Marques of distinction

The Ferrari FXX - no one needs one and everyone wants one

Richard Kennedy considers the challenges facing today’s brand guardians, and asks if notions of luxury dreamt up last century still cut it today

Each year the Interbrand consultancy hooks up with Business Week to publish a list of the top 100 global brands and their values.

Just to put the kind of figures we’re talking about into perspective, Interbrand’s 2005 list places a value of $67,525 million on number one brand Coca-Cola.

Toyota is the only motor firm to share a top ten position with companies like Microsoft, IBM, Nokia and McDonald’s – an achievement analysts partly attribute to the Japanese brand’s current association with hybrid technology.

From the premium segment, Mercedes-Benz comes into the chart at a very credible 11, BMW at 16 and Porsche at 76. And although Mercedes slipped out of Interbrand’s top ten a couple of years back, the consultancy still places a brand value of $21,331 million on the German marque.

This kind of metric can mean great news for shareholders or nervous moments for brand managers. Yet in our hearts we know it’s only part of the story. For consumers, motoring brands are more about passion and tradition, statement and aspiration than global reach. But nothing in this market is static. So how are the premium brands positioning themselves in the 21st century?

BMW - drive integrity
When Ammirati & Puris coined ‘The ultimate driving machine’ back 1975, few would have bet BMW would still be using the same tag 30 years later. Yet like all great ad slogans this one works because it genuinely encapsulates core band values.

To the traditional driving enthusiast, a powerful, front-mounted engine and rear-wheel drive are the optimum set-up for serious driving.

BMW is devoted to this philosophy. The company consistently rejects the option of producing a front-wheel drive model on the ground that front wheels are for steering a car, back wheels for powering it and any alternative compromises its integrity. Similarly, all petrol-engined BMWs refrain from interfering with the natural progression of a powerful straight six or V8 engine by adding turbo boost – choosing to rely on thoroughbred engine technology to produce the required performance.

This commitment to purist vision is encapsulated in BMW’s E30 M3 coupé, a late 20th century classic regularly touted as the most successful touring car in the world. And 15 years on, the same core brand values are brilliantly realised in the M5 V10, an indisputably world-class luxury sports saloon.

Like many premium marques, BMW’s vision only starts to cloud when it broadens its brand until the essence begins to slip and smudge. But knowing when to stop is always a tough call. After all, precisely how many models do you produce that can be meaningfully described as ‘ultimate driving machines’? It’s a conundrum BMW constantly interrogates.

Porsche - no nonsense performance
Over the years Porsche has broadened its brand out of the garage and into everything from toasters to luggage. Yet devotees only become vocal when the marque’s motoring credentials seem under threat – as in 1996 with the appearance of a ‘budget’ Porsche Boxster (now deemed a smart move) and more recently with the Cayenne SUV (unrest drifting toward sullen calm).

Porsche 911 - a classic for 45 years.

Think Porsche and impeccable craftsmanship, a tradition of technical innovation and fathomless endurance all come to mind. The brand snapshot is of lithe, sexy and powerful cars.

Porsche is all about no-nonsense performance. People buy Porsche if they want a classic driving experience without the frills. Engineering integrity and build quality are second to none. The classic rear-engined 911 is a motoring legend and, 45 years after its introduction, it remains a definitive icon of luxury sports and supercar motoring.

In recent years this small, privately-owned company has distinguished itself as a master in the dark arts of brand evolution. Critics have been out-manoeuvred, if not quite silenced, by the market success of the Cayenne, and the new Cayman subtly moves things on a little by harnessing awesome Porsche power to super-stable, surprisingly driver-friendly delivery.

Aston Martin - confident understatement
When a motor company builds less than 900 motor cars a year, then its products are by definition very, very exclusive. And Aston Martin has always been an extremely exclusive brand. Perhaps a bit too exclusive for parent company Ford, which recently announced a 2006 production target of 5000 units for the marque, with around 3000 slots allocated to the new V8 Vantage.

Hardly a threat to the Focus, then, but a clear indication of brand positioning on the move.

A classic DB5 hitched to the Bond legend crystallised the masculine, muscular, sleek messaging historically associated with the Aston brand. More recently, the fabulous DB9 and the more accessible Vantage drew extensively on that heritage, but there have been small but important shifts that have softened the image and broadened the appeal. These are now cars for talented, discerning, well-heeled drivers regardless of gender.

