Theme: Values – The Fluctuating Preferences of the New Customer

Values change and with them the shape of that blob known as the car market.

Also known as the Buick Verano, the lush Opel Astra saloon:
Also known as the Buick Verano, the lush Opel Astra saloon:

This short discussion begins with news that everyone’s favourite compact, near-luxury car, the Buick Verano is to be dropped from GM’s north American line-up. Buick now sells more CUVs than saloons and sells less of everything compared to their heyday. That is a result of a change in values. What Buick represented no longer fits with the desires of enough paying customers. Those are a predilection for a raised ride height over the lower-seating position of a saloon. Buyers like the hatchback format. American-ness no longer rates as highly among American customers who are happy to buy any brand if it fits in with their pocket and their needs. On the negative side, buyers don’t care for the image Buick used to have and perhaps still does, of conservative mild-luxury.

Our old friends Lancia and Rover succumbed to a similar shift in the preferences of European buyers. The values of economy attracted one part of their audience who favoured less expensive products from other makers. A desire for a sporty image, more importantly, repelled customers who saw Rover and Lancia as too orientated towards comfort, even as roads choke and average speeds fall gradually in line with the spread of traffic enforcement.

2015 BMW 3-series:
2015 BMW 3-series:

From out of the new constellation of values, new brands emerged and others changed form. Volvo has been moderately adept at moving its clientele from practical vehicles to less practical vehicles. BMW actually sell quite a lot of averagely-sporty cars: all those low-end and mid-range saloons and X-cars are not a lot more competent than an Insignia or Mondeo. Ford is asking us to unlearn what we think Ford “means” as they search for a way to convince us Ford is not really about inexpensive, useful cars with a dealer nearby. Opel’s woes are all about values. Even if they offer a range of entirely competent cars, the value preferences of customers for classless prestige has led them to VW more often than to the brand of the propeller flash.

Honda is struggling. Once content to market cars to pensioners and to boy-racers, they have tried to alienate the pensioners with weird styling, unaware that pensioners don’t give much of a care as to what others think of them. And the boy-racers and performance people are not all that interested in the Civics and Accords which often offered smart engineering, a fun drive and a Japanese take on the agile saloon.

Does it get any more basic than this? Image: Dacia UK
Does it get any more basic than this? Image: Dacia UK

Other brands are in the ascendant: Dacia appeals to the cost-conscious and also perhaps to the former buyers of Skodas and low-end Volvos who like a big space on wheels for not a lot of cash. At the other end of the spectrum, Rolls Royce sell very well to plutocrats and Bentley has cornered the market in footballers, their wives and managers, people whose values are based on status consciousness. Both brands used to be about aristocracy and indifference to others. Rolls now sell to the global managerial elite. The Rolls people don’t need agility and sportiness so much as a mobile château to drive to the château, yacht or airport – or all three on any given weekend.

Nissan have also done well in the new order: people like their hatchbacks except the one that’s a bit lower and longer than the others – its name eludes me. They are also looking to add to their eco-credentials; that’s another sign people have an increased wish to do less damage with their cars. Not that they really live up to this wish.

1990 Honda Civic:
1990 Honda Civic, pensioners favourite?:

There’s not a lot of brand loyalty in Nissan’s crowd. As soon as someone offers a nicer package they’ll all shop with them. Nissan doesn’t stand for much and maybe that’s refreshing because they have no baggage. It will be easy for them to move on as no-one cares what they stand for. People used to spit blood at the idea of diesel Alfas and front-drive BMWs and Mercedes. It turns out people aren’t that bothered if the price is right.

It makes no sense now to look in the rear view mirror regarding values: Jaguar will sell an SUV and so do Porsche. Their values envelope is extremely flexible. It turns out that what attracted Porsche customers was the perceived quality and cost of their cars as much as their on-the-limit ability. Porsche squashed much of that into the Cayenne and their smaller CUVs and even into their fabulously horrible four-door saloon that they flog in great numbers.

Values are more fluid now as people#s tastes broaden and the old certainties that give us Wolseleys for bank-managers and Austins for blue-collar workers are long gone. People still want something in accord with their values but what those values are is harder than ever to say.

Author: richard herriott

I like anchovies. I dislike post-war town planning.

5 thoughts on “Theme: Values – The Fluctuating Preferences of the New Customer”

  1. Richard that is an interesting and thoughtful overview of why people buy brands and I do think that nowadays it is a perception that is bought and sold. I think that there is more concern or perceived downside to making the wrong decision than to be gained from making the “correct” individual decision. Decisions are also made through status anxiety so again purchases are made because they are perceived as safe. Perhaps another factor influencing decision choice is the change from purchasing cars to leasing them; make the safe choice at the start and residuals will be better and payments lower. Much better to read about the market than have to deal with it.

    1. Thanks – I can return the compliment with the added bonus that you identified a feature of the market I overlooked, leasing. The more leasing predominates then obviously the less tolerance there will be for oddity. That dull custom of ordering monochrome cars is probably driven entirely by leasing and residual considerations. What that has to do with values is that thinking you’re saving (actually: not losing) some footling sum because you ordered a common colour trumps harmless individualism. It also works against any brand with marginally worse residuals. It’s probably a non-linear positive feedback loop. 1% poorer residuals becomes 6% and 12% as more buyers abandon the model or brand.
      Put like that, most of what car mags focus on is totally irrelevant to customers.

  2. No Verano as pictured in the lead photo has ever graced North American roads. That is the one we will not get here. The one being discontinued is made by Daewoo, um, GM South Korea on some version or other of the old Astra platform. The move here is not to hatchbacks, but to so called SUV/CUV thingies, which are estate cars on stilts. Women appreciate driving from a high vantage point. Yet Honda still sells over 600,000 Civics and Accords per annum, while BMW is off 17% this past fiscal quarter despite pushing leasing for years. VWs hardly make a dent in the market. But your Mazda3 owner would not feel alone! Nissans amazingly also sell well for some unfathomable reason. All in all, the vehicle landscape is not very interesting here these days. These vehicles are all mere plodders.

    1. A CUV is a hatchback, though, isn’t it? And an estate car is a type of hatchback too if you’re using the term broadly. Put another way, four door cars are not increasing in popularity.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: