The battle of the brands

So I just got back from the massive Beijing Auto Show. Before anything, I should start by saying that I only got to spend an hour and a half in there, which in terms of coverage is like claiming you know a country because you had a stopover in the airport. Or you visited Scarborough Shoal. So please don’t expect a comprehensive summary. 

But that’s not to say I didn’t learn anything.

Sure, I’ll admit that half the time I felt like I was walking through the movie set of Clone Wars, but once I grew immune to them, there were some real eye-openers there. Not necessarily the supercars, either—like the sell-your-soul-worthy Ferrari F12—but from the mainstream guys; so I decided to sum up those thoughts and share them with you.

First, I noticed that there are more car brands in China than anywhere else in the world. This got me thinking about the industry as a whole and what it means to you and I, Mr. and Mrs. Consumer. 

Fact number one: The Chinese know how to build cars as well as anyone else. Ok, calm down, established brands, give me a chance here. I’ll say it again slowly. The. Chinese. Know. How. To. Build. Cars. As. Well. As. Anyone. Else. The problem is, almost all of them choose not to.  

Let’s face it, with rate of technology transfer these days and uniform manufacturing techniques, building cars is not rocket science. And when you consider that the Chinese were building rockets and spacecraft since the Fifties and has become the third country to independently send humans into space—not counting their military equipment, nuclear weapons, submarines, buildings, you name it—then only a fool would underestimate them. As they say, God created the world in seven days. The rest was made in China.

What I’m getting at here is that once the bulk of the Chinese manufacturers begin to rustle up the will, or more importantly, the corporate conscience to develop cars properly, the mainstream European, Japanese, American and Korean brands will have a hell of a lot to worry about. 

At the moment, R&D in the Chinese automotive industry stands for Research and Duplicate. Once they swap that for development, we will see a surge of affordable, reliable cars. 

Thankfully, there’s a big difference between reliable and desirable—and we all know that if we chose our cars on plain logic alone, we would all be driving something Swedish. But we don’t; because cars are still one of the most emotional purchases one will make. Sure the Chinese can just throw obscene money at the best designers, but the loyalty that that brings is superficial. There needs to be something deeper. Which is why I feel that the competition will eventually come down to heritage as well as good, solid brand values—and most importantly, the ability to communicate that effectively.

Take Chevrolet. Here’s a brand that was rescued from the ashes of an orphanage back in 2009. Not just did The Covenant Car Company have the daunting task of building a brand, they had to resuscitate one that had been strangled to death. And what Atty. Albert Arcilla and his extremely talented team have done with it in just three short years could rewrite the entire textbook of marketing, product planning and PR for the Philippine automotive industry. 

That’s not to say they haven’t had their challenges. There are a couple of models that still aren’t moving—hey, you can’t win ‘em all—but if you look at the Cruze, which is a very underrated car, it didn’t start off anywhere near as well as they expected. But instead of filing it away in the “we’ll-get-em-with-the-Spark-and-Orlando” file, they found a way to reposition it and came up with an impressive campaign that connected it to their target market. A few months later, the Cruze hit No. 2 in its segment.

And just to prove it wasn’t a fluke, Motor Image was able to achieve similar success when resurrecting the Subaru brand locally in 2006.

By contrast, you have another well-known, very competent Japanese compact sedan that was launched a year or two ago that may end up as a collectors item. Despite being one of the most ubiquitous cars at one point, every time I spot the current model on the road, it’s like a celebrity sighting. 

Ford is another great example. There was a time, not too long ago, when the brand was languishing on the southern side of the charts locally, with a fairly bland line-up and an almost nonexistent corporate communications department. But with a unified vision from rock star CEO, Alan Mulally, and an energized local management team with an outstanding, newly formed PR and marketing team, they have pulled up their socks and are now the fastest growing brand in the Philippines. It was a simple matter of Ford merging with Ford, and not diluting its core brand to support others like Land Rover, Volvo, Jaguar, etc. Some people call it building brand equity.

With this new approach, Ford could now throw all their resources into just one brand and come up with killer designs with fabulous standard features like the Fiesta, Explorer, Ranger, Focus, Mustang and the soon-to-be-released, Ecosport. 

Awesome, yes, but that all means squat until you communicate it. And credit where credit is due, the Ford Philippines’ team has done an exceptional job of that. 

While I cannot afford the space to credit all the brands on the run, it’s impossible to wrap up and not mention Hyundai as the other one to watch. In just ten years, they have caught up with the top dogs, Toyota and Mitsubishi, and if the Japanese are not careful, they will let them sail by. Mitsubishi is still doing incredibly well with their Montero Sport and should get a boost once the Mirage gets here, but unless Toyota steps up their marketing and communication, they could be in for a surprise.

Sadly, it’s not enough anymore to have good products, which of course Toyota has. It’s about convincing the public that you have better ones. And with a younger model line, aggressive marketing, keen (if not unbelievable at times) pricing, Hyundai has overtaken Toyota in the passenger car segment (the first time in ten years), and carved out a mind-boggling 29 percent market share to Toyota’s 24. 

This is only from the first quarter of this year, of course, but the writing is on the wall. 

Make no mistake, the Chinese will catch up. What took the Koreans 30 years to achieve, China could probably accomplish in ten. And after my recent trip, I’d say Foton are the first off the line here. Sure they started out the same as the rest, with a Blizzard pickup that could have shared a womb with an Isuzu Fuego, but as the world’s largest commercial vehicle manufacturer, they eventually shifted their focus into forging partnerships with other global leaders like Mercedes Benz, Daimler and Cummins diesel, and are now coming out with original products that don’t look like they were designed on the Draw Something app on an iPad—the newly launched Thunder pickup being a perfect example.

They are also the most active Chinese brand distributed locally when it comes to marketing and communications—all of which will be the key to market share later on. 

My point, which I’ve taken as long to get to as an MMDA officer trying to explain ‘swerving,’ is that the automotive industry is changing. The losers are going to be the ones who stand still. Some fundamentals remain, of course, but with inevitable invasion of Chinese brands looming, and the disparity between quality shrinking, manufacturers will be forced to fight a different war. 

Models will come and go, but the feelings that a great brand leaves behind won’t. And that is something that any factory has yet to figure out how to clone.