BRANDING

Acura Mulls a Full All-Wheel Drive Strategy

October 15, 2014 by admin 3 Comments

Honda’s premium brand looks to the future.

Acura NSX — The NSX is the first performance Acura in a decade.

When you think of premium and luxury cars, brands such as Audi, BMW, Cadillac, Mercedes-Benz, Infiniti and Lexus may come to mind. Acura is up there too, but its models are more often compared with Buick, Lincoln and Hyundai. Its not that Acura lacks product — what it lacks is excitement and any sort of edge that might entice customers to consider the brand.

Acura All-Wheel Drive

Acura excitement is on the way and will appear in 2016 when the NSX returns, a model sold as a Honda in some markets. The newest NSX will be built in Marysville, Ohio, and will offer standard all-wheel drive and be augmented by an electric motor. Its a model that parent Honda hopes will begin a much-needed transformation for the staid Acura brand.

The NSX alone won’t do that, however. What may make a difference for Acura is to offer all-wheel drive only vehicles, something it now offers only on half its product line. The rest of the line is front-wheel drive, something luxury buyers typically avoid.

Will #Acura switch to all-wheel drive only & enjoy the same level of success as #Subaru?(Click to Tweet)

Eyeing Subaru

Word that Acura might make the shift was reported by Automotive News on Tuesday and picked up by other outlets. Its a move that Acura has been studying, particularly as observed in the success another Japanese manufacturer, Subaru, has had in elevating its own brand.

In the 1990s, Subaru switched to an all-wheel drive-only format and has benefited from that move tremendously, particularly over the past six years. The company does sell one rear-wheel drive model, the BRZ, a newer product resulting from its partnership with Toyota.

About all-wheel drive Koichi Fukuo, Acura’s top global executive told Automotive News, “I think that’s the way we should go.” The move would coincide with the release of Acura’s next generation all-wheel drive technology, but the process could take several years to complete as the company overhauled its entire product line over the past three years.

Performance Considerations

Acura is also considering more powerful engines to help stoke sales. The company won’t match BMW and Mercedes-Benz by offering V-8 and larger engines nor would they move to rear-wheel drive. Audi has also had much success with its all-wheel drive models with 90 percent of its sales AWD — the rest are composed of front-wheel drive models.

The advantage of all-wheel drive means that so equipped Acuras would benefit from improved acceleration, stability and offer better handling. All-wheel drive is desired as it systematically offsets torque understeer — what causes a car to pull to one side when full engine power is delivered. It is an uncomfortable and even an unnerving feeling, one that prompts ardent luxury car buyers to look elsewhere for superior handling.

Acura NSX Returns

Acura has been working diligently on changing the brand’s direction and may be ready to present the all-new NSX at the North American International Auto Show in Detroit this Jan. When the NSX does arrive it will be the first performance model from Acura in a decade. It will also offer a glaring contrast to what Acura currently sells: three restrained sedans and a pair of crossover utility vehicles.

Photos courtesy of American Honda Motor Co., Inc.

Branding: What’s In a Model Name?

September 30, 2014 by admin Leave a Comment

Last week, GM announced the name for its long-expected, ultra-luxurious Cadillac sedan. Originally code-named LTS (or Omega), the new model will be called the CT6 when it goes on sale in late 2015. That model name may seem out of place considering the brand’s current three-letter naming convention, but it also points to where Cadillac’s nomenclature is now heading.

In other words, every Cadillac model will eventually sport an alphanumeric naming convention that begins with “CT” and ends in a number. Changes to the brand’s current model names such as ATS, CTS and XTS won’t take place until refreshed or new versions of each vehicle are released. So, for the next few years Cadillac will employ a transitional naming convention, composed of old and new names.

Cadillac Escalade — Branding strategy: Cadillac may eventually drop the Escalade name.

Branding: Naming Conventions

GM’s move is designed to align Cadillac’s naming strategy closer to what the European makes, particularly the Germans, provide. All Audi car models start with an A and are followed by a number: A3, A4, A5 and so on. Audi crossovers start with a Q and include: Q3, Q5 and Q7. Mercedes-Benz typically employs a one-letter naming convention followed by “class” to include: C-Class, E-Class and S-Class. BMW takes a similar approach, assigning a number followed by series. For instance, you have the 3 Series, 4 Series and the 7 Series, to name a few.

Lincoln and Infiniti have also changed their naming conventions in recent years. These days, all Lincoln models (except for the Navigator) start with an MK and are followed by a third letter as in MKZ, MKS, MKT and MKX. For 2014, Infiniti changed its naming convention with “Q” followed by two numbers now representing cars (Q70, for example) and “QX” applied to all utility vehicles (QX50, QX60 and QX70). Unlike Cadillac, Infiniti introduced its new naming convention at once.

As expected, news about the top-end Cadillac’s planned introduction was warmly received by the automotive press. Even so, there was also disappointment with the choice of the name — not a few of us believe that “LTS” would have been an entirely suitable choice, what could represent “long or lengthened touring sedan.” But that won’t happen as new Cadillac president, Johan de Nysschen, the architect of Infiniti’s naming convention, announced the pending change with management backing.

The Experts Weigh In

Coming up with new model names is par for the industry. However, changing the entire naming strategy is a big move. Auto Trends reached out to a few brand-savvy folks to get their take on the changes and received mixed responses.

