THE AUTOEXTREMIST

October 6, 2010

The Ultimate Sellout Machine: BMW commits brand suicide.

By Peter M. De Lorenzo

(Posted 10/5, 3:00 p.m.) Detroit. Okay, so after eleven plus years of doing this publication I get the fact that the auto business has been fundamentally and inexorably altered forever. With the world’s largest automotive market now in China there’s really no other conclusion that can be made. What was once etched in stone before in the “bible” of automotive truisms has now been blown-up in a hail of chaotic change and business as-far-from-usual as can possibly be imagined.

Or has it?

Let me get back to this but first, the change we have witnessed in the past decade has been staggering. And no one’s crystal ball or “golden gut” could have predicted what has transpired.

We’ve watched as two of what was left of the car companies formerly known as the “Big Three” finally imploded in a spectacular fireball of failure wrapped in excuses, crippled by serial incompetence and paralyzed by their own bureaucratic ineptitude and blind arrogance. We watched as Toyota – the Japan Inc.-fueled, so-called Juggernaut of the Millennium – succumbed to hubris and greed resulting in a crushing destruction of an image that was carefully – albeit cynically – pounded into the American consumer public for years.

We’ve watched as the Korean Hyundai-Kia conglomerate went from building glorified motorized tin cans to a force to be reckoned with in the market now and well into the future. We watched as Porsche - that once-exclusive builder of sports cars - went completely off the reservation and started building trucks and four-door sedans, image and historical resonance be damned. We watched as Mercedes-Benz went down the path of “being all things to all people,” diluting the brand to the point that any residual halo from the “Engineered Like No Other Car in the World” glory days was well and truly buried in a kaleidoscope of models whose sole purpose in life was to chase every whim and whimsy that fickle consumers could fathom, adding up to a three-pointed star of Not Good.

We’ve watched as Ford has ascended to a new, rarefied status as the combative American automobile manufacturer most prepared to compete globally and the one that the rest of the industry watches closely and takes seriously every day.  And we’ve watched as Audi has emerged as the German automaker – focused and relentless in its mission and supremely confident in the way they go about things – a company that marches to its own drummer while cranking out hit after product hit.

And then there’s BMW. Now, as longtime readers of this column know, I’ve written extensively about this car company because as purveyors of over-the-road excellence BMW has had few peers over the years. And the brilliant crafting of its image, at least here in the U.S. - the result of one of the great automotive advertising themes of all time, “The Ultimate Driving Machine” - has been an ongoing clinic for how it’s done for automotive marketers of all stripes.

I think it’s important to remember that once upon a time this was the little car company that could, one that captured enthusiasts’ hearts with the brilliant 2002 and basically invented the term “sports sedan” and one that lived the discipline of “focused consistency” like no other car company. Over the years BMW seemed to be the one unwavering constant in the kaleidoscope of change that was sweeping the industry. And despite the occasional missteps and some outright flubs, BMW seemed to be secure with its mission overall, enough so that even the Dismal Design Era of Doom propagated by that designer who shall remain nameless – the era that almost swallowed the company whole – didn’t end-up derailing the company, even though lesser companies certainly would have come apart at the seams.

But alas in the new automotive world order – where the somewhat rational tempo and cadence of the business is being disrupted on a daily basis and the “new normal” is fraught with chaos and hand-wringing – we’re seeing car companies losing their collective minds while chasing niches and segments that they have no business pursuing.

And there’s no more graphic evidence of that than BMW, with its mind-bogglingly horrific decision to bring out a new family of front-wheel-drive cars based on its Mini architecture, a series of vehicles smaller than the 1-series.

Let me re-state that: That automotive paragon of high-performance, rear-wheel-drive virtue, that tribute to The Way It Should Be in terms of uncompromised engineering, that shining beacon of classic Germanic automotive excellence, has just proceeded to throw it all away and blow itself up real good.

To say that BMW management has totally lost sight of its raison d’etre and is about to embark on a journey that will forever change its persona in the market is the understatement of this or any other year.

What? Having the Mini wasn’t enough for BMW to lord over? Now they want to somehow convince the multitudes the previous 40 years never happened? If I were to imagine an email from a smug BMW corporate officer it would go something like this:

“Oh, we weren’t all that serious about this Ultimate Driving Machine business, you Americans are way too attached to that and need to get over it. We’re about Joy and having a BMW in every frickin’ garage because after all we still have pictures of Gordon Gekko on our boardroom walls. Greed is good, Baby, and we couldn’t care less about brand image. That’s something for you wankers and hand-wringers in the American automotive press to worry about. People will buy them in droves. Count on it.”

Really?

And here I thought Porsche and their VW overseers were the ultimate architects of automotive greed. Porsche makes no bones about the fact that they’re into making money. Everything from their legendary – and usurious – option lists to the fact that if they can make a buck they will leave no stone unturned to do so is a philosophy that’s right up front for all to see. And they believe that as long as they appease the faithful by building cars for the hard-core Porsche purists, then they’re free to build whatever the hell they want to build. Not ideal, by any means – especially when SUVs are part of the equation – but it is nonetheless hard to get too torqued-up about it when they release cars like the hot new 911 GTS or 911 GT2 RS Turbo.

BMW on the other hand has nothin’. Their vaunted “M” cars are too damn heavy and ponderous and well, just too far a field from where ultimate BMWs should be to qualify as such. And the new 5-series is a hulk of a car so far removed from the elegantly wonderful 5-series that debuted in this country back in the mid-70s that it’s embarrassing. The gradual bloating of BMWs – no matter what the size – is not progress, it’s a sign of a company so cynical in the way it goes about its business that they’ve forgotten what the original premise of the whole damn thing was altogether. If it weren’t for the 3-series, the company would be the equivalent of a Germanic Toyota.

It’s easy to see why the current BMW management would screw themselves up into believing that adding 100,000 cars smaller than the 1-series to their product portfolio would be nothing more than a responsible decision that would add to their revenue stream. After all, they’ve seemed to have adopted the hoary adage from a bygone General Motors: We’re not in the business of making cars; we’re in the business of making money.

Getting back to the chaotic change that has become the standard operating procedure in this business, I will tell you one thing that will never become obsolete or irrelevant in this industry no matter what or where it’s centered, and that is the efficacy of a brand.

A brand image takes years upon years and billions of dollars to establish. Get it right – as BMW once did – and it will pay off handsomely in a bulletproof reputation, legions of satisfied customers and big profits. Get it wrong, or even worse, squander an impeccable brand legacy with a poisonous cocktail of imbecilic logic and rampant, unbridled greed as BMW is about to do with its front-wheel-drive folly and you can and will destroy that hard-won brand image overnight.

My only conclusion is that BMW management is woefully misguided, wildly misinformed and flat-out delusional to think that they can squander 40 years – at least in this market – of focused consistency by openly thumbing their noses at the very enthusiasts who helped propel the brand to legendary status in this country in the first place.

I predict that BMW’s decision to embrace the “joy” of front-wheel-drive mediocrity will send its hard-core customers away - in droves.

And that’s the High-Octane Truth for this week.



 

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