Labels

Thursday, 11 September 2014

Brand Dilution: How Far is Too Far?

A four-wheel-drive hatchback made by Ferrari, yesterday
After another bitterly disappointing showing at the Italian Grand Prix last weekend, which saw Fernando Alonso retire with an electronics failure and Kimi Räikkönen scrape a 9th place finish, Ferrari have extended their massive internal overhaul to the very top, with long-time president Luca Cordero di Montezemolo being kindly asked to resign after 23 years of generating huge growth and success for the legendary Italian company both on the roads and, for most of the 2000s, on the circuit. Taking his place will be the boss of the FIAT-Chrysler Group that owns them, Sergio Marchionne, who has already made clear that he has a very different philosophy to Montezemolo, who capped production at 7000 cars a year to preserve the brand's exclusivity and overall special-ness and calls this change "the end of an era". Under Marchionne's rule, FIAT has designed the most disgusting Italian car for a generation, the 500L (yes, worse than the 1998 Multipla). So, with him in charge of what's arguably the automotive world's Disney, what threatens to be in store for Ferrari over the next few years? As well as that, how much of what will most likely be a dilution of the brand be truly justifiable? Is there a limit, or, in this current age of mass automotive sacrilege, does anything go these days?

Luca Cordero di Montezemolo, a man whose name is almost comically Italian.
Perfect for Ferrari, then.
Let's stick with Ferrari for now. When Montezemolo ascended from just running Scuderia Ferrari to lead the whole organisation in 1991 (three years after the passing of eponymous founder Enzo), they were making the 348, a supercar so underwhelming that it was promptly shown up by a V6 Honda. Their F1 team - which he'd run since 1974 - was also going through the victory drought of its life while McLaren-Honda strolled merrily off into the distance (well, sometimes about as merrily as Mercedes GP are this year). For Scuderia Ferrari, if it's not victory then it's not acceptable, simple as that. Luca oversaw the replacement of the 348 with the F355, one of the prettiest and best-driving road cars of all time, and also the first car to feature an "F1 style" paddleshift gearbox, while it's 3.5L V8 had five valves per cylinder, a first for Ferrari. It marked the start of a major turnaround for the road car division, which has hardly put a foot wrong since (we'll ignore the 2008 California and continue to debate about the F50), with its current range - California Turbo, 458, FF, F12-Berlinetta and LaFerrari - being the strongest of any supercar manufacturer at present. Yet despite this growth, a production limit has crucially kept the brand special and desirable. In a world of mass-market Porsches and BMW Motorsport SUVs, a Ferrari is still a dream car. Even the California T for some. During Luca's tenure at the top, the Scuderia won six F1 Constructor's Championships in a row from 1999-2005 - with Michael Schumacher winning five driver's titles from '00-05 - and two more in 2007 and '08 with Kimi Räikkönen's driver's title and Felipe Massa's painfully-almost-title occurring respectively in those years, while in the road car division, sales tripled until production was capped and revenues went up to about 1000% of the '91 figures.

Meanwhile, the mainstays in the range, the mid-engined junior supercar and the big sports GT cars, have been kept pure while still pushing performance car technology forwards. Along with Lamborghini and Aston Martin, Ferrari are one of the last bastions of the naturally-aspirated V12 engine, while everyone else goes for smaller turbocharged engines and increasingly hybrid power. Only very recently have they had to give in under increasing pressure to the new ways of performance, and even then only on the newer additions to the range so far. The California is the least Ferrari-ish model and more of a cruiser, so it makes sense to finally give in to smaller turbo engines with that car, while LaFerrari uses its F1-style "HY-KERS" electric boost like an instant supercharger rather than any kind of eco gadget, with no EV-only mode, unlike the P1 and 918. The closest they ever got to sullying their name with an SUV or any kind of "Family Ferrari" was the sometimes-four-wheel-drive Ferrari Four, which ultimately is still a V12 shooting brake with four seats, not some daft over-engined crossover like a Cayenne Turbo S or X6-M. At a time when brand values are slipping across the world, Ferrari have stuck to theirs and made it work for them. Granted, they can sometimes have a snotty and pretentious attitude that puts many off (some might joke that they're just being very Italian), but underneath it, their traditionalist stance is an admirable one. Or at least, it has been...

