The Volkswagen-Nokia conjecture should scare every single automaker
Herbert Diess, VW’s CEO, has recently used the Finnish company’s demise as a cautionary tale to highlight the need to shake up the automotive industry’s modus operandi
People change. Their necessities change, their aspirations change, their conceptions change… as a result, the societies they form can become entirely different in a matter of few years. If a company aims to cater to those societies in some ways, such as selling products to them, ignoring all that would make it simply impossible for that company to effectively reach its goal or let alone grow by doing it. Companies need to change as well in many ways and rather frequently because that’s literally a matter of survival to them.
Nevertheless, this rule has exceptions important enough not to be overlooked. The consumer group of every market segment has a significant part of conservative members who praise the outgoing mindset either by having lived in it and missing it or simply by disliking the newer, say, way of life. Since we’re talking about catering to customers, these ones must be acknowledged just as any others. One could say this contrast is what has shaped many decisions and actions performed in the car world in the past few years.
What does that have to do with Nokia?
Back when our mobile phones weren’t “smart”, their market had been ruled by Nokia for a long time. While it offered a huge variety of models, even grouped in lines with several secondary purposes, many of them differed mostly in design. The maker’s dominance made it neglect some of the latest trends or invest less than it should to offer them. Android phones and, mainly, the iPhone came with such a different concept that they managed to overthrow Nokia faster than anyone could ever believe.
In short, the Finnish maker became a cautionary tale because it relied on the outdated strategy of imposing what people could buy simply because it was a very strong brand. Even huge companies such as Coca-Cola or Mc Donald’s do that only partially: staple products like the Coke or the Big Mac are clearly showed as one option from a list which keeps increasing in order to fulfill people’s most recent desires. Companies can always adapt here and there, but they ultimately have to give what people want.
And how does that translate to cars?
Cars have become a huge part of people’s lives regardless of whether they drive one. As a result, products, manufacturers and sellers must adapt to society’s changes if they want cars to remain relevant to it. That means rethinking several aspects of which we’re not even used to discuss. Analyzing them separately, like it’s done below, is one of the best attempts at understanding how the relationship between cars and people has been changing and how to make the best use of it for everyone.
- Advertising: while auto shows are glamorous and attract a lot of attention, it’s increasingly expensive to participate in them and that attention is always divided with many other companies. That’s why they’re being ditched in favor of smaller events for the automaker’s whole lineup or even to introduce a single new model;
- Concept: The rise of crossovers should be seen as a warning: people are no longer limited by the existing body styles. Cars will be designed more and more with focus on life styles so, if that requires something entirely different from hatchbacks, minivans and sedans, automakers will be more and more inclined towards investing in making that “ideal” car come true;
- Manufacture: After thirty years since global cars were first executed, it’s safe to say this industry has learned how much to globalize or regionalize each car model. Therefore, the tendency is that every aspect of the model will be developed with that consideration from the beginning. That means it’ll be easier to adapt it to all countries where it’s supposed to prosper.
- Ownership: There has always been people who can’t afford buying and/or maintaining a car. The thing is, in nowadays there are many people who choose not to have a car. Taxis and car-sharing apps have become an interesting option for being cheaper and much more practical — wouldn’t it great to stop worrying about parking or drinking?
- Propulsion: Electric motors are getting more and more space, especially among mainstream models. This means there’ll be less engine noise on the streets, charging stations will be more common, and maintenance will be executed in a very different way. It’s likely that internal combustion engines will survive only in sports cars because of their emotional appeal.
Huge changes, huh?
Pretty much paradigm shifts. The relationships people establish with cars have been changing. Of all automakers, Volkswagen is an interesting example because it has already faced this type of situation in the 1970s, when it caved to the advantages of water-cooled engines after trying to extend the Beetle’s success to a whole family of air-cooled models which ended up with discreet sales performance. Now, the Germans are developing the I.D. family with fully electric powertrain.
Even the most traditional companies will end up compelled to adapt simply because they’ll have to attract new customers someday. Factors such as high fuel consumption and lack of everyday practicality will become increasingly annoying, especially when the potential buyer compares the model they’re considering and realizes those problems are much smaller in the model’s direct competitors. Society’s changes will exert more and more pressure on the industry to keep changing.
Speaking of society, how can it benefit from all that?
By making itself heard even more. Buyers can only have a chance of getting what they truly want if they truly speak up, whether through social media or simply not buying car models they consider substandard. They must keep in mind that the industry is supposed to adapt to their needs and wishes, not the other way around. If you truly enjoy gas-guzzling sports cars, how would you persuade automakers to keep offering them if you buy a hybrid crossover?
Other than that, there’s a piece of advice which should be taken for life as a whole: people should embrace who they are and what they want. There are countless types of culture, family, personality, and life style and such variety must never be overlooked. Automobiles have only become highly profitable because they’ve become such an important part of modern life. If the industry wants to keep the situation like that, it should do whatever it takes to keep cars truly attractive to people.