Bob Ramsey, a marketing consultant with Senior Living magazine out of British Columbia, Canada, pointed out that both Cadillac and Lincoln “…are trending to a universal scheme, yet not fully realized by the consumer, which includes anyone not a
brand loyalist.” Both brands have relied nearly exclusively on Canadian and American consumers, but now have much greater, indeed, global aspirations.

Ramsey felt that where Bonneville (Pontiac) and Fleetwood (Cadillac) names once met something to established owners (likely to include those that subscribe to his magazine), the model names mean nothing to most new shoppers, especially to global consumers.

Branding expert Rob Frankel, author of “The Revenge of Brand X: How to Build a Big Time Brand on the Web or Anywhere Else,” noted that Cadillac has been moving away from its “older man’s brand” image thanks to “new body designs and advertising.” He understands why Cadillac is making the move, but he thinks it is a mistake.

And that mistake has to do with confusing models with other brands. Said Frankel, “Try throwing all those number/letter names on to the table without their manufacturer’s names and see how many people can pick out whose is whose.”

Know Us by Our Brands?

One way that confusion may be averted is to simply refer to each vehicle by its brand name with no regard to model. That seems to be the direction premium brands are taking today with an Audi A3 being just as much as an Audi as an A8. It appears that Cadillac has that thinking in mind too, with only your wallet knowing those distinctions.

Automotive Branding: Are Sub-brands the Way to Go?

September 6, 2013 by admin Leave a Comment

Ask what should seem to be a fairly straightforward question and you would hope for similarly worded answers. That wasn’t the case when I made a query to auto industry and public relations professionals about branding.

That query asked: Are sub-brands the way to go?

By sub-brands, that would represent a brand that “reports” to another brand. For instance, Scion is part of Toyota. The M-Series is a performance sub-brand for BMW. AMG does likewise for Mercedes-Benz.

The BMW i3 launches the “i” sub-brand.

Sub-brand Defined, Sort Of

We’ve been hearing a lot about automotive sub-brands lately as Toyota seeks to give its dealerships more freedom on whether to carry Scion or not. In some eyes Scion is a separate brand given that its cars are registered separately. Fair enough. However, other respondents focused on the defunct Saturn as a sub-brand of GM while still others looked at Lexus in the same way.

For the record, Saturn was originally a separately held company and GM subsidiary before it was eventually pulled in to the brand fold to join Cadillac, Buick, Chevrolet and others. Lexus, developed in the 1980s, is Toyota’s luxury brand. Perhaps some respondents were looking at the lack of distinction between select earlier Toyota and Lexus models.

Let’s be candid: even marketers sometimes do not fully understand branding.

Besides Scion, BMW is launching its “i” division, a sub-brand of BMW. Lincoln recently announced its “Black Label” and Cadillac may yet expand its new “VSport” line to several models. All three examples are sub-brands.

What I wanted to know is what upside does a sub-brand have for a manufacturer?

Lincoln will launch its Black Label late in 2014.

BMW, Mercedes-Benz and Prius

Justin Cupler, editor-in-chief at TopSpeed.com, explained that “sub-brands ultimately are a way for an automaker to go outside of its typical scope without fearing damage to its main image. It’s almost like a beta test to see if it’ll work or not. If it fails, the maker can chalk it up as just a “test.” If it succeeds, the automaker looks like a genius and pulls in profits on the brand.”

Kevin O’Brien, Vice President, Marketing Solutions Operations at Minacs Marketing Solutions, gave an example of Prius (sub-brand of Toyota) noting the timing of the hybrid’s introduction when the segment was new. Once its environmental benefits were recognized Prius “organically developed into a sub-brand as the consumers were very loyal brand advocates.” Besides its market timing, brand positioning and product quality also helped advance the Prius line, while offering insulation for the Toyota brand should it later decide to abandon Prius noted O’Brien. That, of course, isn’t about to happen as the Prius family now consists of four vehicles, a line that also outsells all other hybrid models combined.

Lincoln and Cadillac Approaches

What is interesting about the Lincoln and Cadillac sub-brands is that the former is taking an approach based on design, the latter on performance. Both approaches may tell much on just how the parent brands perceive their upscale brands, with Lincoln taking a more traditional approach, while Cadillac appears headed to take on BMW and Mercedes-Benz on their own turfs.

Ford describes the Black Label Collection as “a new and higher level expression of the brand’s design, craftsmanship, and personal service and experience.” The automaker said that equipped Lincoln models will feature four exclusive exterior colors and a variety of interior enhancements including Venetian leather.

For GM, the emphasis is on performance with Cadillac VSport. Both the CTS and XTS sedans will offer the line, powered by the brand’s first-ever twin-turbo power engines. The enhanced 3.6-liter V-6 engine makes 420 horsepower and is paired with an eight-speed automatic transmission.

Cadillac VSport features a twin turbo V-6 engine.

The Future of Branding

Likely, we’ll see the introduction of more sub-brands moving forward. As both Daix and O’Brien indicated, if a sub-brand doesn’t succeed, it can be ended. On the other hand, the start up costs for launching a new brand are huge, requiring the creation of a separate dealer network. With sub-branding, the network is already in place and promotional costs can be contained.

Photos courtesy of BMW, Lincoln and Cadillac.

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