Maserati Kubang Concept, previewing the 2015 Levante sports crossover
At the moment, Ferrari is mostly independent of the rest of FIAT-Chrysler in its operations, despite the Italian-American giant owning 90% of the company. The only real contribution to the rest of the group is to develop engines for Maserati, which includes the new turbocharged V6 and V8 engines in the new Ghibli and Quattroporte sports saloons (that's where the Cali T's engine came from). Once Sergio Marchionne takes charge in mid-October, this will change. The 458's replacement is already due to get a hotted-up version of this turbo V8, but the plan is for Ferrari to become more involved with the other brands (Maserati, Alfa Romeo, Lancia, FIAT, Chrysler) in terms of technologies and the products themselves. That's a touch vague, and could mean anything from developing more engines to sharing whole platforms with Maserati and maybe even Alfa Romeo. What if the next V12 GT also underpins the next Dodge Viper? Scarier still, what if it's the other way around? Would you buy an F12 Berlinetta if it was made of Detroit iron? Would it still carry the same prestige? Not really. There is so much potential for this either to grow the company further or just as much screw it up for the next ten years. What if Ferrari goes full-Porsche and adds two saloons and two SUVs to its range? Actually that seems a little unlikely, as it would completely cannibalise Maserati and put them in serious risk of fading away completely, or more embarrassingly clinging on to a life support system like the once-magnificent Lancia currently is. Marchionne is trying to compete with the towering Volkswagen Automotive Group (VAG), which means keeping brands alive. Turning every Maserati into a Ferrari would negate the point of Maserati existing, because why have silver when there's gold on offer for just a little bit more?

Mind you, he doesn't seem to care about Lancia, or more accurately Chryslancia, who have a range made entirely of second-hand designs, and platforms with different noses and/or badges attached. The Ypsilon is a 5-door 500. The Thema and Voyager are 99% Chrysler. The once-majestic Delta is now just an uglier Fiat Bravo. Meanwhile, Alfa Romeo must have gone through about five or six "comeback plans" in the last few years, and the only thing to come out of it is the 4C sports car, which admittedly is the best part anyway. As Mazda unveils their new MX-5 (blog post inbound), where is Alfa's version? We haven't even had a teaser for the new Spider we were promised. And how many more times will they delay the Giulia, Italy's answer to the BMW 3-Series? All we have are two bug-eyed hatchbacks - the smaller of which is a re-dressed Fiat Grande Punto - and a low-volume, low-profit sports car. Meanwhile, Maserati (who builds the Alfa 4C) may well have had a sales boost by the China-friendly Quattrporte VI and the new Ghibli with its Europe-friendly optional diesel engine, but they remain a minor player. Remember, the man that oversaw all these brands becoming a bit of a shambles is now about to run Ferrari, one of few car brands left with an almost-heavenly aura about it (but one which Montezemolo has come out criticising as "becoming too American" upon leaving it behind). If we see Ferraris built on second-hand platforms and on sale lower down in the automotive food chain, that aura will surely fade before too long......


The Argument FOR Brand Dilution

On the right, a Mini. On the left a, er... Mini???
And yes, they are parked directly facing each other. There is no perspective trickery going on here...
But let's be honest here, there is a reason for it. In our hopelessly consumerist culture, big brands rule the Earth. Big and famous names draw people in. Five years ago, did you want a mere phone, or did you want an iPhone? Tomorrow, will you fancy proper coffee or Starbucks/Costa? Boom. The most successful brands aren't the ones that have strong values, they're the ones with strong marketing and presence. Take Mini - or as BMW insist on printing it, MINI. The 21st century MINI has only ever paid lip service to the original Mini, stealing its image and doing whatever possible to the suspension to extract the words "go-kart handling" from motoring journalists, just like the old Coopers did by, well, being a bit like go-karts. By carrying over the superficial, image-based elements of the original car, they successfully made a fashion item with a premium price tag that people went mad for. An Apple iCar could only hope to cause such a stir. The 2001-'08 MINI was a big success despite being cramped inside (the makers of the original car would be deeply perturbed) and somewhat unreliable, because it had enough of a likeness to the original to inspire nostalgia and to this day has an extremely strong image as a fun and trendy premium small car. Trendy premium things are hot property at the moment.

