Question 1: Can the traditional product lifecycle survive?

First of all, there’s the sheer acceleration in the arrival of new models and products with an ever-increasing range of body shapes and concepts on offer. It seems that the auto industry must respond to consumers who are accustomed to shorter and shorter product lifestyles: a new mobile phone every year, a new fashion collection every few months, a software update every few weeks. Tweet this But this explosion in auto diversity and consumer choice raises serious questions about existing business models. Can a manufacturer still realistically plan for a 7-year product lifecycle? The fact that VW recently announced that it will reduce the lifecycle for some major models to five years suggests that in a number of cases the answer might be ‘No’. But can module structures, assemblies and business plans make the necessary adjustments to a faster-revolving auto world?

Question 2: Is Connected Car technology really a differentiator?

The Connected Car dominated proceedings at Paris, claimed by almost every manufacturer as a key competitive advantage – and evidence of just how effectively future-proofed their brand is. The connected car will transform both the driving experience and the nature of the auto industry. Yet at the same time, the ubiquity of connected technology begs the question as to how it can be developed into an effective differentiator for brands.

The challenges are two-fold. Firstly, the speed with which connected technologies develop seems likely to settle the long-running debate as to whether manufacturers should be developing their own hardware, or integrating with established smartphone platforms. A vehicle that’s on the road for several years cannot hope to keep pace with consumer expectations, and the integrated route therefore seems inevitable. This means that all manufacturers will converge on a similar connected car offering based around supporting Apple, Android and other operating systems effectively. The second issue involves the constraints that will inevitably be placed on the connected car by safety requirements. A human driver only has so much attention to go around – and this severely constrains the range of applications that connected cars can safely offer.

None of this will prevent the arrival of the connected car across the auto industry – but it suggests that manufacturers can’t afford to assume that it will automatically deliver a competitive advantage to their particular brand. There are deeper questions to be asked about how the technology and the data resulting from it can be intelligently applied to bring out real, differentiating customer benefits.

Question 3: What does performance mean in a hybrid world?

With every single manufacturer unveiling a hybrid model at the show, the shape of the industry’s response to the carbon challenge seems increasingly clear. But in an increasingly hybrid future, can driving experience still be a differentiator for brands? Deprived of the distinction between different numbers of cylinders or fuel injection systems, not to mention the much-loved sounds of their signature combustion engines, brands need to develop a new vocabulary that can distinguish vehicle performance. And they need to convince consumers that their version of hybrid technology has credible points of difference to offer.

The big questions for brand marketers

Tweet this The future for auto brands seems to be rapidly converging around similar driving and in-car experiences. At the same time, manufacturers are seeking to maximise volumes by developing vehicles for every conceivable customer niche. This puts brand managers under increasing pressure. Can they stretch their brands effectively to cover an exploding range of models that travel further and further from their original heritage? And can they do so when the performance characteristics that could once define their brand are increasingly under threat? Hybrid and Connected Car technology will give manufacturers the license to play in the auto industry’s future – but it’s how they answer these questions that will determine how successful they are.

 


Jürgen Korzer was appointed as Global Account Director in 2014. He is responsible for partnering our largest account and is an expert in Automotive Brand & Communications research.



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