The Big Three American auto makers are in trouble. The companies are broke, the brands are floundering, and all eyes are on Detroit. Should we support Chrysler, GM, and Ford? Should we give $25 billion of taxpayer money for these companies to pay their debts and keep the unions happy?
Or should we support an innovative startup that values technology and approaches problems with new energy and efficiency?
I think the choice is obvious…
The trouble is, of course, in branding! What does a Chrysler stand for? What are the values of Ford? Where does GM distinguish themselves? These companies have developed brands, and cars, that are middle of the road, dull, and non-distinct. They’ve been aiming for “everyone” as a target audience — the result is that “no one” wants it. This is like what Seth Godin says about Tribes — you can’t have a tribe until you have outsiders. In other words, “everyone” is not an option, you have to select who you want to target. Fail.
I say let ’em fall.
They’ve also failed in innovation. Somewhere down the line, probably in the mid 70s, the American auto makers switched mindsets. Instead of making vehicles that could do more, go faster, out perform and out impress rivals, they started selling cars that made money. Of course every car sale should earn money, but when accountants and marketers take over a company that, ultimately, produces big, heavy, metal things, you know you’re destined for problems.
Personality in auto brands is important. A young, single, male driver doesn’t want to buy the same car as a soccer mom. Teenagers don’t want to push the same ride as their grandfathers. Age, lifestyle, income, and topographical needs (to truck or not to truck), all weigh on a consumer’s mind. So when a company introduces a car for everyone, the father brand loses it’s power.
Car companies are odd in that they all, somehow, take on this bizarre hierarchal structure. Ford produces its own models, but also owns Lincoln/Mercury, Aston Martin, Volvo cars, and until recently, Jaguar and Land Rover. GM has always held this structure with the Chevy, Oldsmobile, Buick, and Cadillac all occupying different strata in the marketplace. Each brand has since spawned it’s own line, blurring the lines between (and among) the branded structure. Chrysler’s most successful brand is Jeep, which could exist as it’s own company. Why doesn’t it?
Now, let’s compare that with something like Tesla, the maverick electric car company that builds one model, a $120,000 roadster. The car itself embodies the brand values, innovative, energetic, rebellious, and exclusive. The purpose of Tesla isn’t simply to sell fast-moving convertibles, but to push the industry forward with every new model that rolls off the lot.
The trouble with Tesla is simply how to get it off the ground! Starting a car company isn’t easy, there’s a lot of overhead that comes along with assembling the cars — let alone the design and research behind making a prototype (often required for funding). Politics will also intrude on a cold launch and squash startup ventures. Remember the Delorean?
Tesla has plans for a four-door model in the same mode as the original roadster. Although the four-door is slightly more sensible, it’s not such a massive departure — it’s still “on-brand.” Another company that’s done this is Smart. A subsidiary of Mercedes, Smart has a distinct brand associated with their distinctive car designs. The original Smart car has been joined by a four-person brother, but the soul of the brand is still intact. You wouldn’t find a Tesla pickup truck, or a Smart minivan, so why are Ford, Chrysler, and GM so desperate to extend their lines every which way?
With government support for smaller companies and startups like Tesla, innovation in the auto industry would become the norm, not the exception. Companies would be able to introduce new products within a year or two, rather than a decade as is the case with massive companies. A culture of competition would drive the market, and the makers. The demands of the people would be heard faster and more directly than going through 14 layers of corporate feedback loops. Everything would be better, methinks.
There is a shift in the auto industry, and Washington should allow it to happen. Smaller, targeted, efficient automakers are taking over. The Big Three are going bye-bye. Let it happen. Embrace it.