So once they had diluted the Mini brand from "iconic, fun, affordable, classless people's car for the masses" to "trendy, fun and premium," they decided to expand the brand outwards from there. This lead to variants of the hatchback of course - the usual estate and convertible - but from then on it all seemed to go to their heads a bit and things have gone a bit weird and inexplicable. There was a two-seat Roadster that looked like a cubed Audi TT, a hideous two-seat hatchback "Coupé" that looked like the standard car's roof had melted and they'd just run with it, and that estate version (or "Clubman") was missing a door on one side and had two doors on the back. But the biggest point of controversy is the Countryman crossover, pictured above as it stares down at the real deal. This slab of motoring obesity is an affront to the very definition of the word 'Mini,' let alone the brand's original 20th century values. But, nevertheless, it's a MINI with more space, making it salable to a wider range of people, meaning that if you wanted a MINI but recently had a child or have to carry skis and dogs everywhere or don't want to look like you can only afford a small car*, you could now buy into the brand anyway. Sure enough, it's worked. You see them around just as often as the normal MINI Hatch. So then they made a sporty three-door version called the Paceman - a sort of poor man's Range Rover Evoque - and, er, actually I haven't seen one in the wild yet. Maybe (thankfully) that one didn't work...

*not that the new-age MINI was ever cheap. A top-shelf Cooper S will set you back £18,655 before you add the expensive options, after which you're looking at £25k easily. You could buy a bigger, faster Ford Focus ST for slightly less. Or a Golf GTI. Or a Fiesta ST Mountune and a new kitchen......

BMW didn't limit their mild lunacy to MINI, of course. The X6 was brought into the world in 2008/9 and somehow it still exists. How?! It's hideous and utterly pointless. But it's unlike any other SUV and engineered (as) properly (as possible) by BMW, so it still functions well enough as a car for the people who fell for it to not hate it. So now there's an updated version and a smaller "X4" that's even more infuriatingly oxymoronic, for people dumb enough to want an X6 who don't have enough money...

Whatever. My point is that diluting a brand makes it easier to expand, thus increasing profitability. And ultimately, car companies have to listen to what their sales books are telling them, not what the internet is screaming at them. For every alert person they piss off, there are probably two or three inattentive people that get suckered into paying for one of their new products. The same is true at Apple where they often introduce features that already exist, but with a different name so average people who didn't know it existed think it's new and revolutionary. I once overheard someone arguing in a Café who was adamant that an iPad isn't a tablet, but an invention all of its own. What, because it has different software and a catchy name? Dear oh dear...

Porsche's current range, excluding the limited-run 918 Spyder hypercar.
Macan - Cayenne - 911 Carrera - Cayman - Boxster - Panamera
For some car manufacturers, there are more reasons to stretch one's values than just profiteering. Let's stick with the Germans and look at Porsche, one of the prestigious sports car brands that has gone all-out with this strategy, and possibly the template that Marchionne's Ferrari might follow. Here is a brand that, from 1948 to the 2000s, centred its existence around sports cars and motor racing. Oh sure, there were tractors beforehand, and latterly military vehicles and bike engines and so on, but they were just side projects (see those and more in this Porsche Museum walkaround post I did). The proper production Porsches were all sports cars, with the occasional GT thrown in for good measure, while the racing team was previously to Le Mans what Ferrari is to Formula 1, with a record sixteen victories at the ultimate endurance race from 1970 to 1998. The venerable 911 has been the luxury sports car benchmark for five decades, and the Boxster/Cayman twins are also setting the standard in the smaller-sized class below, Yet, to a newcomer's eye, they'd appear to primarily be makers of premium luxury cars who also do sports cars. The Cayenne has been far and away outselling the 911, followed by the Panamera, and this year the smaller Macan crossover is on a path to potentially outstrip both of those to become the majority seller in the range. Meanwhile the Cayman - arguably the sweetest sports car they've ever made and the pick of the range for keen drivers - is their slowest seller.