Aston’s chair and CEO Ulrich Bez picked up a 2005 Luxury Briefing Award for Excellence to celebrate his company’s ‘iconic design, superb quality and sheer desirability’. This ticks most of Aston’s boxes, but misses the confident understatement that’s at the heart of this very British marque.

Jaguar - sleek power & gorgeous styling
‘There had been a period where Jaguar was trying to be something that it is not,’ maintains Bibiana Boerio, managing director of Ford-owned Jaguar. ‘We had lost something along the way. We needed to bring Jaguar back to the things it stood for – being about beautiful, fast cars.’

With its flickers of E-type styling, designer Ian Callum’s new XK coupé seems set to bring Jaguar back on message.

This brand is all about style and taste – sleek power and gorgeous styling laced with supreme poise.

Jaguar has a robust racing heritage and generations of its designers have interpreted this tradition through iconic road cars like the Jaguar E-Type and later the XK sports cars.

Is Jaguar on the point of recovering the style and class encapsulated in the E-Type?

Although, like Aston, Jaguar design is characterised by understatement and refinement, the cars themselves are often emotive buys, with a high level of brand loyalty, not least in the American market. In a 2005 survey of millionaire US consumers, New York’s Luxury Institute announced that Jaguar and Mercedes had tied for second place as motor manufacturers of ‘exclusivity and uniqueness’. Porsche held on to pole position.

In terms of product, heritage and goodwill, Boerio undoubtedly has all she needs to re-build the Jaguar brand for the 21st century. Her biggest challenge is to communicate the British marque’s brand values in markets like the US and Russia with a marketing spend that’s a fraction that of, say, BMW or Lexus.

Mercedes-Benz - re-establishing the marque’s image
There’s no question that in terms of brand values Mercedes-Benz is still near the top of its game. As we’ve seen, among premium auto brands the German marque still claims highest position in the annual Interbrand assessment.

Ironically, the company itself seems more aware than its customers of the medium term consequences of recent European recalls and quality concerns.

For example, in the 2005 Luxury Institute survey Mercedes edged out Porsche as ‘the brand that delivers consistently superior quality’. By contrast, at the 2005 Frankfurt motor show Chrysler Group CEO Dieter Zetsche made a point of emphasising that the launch of the new Mercedes S-Class would re-establish the marque’s image as a leader in innovation and reliability.

Mercedes-McLaren SLR - a $500,000 supercar that exemplifies the marque's style and heritage.

As with BMW, Mercedes enthusiasts point to the broadening of the brand as the root of all recent evil. But of course it’s also the strategy that helps account for the company’s leading position on the Interbrand list.

Among consumers, Mercedes is still regarded as one of the definitive status symbols of contemporary motoring and its top-end luxury models are as competitive and technologically advanced as any of its rivals.

The Mercedes legend is exemplified by the gorgeous 1950s 300 Gullwing, a stunning 150mph-plus performance car that merits a place on any discerning list of all-time greats. And for anyone that doubts the dream’s still alive and kicking, step up to the new Mercedes-McLaren SLR, a $500,000 limited edition supercar that slips 0-60mph in 4.5 seconds and oozes Mercedes DNA from every pore.

Audi - exceptional build quality
Progress through technology is certainly how they got here, but Audi may finally have outgrown that vorsprung durch technik schtick.

Yet it’s easy to see why it’s served them so well. When Audi do new things they do them very well indeed, often leading the field in technological innovation. For example, they were among the first to successfully utilise aluminium body shells for their flagship A8 saloons. They also led the way with four-wheel drive technology – the original Audi Quattro coupés of the late 1970s and early 1980s are still regarded as classics of their kind.

These days Audi innovation is taken as given. The brand’s contemporary appeal is now about truly exceptional build quality, sturdiness, reliability and an increasing emphasis on status. And this shift from business and professional to premium is the sign of another marque on the move. The strategy is manifest in the new Audi RS6, a quite astonishing state-of-the-art take on 4x4 technology that comes on with more pace and attitude than many exotic supercars.

Lexus - looking for new markets
And speaking of brand image on the move, consider the case of Lexus…
Until very recently, it’s fair to say Lexus barely registered on the radar of premium car buyers in Europe and Asia. Most could tell you Toyota’s luxury brand does all right in America. But many outside the US would be extremely surprised to discover Lexus is now market leader in America’s luxury sector.

Talk brand associations and most consumers will lead with Toyota’s legendary reliability. But talk to any motoring professional and they’ll tell you a Lexus is also quite astonishing value for money.

