Automakers Win by Going Long

By Andrew Martschenko

The top automotive brands in this year’s Best Global Green Brands report are steadily gaining recognition for their commitment to sustainability. What may have started in the periphery, today lives at the heart of the business and brand strategies of the world’s most successful auto companies. These leaders are reshaping the industry and their sustainability efforts can be clearly mapped through each brand’s investments, roadmaps, and market-facing communications. Given their intense focus, we shouldn’t be surprised that five out of the top seven brands this year are in the automotive category.

Perseverance is paying off

This year’s industry successes did not come easily for all of the brand leaders. One of the more visible speed bumps was in the electrification of cars. The Nissan LEAF, which helped Nissan make the biggest jump from last year’s report, may have paved the road for commercializing a zero-emissions, electric vehicle. Even so, between the solvency of the electric-hybrid car company, Fisker, and battery maker, A123, as well as the struggles of urban planners to roll out the necessary charging infrastructure, the future of electric vehicles (EVs) continues to look uncertain. While business challenges and consumer adoption hurdles have given cynics an opportunity to ramp up criticism, organizations such as Nissan continue to forge ahead, investing on top of billions already spent. Forward-thinking innovators like Nissan and Tesla have demonstrated that an EV can have mass consumer appeal—and there is no question that EVs are here to stay—but adoption may take longer than expected.

Attempting to judge the industry’s success in sustainability solely on the basis of EV adoption rates is not only short-sighted, but also fails to acknowledge the strides that have been made in producing cleaner vehicles and influencing consumers to make more responsible choices. In this respect, 2012 was a great year for auto brands. Toyota continues to lead the category with the success of Prius, the brand’s first hybrid. Accounting for half of all hybrids on the road in North America, the Prius still epitomizes the eco-car concept in many people’s minds. More than 1.2 million Prius models were sold in the US in 2012, and 2.9 million were sold worldwide. But others, such as Volkswagen and Mercedes, add credibility to the sustainability movement by engineering vehicles that reduce emissions with lighter materials and new technologies. Ford has also done a masterful job in communicating and gaining a premium for branding its more efficient turbo-charged, direct-injection technology with EcoBoost.

Keeping the long-term in focus

The success of these automakers shows that a strong sustainability strategy has substantial benefits. What these brands have done right is focusing on efficiency and fuel savings—which are top-of-mind for most consumers—while working to also deliver on performance and style. Historically, emissions reduction meant smaller, tighter, and slower vehicles. However, brands like Ferrari, continuing to showcase its newest Hyper Hybrid, are proving that making a car run cleaner does not have to come at the expense of performance. Case in point: the LaFerrari can go from 0-60 MPH in three seconds. Although Ferrari’s dedication to continuous performance improvement may be geared towards the Formula 1 circuit, the innovations designed for the track are also driving advances in the mass consumer market. Brands such as Ford, Daimler, and Nissan are collaborating to release a mass-market hydrogen fuel-cell car by 2017. Since speed to market and adequate capital investments are requirements for success, unlikely partnerships—and inspiration from unexpected or unconventional sources—are fueling innovation and advancement for brands that realize they can no longer go it alone or do things the same old way.

In addition to greener product innovations, the top-performance brands are also continuously improving the cradle-to-cradle manufacturing process where automakers create, track, and manage the life cycle of every component in their vehicle lineups. Brands such as BMW have been recognized by the US Environmental Protection Agency as the second-largest Green Power Partner while BMW Group has been ranked the industry leader in the Dow Jones Sustainability Indexes for the last eight years. Ford has reached its target of using an average of four cubic meters per vehicle globally two years earlier than planned, while in the US, Honda is engaging with affiliates through its “green dealer” program to encourage improved energy efficiency.

As the economy improves around the globe there is always a tendency for some automakers to create bigger, more powerful vehicles. But when you look across a range of automotive brands that span from high-performance models like the Mercedes SLS AMG Electric Drive vehicle (2014 release) to everyday driving products and technologies, such as those offered by Hyundai’s Blue Drive, it appears the industry may have reached a turning point. Judging by the performance of this year’s automotive brands, deftly balancing opportunity with risk may prove to be more effective than giving in to short-term profit margin gains with bigger, fuel-inefficient vehicles. And in a world facing energy challenges, a growing population, and the inevitability of global gridlock, a greater shift toward more sustainable strategies and production couldn’t come soon enough.