"Well what's the point then?! Why don't they just knock down their Zuffenhausen factory and concentrate on the five-door cars coming out of Leipzig instead?!" you blurt out in a huff. Not so fast, hothead. Sports cars cost a lot of money to develop, especially to the level of a Porsche. While previously the 911 and then the Boxster saved Porsche from certain death, it's now the turn of the shared-platform crossovers and long-awaited super-saloon to pay the bills, and they are doing. They really are doing. Hell, they're probably paying for the epic 918 hybrid hypercar, from gorgeous body to screaming engine to electric drive system. With the bread-and-butter cars pulling in the Euros, Porsche have more money with which to fund their evergreen 911 and much-adored mid-engined sportsters. The current Cayman S (981c) is hailed by every car magazine that goes near it as the best all-round sports car on sale and possibly ever. The new GT3 - spare me the pipe-smoking lecture about it not having a manual gearbox - is the most agile and frantically fast 911 ever, with such technologies as active rear-steer, like an old Honda Prelude. Ooh! Paid for by the Panamera? Perhaps. So, despite diluting the brand with SUVs and an executive sports saloon (well, it's technically a hatchback, but work with me here), and even adding diesel and hybrid versions of each, Porsche have been able to roll the resultant profits into a stunning new flagship model and continue to hone and improve the cars on which they made their name: the sports cars.

While the naysayers predicted doom for the 911 and Boxster, they're actually being kept alive and made better by that sacrilegious Cayenne and its Macan sibling. Those re-bodied and re-calibrated Volkswagens are a blessing in ungainly disguise, provided the sports cars continue living. If Ferrari pick their market segments right and don't do anything too offensive, maybe some higher-volume cars will fund the next "Special Series car" to replace LaFerrari, and maybe it will be even more incredibly fantastamazeballs. Maybe...


The Argument AGAINST Brand Dilution

Fourteen attempts to make the same car... and that's not even all of them...
But those naysayers who hate changes in philosophy and wish the evolution of the car had halted in 1999 or 2006 or 1974 or whenever do have something of a point, and it's one I've made on this blog before when failing to tolerate MINIs or the prestige SUVs that are coming from Lamborghini and Bentley and Land Rover's sister company Jaguar (because at this point in history why the fuck not have an off-road car maker twinned with an on-road car maker where the latter makes a direct rival to the former?...). Because, you see, in an industry as fiercely competitive as the automotive sector, there is a lot of bandwagon-ing going on. A LOT. Pictured above are a selection of small crossovers, from the following brands:

Chevrolet
Ford
Honda
Hyundai [a brand twinned with Kia]
Kia [a brand twinned with Hyundai]
Land Rover
Mazda
Mitsubishi
Peugeot
Ssangyong
Subaru
Suzuki
Toyota
Volkswagen

But they aren't the only ones making crossovers - many of which only have the illusion of off-road ability or added safety or even four-wheel-drive - that are barely bigger than a Ford Focus Estate or Mondeo but use more fuel and look sillier. Into this mix you can also add:

Audi
BMW
Citroën
Dacia
Infiniti [Nissan's premium brand]
Mercedes-Benz [twice in left-hand-drive markets]
MINI
Nissan [twice under their own brand alone]
Range Rover (the Evoque kinda counts)
Renault
Škoda
Vauxhall/Opel
Volvo

So if you're European and in the market for something small but tall, you have twenty six places to look. Except you don't, because FIAT are about to release a "500X" crossover, so that's actually twenty seven. And I'm probably missing one.

But it's not just the overwhelming choice that's on offer, it's the variety of brands that have hopped on the crossover bandwagon, even when it flies in the face of what they're meant to stand for. There are probably one or two you've never heard of, along with some you'd expect to be there, like Subaru and Land Rover. But then there are prestigious luxury brands like the Three Big Germans. What business do they have making cars like this?! And Mazda! Mazdas are supposed to be light and agile and fun! I've already mentioned the MINI MAXI. What's more, if Alfa Romeo ever get their shit together, they'll be doing one (which probably means that Lancia will be saddled with one too). That's another big hit for the purists. Further up the scale, Lamborghini, Bentley, Jaguar and potentially even Rolls-Royce are going to do full-size SUVs, along with the aforementioned Maserati Levante. Where does it end?! Bugatti? Ferrari...?

As I mentioned up top, this is the era of mass automotive sacrilege. Everyone's just throwing their beliefs in the bin and building whatever sells, which ultimately appears to be leading us - very quickly - to a time in the mainstream car market when everyone makes everything. What's the point of that? Is it really better for car fans to live in a world where you can only tell brands apart from their lights and grilles, with no particular USP beyond badges and gimmicks? Won't people just pick one and stick with it regardless, or just buy from their nearest dealer in that situation? Are large conglomerates like VAG and FIAT-Chrysler and Nissan-Renault so desperate that they'll risk competing with themselves for profit? How can people stand out when they're all aiming at the same things? If everyone just copies each other, where's the creativity? Will BMW switch to V6 engines instead of the classically correct inline-six purely because it makes more fiscal sense? They've already unveiled a front-wheel-drive car to rival the Honda Jazz, of all things (seriously, search "BMW 2 Active Tourer" if you don't believe me). With no values, you have no point of interest, just a marketing campaign that stretches into the design studios. Car companies SHOULD stick to their corner. They NEED to have their own philosophies. FIAT really has to STOP building the hideous and brand-defying 500L. They MUST keep alive what gave them life in the first place, otherwise it will generate apathy among fans and enthusiasts. And that would be the worst. Eventually you'll choose which brand to like based on who has the coolest history, not who currently makes the coolest cars, because there'll be nothing much to choose between each range. The whole car market will be one huge, dreary, homogenised blur...

It'll be a bit like the start of that Toyota GT86 ad. Don't remember it? Here:


I just hope the above prediction gets proven wrong so that the major automotive industry stays at least a little bit exciting...

So Where's The Line?

Porsche 911 Carrera RS 2.7 vs Porsche 911 Sport Classic (997)
Really then, a car company worth its salt should be balancing the above two points. They should keep an eye on where the car market is going, but they shouldn't let us forget where they came from, and more importantly shouldn't forget themselves. Porsche should always make the 911. Land Rover should always have a primarily-utilitarian car in their range like the Defender. Lotus should until the day they die build at least one car that weighs less than 1000kg. MINI should really be making a smaller car with more space inside, because it really can be done and they're not bothering and that makes me sad. If car companies stand for something then they should make it work in the modern environment instead of forsaking it entirely, because more often than not, it can be done. Mazda are using their "Skyactive" philosophy of efficiency through light weight to give us bigger non-turbo engines with the same fuel economy as the litany of small turbo engines. But their handsome new cars are zippy and revvy and more fun than many rivals to drive. Good on them. Subaru continue to use Boxer engines even though an inline engine makes more sense really. Keep boxing! With the C4 Cactus, Citroën have started being a bit weird again. Long may it continue... and bring back floaty suspension! And hey, Mazda, while you're at it, find a way to make the rotary engine make sense again.

So, where would I take Ferrari?

