Shifting Gears: How Consumers are Steering Auto Brands’ Future
By Michel Gabriel and Andrew Martschenko
Automakers are grappling with the mobility needs of tomorrow, changing their strategies according to customer needs worldwide. Consumers want value for money at all price points, with traditional notions of ownership evolving. High- growth markets still value the vehicle as a status symbol with many of these car buyers participating for the very first time. In more mature markets, the growth in actual miles driven per person is declining and alternatives such as car-sharing options and the adoption of more flexible models are prevalent.
These trends are industrywide. Urban youths across markets are seeking car-sharing options. Customization, innovation, and sustainability are key, along with in-car connectivity and smart features. The auto sector is evolving, weighing tech must-haves versus nice-to-haves. Many global automakers are now embedding technologies that would have launched with their premium brands first but have opted to directly offer in their high-volume vehicles. Other considerations shaping auto brands’ outlook:
The recent influx of people into big cities has compelled brand owners to take urban mobility concepts seriously. Demographic trends such as the “down-aging” of older but more active and plugged-in consumers are forcing brands to ask themselves: How can brands actively connect with the younger end of the spectrum while remaining desirable for the youthful older generation?
The evolution of luxury
Consumption is changing, too, as quality of life begins to outweigh (in some markets) status and luxury. On the one hand, there’s a desire for the exceptional and the exclusive; on the other, a disdain for excess and waste. As time spent enjoying the sensual pleasures of the driving experience becomes a luxury in and of itself, car brands must address the diverging needs of consumers, especially those truly seeking the luxury automotive experience—not to mention luxury car buyers in fast-moving markets. Everything must be re-evaluated—the choice/purchase process, the range of services offered, supply chain and sustainability metrics, partnerships, managing the brand experience, and digital and social marketing.
A new kind of brand leader
The successful auto brand leader must inspire employees, sales partners, manufacturers, partners, stakeholders—and, of course, customers. The automobile industry is undergoing a transformation, and the CEO and the CMO must point to the horizon in 2023. That’s where the opportunities lie, and it’s also where the greatest rewards will be reaped. That is where each brand must go to ensure it stays relevant in its sector.
— Michel Gabriel (email@example.com) is Managing Director, Interbrand Zürich.
Andrew Martschenko (firstname.lastname@example.org) is Senior Director, Strategy, Interbrand New York