My 2016 Q3 column for Professional manager Magazine
When’s it time to regenerate a brand, and when’s the moment to let it die? The UK car industry knows better than anyone
By the time you’re reading this magazine, a rejuvenated Top Gear will have made not just one, but two much-anticipated comebacks to television screens with a brand new team. To invoke another icon of BBC event television, the show has regenerated – and even mutated into a new weird cousin, The Grand Tour.
The Beeb’s Top Gear concept remains the same: cars, cars and more cars. With the Top Gear branding, the BBC gets to retain all that audience, goodwill and recognition. I’m particularly interested to see the thoughtful journalist Rory Reid’s pieces on the new-look Top Gear. I last saw him being told off for driving too quickly on the Millbrook testing ground’s fearsome Hill Route, in what now strikes me as a very Top Gear-esque moment.
There are parallels in the car industry itself, where diversifications off successful brands are the stuff of life.
The story of how the Citroen DS line was spun off from the main Citroen brand perfectly encapsulates the importance of brand evolution.
Back in 2010, Citroen launched a prettified version of the solid if unspectacular C3 supermini. It was called the DS after that motoring history legend, one of the most beautiful cars ever made: the Citroen DS.
With some pleasant bells and whistles and an awesome turbo petrol engine, the new Citroen DS3 yielded more margin than its plain Jane sister model. Citroen scented cash, and DS versions of the C4 and C5 followed.
Fast forward a few years, and the DS is now a brand of its own. Why? Because people simply will not spend £30,000 on a car with a Citroen badge on it. With a bit of rub from the original DS legend and the quiet removal of the chevron badge, Citroen calculates that it can charge more money for cars that have, basically, been through an episode of Pimp My Ride.
Similarly, mention a Ford Fiesta or Vauxhall Astra to anyone born in the UK in the last 50 years, and they’ll have a good idea what you mean: smallish-to-medium-sized car; runs well; someone at work had one. (Actually there’s a strong statistical chance that someone in your family owned one as Fiestas and Astras have sold 4.5 million and 3 million respectively since they hit British roads in 1976 and 1979.)
The Land Rover Defender, which finally went to the great rutted track in the sky in 2013, was in some ways the same car that was launched as the Land Rover 90 in 1948. Certainly its interior didn’t seem to change much over those 65 years. And my trusty Honda Accord has been represented on British roads since before my birth.
If a car has a poor reputation, you’re not going to hold onto the name so, to some degree, you can gauge the esteem in which a car is held by its longevity.
The Ford Mondeo is now in its fifth iteration and is still one of the finest pound-for-pound cars on the road, more than 20 years since it replaced the Sierra.
Years after it was launched, I once drove the Sierra, a car that revolutionised volume car design, at a Ford car launch and was taken aback by the things we take for granted these days, and how our expectations change imperceptibly over time.
The lack of insulation in the car meant it was noisy and cold, the lack of safety and handling engineering meant the car seemed both flimsy and heavy, while the switchgear seemed painfully basic. Because I love cars, I loved that Sierra – for about 20 minutes anyway. Then I wanted DAB radio, cruise control, heated seats and lots of airbags.
In automotive, changing demands and trends are ruthless masters. Just as the Defender was recently put out to pasture, Honda has confirmed that the Accord will not be replaced. The Astra and Fiesta are still among the top ten best-selling cars on the market, but crossover SUVs are replacing Mondeos and Accords as the large cars of choice.
Either brands die or they become something very different. Brands that refuse to do either are consigned to oblivion.
I expect the all-new Top Gear to be a delicate balance of old and new. The name endures, in theory, as a guarantee of quality, but consumers won’t tolerate products – cars or television shows – that rest on their laurels.
Record sales but Brexit worries car industry
5 trends and outliers in the latest SMMT car sales figures
• 2015 was a record year for car sales, and March 2016 was the best single month since the bi-annual plate change in 1999.
• Fleet sales were up in the first quarter of 2016, driven by a desire for the higher residual values that a plate change brings.
• Demand for alternatively-fuelled vehicles, including electric vehicle and hybrids, grew sharply – up more than 1000% compared to 2006 – as buyers seek cheaper running costs.
• The popularity of cars with ultra-low emissions continues unabated: CO2 emissions of cars sold in March were around 20% lower than the average car on the road.
• But… SMMT boss Mike Hawes warned that consumer confidence could be ‘undermined by political or economic uncertainty’ surrounding Brexit. Toyota, Ford and BMW – all of which build engines or vehicles in the UK – urged Britain to remain in the EU. They believe that without access to the common market or the raft of trade deals that could be jeopardised by Brexit, selling cars to the continent will be more difficult. Standardisation, access to research funding and the free movement of labour are among the benefits they cited.