Well, if the range of cars really did need to expand - which I would try to avoid in the first instance - then I would take the 4C, lengthen the rear end and leather up the interior, before adding a V6 engine. The single-turbo 3.0 V6 from the base-model Maserati Ghibli would do. Boost the 325bhp to 350bhp. The carbon chassis and plastic composite body of the 4C would keep it light, while the exterior would obviously be redesigned to look more like a Ferrari. The suspension would be redeveloped, probably the most expensive bit. Brakes from the 458 would probably work fine. The weight would likely rise from the 4C's 895kg as a result, but still, at 950kg or even 1000kg, that engine is going to be plenty punchy enough, with room for a hotter model later. Tie all these parts together properly and have I just made? The Ferrari Dino 306T. Ferrari's answer to the Porsche Cayman GTS, or maybe McLaren's upcoming "500S" junior car. How cool would that be?! It could also be spun off into a new Lancia Stratos, because platform sharing needn't be tedious. A manual gearbox could be offered initially, but only if the demand is there will it stay, because we have to be real here...

The FF would be replaced with something similar, because ballistic shooting brakes are cool as hell and you know it. I'd keep the V12 alive for as long as possible, and the FF's added all-weather traction ought to stay, to differentiate it enough from the two-seat two-wheel-drive F12, and also to have something close enough to an SUV/crossover without going all the way. That's Maserati's job, along with the sports saloons. Let them have their space (the Ghibli could underpin a bigger version of the Alfa Romeo Giulia, to take on the 5-Series/A6/E-Class).

Ferrari has long been about putting Formula 1 technology on the road, so a KERS boost à la LaFerrari might feature on the F12's replacement, with no all-electric mode. Cylinder deactivation on all future engines would take the edge off average CO2 emissions. Lamborghini already do it on the Aventador, along with Stop/Start. I think Lancia - formerly technological innovators - can do the BMW i3/i8 rivals if those cars prove successful, along with any Tesla rivals or other EVs (oh, and the Delta would be brought back from the mire to be a Subaru WRX rival! But that's another rant). I think as well that Ferrari should follow Pagani's example gearbox-wise: I'm not going to pretend that the manual gearbox will return to the V12 GT cars - the rest of the car is too immediate for it to really gel anymore - but the Pagani Huayra's paddleshift gearbox has a gear stick on it, so you can either leave it in auto or move it across into sequential semi-manual mode, where you pull it back to shift up and push it away to shift down, like you're driving a rally car or an FIA GT racing car. Not only would it make the more purist drivers feel considered and perhaps feel a little more involved in the process of driving, but it would bring back those gorgeous bare-metal shift gates that used to characterise Ferrari interiors. Maybe have another path to follow for Reverse so there's more of an 'H' to the H-pattern. That Pagani's looks like a '4.' The mechanism beneath doesn't have to be fully exposed like the Huayra's but it would just make the interior a little more special. So that would be on the F12's replacement, along with a KERS boost, Stop/Start and cylinder deactivation, to try keeping the V12 alive while cutting CO2 at the same time.

Ferrari has been quite traditionalist about aluminium up until this point, but it's time to bring out the old "F1-style" mantra and have more carbon fibre chassis (especially with one of the "lesser" brands already doing it). The 458 replacement - or maybe the one after - would have a carbon tub and maybe carbon lids and doors, and the big GTs would follow suit. Lightness is rightness. It improves everything from track performance to fuel economy. Embrace the black magic of carbon fibre. No matter what happened, Ferrari would always make a mid-engined supercar and a big sports GT. Together they are their equivalent of Porsche's 911 in terms of importance to the brand. If something more conventional had to bankroll them -and if for some reason it couldn't be done via Maserati or Lancia, then so be it. It works for Porsche.

Basically, I would try to embrace everything that's good about Ferrari and find the right ways to keep those things alive, even if it meant spreading the costs across the other brands and letting them in on it. I would leave Chrysler out of Ferrari completely, and anyone that wouldn't is wrong and bad. Finally, production would still be capped, albeit at a slightly higher number if necessary, because there is one thing - above all others - that Ferrari should always be, regardless of brand expansion or anything else: Special.

Let's see what Marchionne will do...

No comments:

Post a Comment