The challenge facing Lexus outside the US is that it is perceived as a brand without a soul. This is primarily because Toyota has spent over 15 years moulding Lexus product into a quintessential American vision of luxury motoring. Reliable, feature-packed, value for money and a tad vanilla.

But having consolidated its position in the US, Toyota is certainly mindful of the dangers of single-market advantage and looking for new worlds to conquer. Recent offerings like the new GS430 emphatically emphasise performance over traditional Lexus virtues, while the 500hp LF-A concept sports car is an intriguing statement about where this brand wants to go.

The LF-A concept car - new markets for Lexus?

According to Jim Press, Toyota executive vice president and COO, the LF-A ‘is a realistic vision of how we might address the boundaries that define the exotic sports car landscape’. Whether it’s built or not, it also points to how Toyota intends sweeping aside the boundaries that constrain the Lexus brand in global markets.

Bentley - building on heritage
It seems a lifetime ago when Bentley and Rolls-Royce were invariably mentioned in the same breath. Of course Bentley was always the edgier brand – a tribute to its distinguished racing heritage and association with rakish, wealthy owners who preferred to drive rather than be driven.

For decades, this fine British marque re-nowned for quality, tradition and craftsmanship languished in limbo. Like an old master dumped in an attic, its lustre had faded and its reputation was disappearing into history. Enter the sensitive restorer…

Volkswagen’s turnaround of Bentley is positively Hollywood. Serious investment coupled with genuine commitment to core values has resulted in one of the most convincing brand rebuilds in recent history.

The premium market Arnage T is vintage Bentley – a hi-tech, absurdly high performance expression of luxury motoring tradition. But a few steps down the food chain, it’s the keenly priced Continental GT that’s emerged as one of the shrewdest loss leaders on the block. If you want to tell the world you’re back, make sure the messenger is classy, fast, beautiful and just about affordable.

Rolls-Royce - back in the driving seat?
It’s a message Rolls-Royce seems to have taken on board.

‘Strive for perfection in everything you do,’ said Henry Royce. ‘Take the best that exists and make it better.’

While inheriting only the Spirit of Ecstasy and the signature grille, new owners BMW have managed to exceed expectations of the marque. The Rolls USP remains bespoke, unique and exclusive, but its stunning new Phantom surprised many by convincing owners into the driving seat.

Yet it seems only a matter of time before Rolls-Royce follows Bentley’s lead and produces something for the burgeoning $150,000 market. ‘I believe Rolls-Royce has an opportunity to move into another price point,’ says new Rolls boss Ian Robertson. ‘Our family of cars must grow to include more attainable models.’


The Italian uberbrands
So why leave Ferrari and Maserati until the end of our story? Well, mostly because neither hangs together in conventional marketing terms. Totally impractical, ridiculously expensive, like fine couture these Italian icons only make sense in terms of raw emotion and the lust for ownership.

Modern marques mean narrow brands, strong traditions and the imaginative application of cutting edge technology.

The Ferrari and Maserati legends are made manifest in peerless Italian design and a heritage of technical superiority. The mechanics are honed and showcased on the F1 track, but their brand values are indistinguishable from the passions and obsessions of owners past and present.

No one needs a Ferrari and everyone wants one. Now that’s the pinnacle of marketing genius and one of the very few things in this industry that can be confidently taken for granted.

New brand culture
To fully understand consumer perceptions of premium marques we need to take account of the complex relationship between those with money and those who want to appear to have money.

Which is why the New Russia springs so readily to mind.

The Moscow-based Mercury Group represents some of the world’s most exclusive luxury goods brands in Russia, including Armani, Breitling, Chopard, Fabergé and Tiffany. In a recent interview with the Moscow Times, Ilya Berezin, head of Mercury Group’s auto division, maintained that since the 1990s the first thing Russians do when they come into money is to buy a luxury car.

For Berezin’s clients, though, a premium marque is not just a glamorous appendage to a successful life – it can also be about the dream of a more glamorous future. ‘You could live in an old Khrushchev-type apartment and own one jacket and one suit,’ explains Berezin. ‘But the nice car – and in the 1990s it was Mercedes-Benz – was a must if you wanted to be recognised as a successful businessman.’

In a world of rapidly shifting aesthetics, value systems and demographics, it’s tough for any premium marque to keep ahead of the game. Recent history suggests narrow brands, strong traditions and the imaginative application of cutting-edge technology all help.

But maybe at the heart of the matter it all comes back to the power of dreams. In the words of Cadillac general manager Mark LaNeve, ‘I want high school kids to dream of owning a Cadillac. I don’t want to produce a car they can actually buy.'

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