Jun 23, 2010

Nissan Leaf Electric Car--Zero Emissions, No Tailpipe

Good article on the Nissan Leaf electric car, www.nissanusa.com/leaf-electric-car , in Automotive News, June 21, 2010 by James B. Treece. The article states that the Nissan Leaf advertising will focus on the vehicles zero emissions and that the marketing communications will focus on the fact that the Nissan Leaf does not have a tailpipe.

Nice marketing strategy. Photos of the Nissan Leaf show the back of the vehicle, highlighting the fact that there is no tailpipe. Other electric car manufacturers, selling competing vehicles, have front or side shots of the vehicles, while many of the Nissan Leaf photos show the vehicle from behind. This is a differentiator for the consumer. The Nissan Leaf strategy focuses on zero emissions, while the other manufacturers seem to be focused on styling.

The article goes on to note that more than 14,000 people have paid $99 to reserve a Nissan Leaf and that 90% are new to Nissan.

Another article in Automotive News, dated June 9, 2010 by Hans Greimel, noted that the first 6,000 to reserve the Nissan Leaf were in Japan and that an additional 13,000 in the U.S. have paid their $99 to reserve a vehicle.

Either way, the reservations alone have exceeded the first year production estimates of 10,000 units and that is without first driving the vehicle. The consumer has spoken.

The Nissan Leaf electric car has arrived.

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Jun 14, 2010

Launching the 2011 Ford Explorer via Facebook

Let's talk....today in Automotive News it was announced that Ford Motor Company will launch the 2011 Ford Explorer using Facebook. Usually, new models are introduced to the public at the Detroit Auto Show and then subsequent auto shows around the world. The article indicates that this might in some way take away from the traditional Detroit Auto Show unveiling of the 2011 Ford Explorer.

Put on your seatbelt, because this may have the exact opposite effect. This type of buildup using Facebook may result in a significant increase in visitors to the Ford Motor Company booth at the auto shows. Consumers will go there just to see the 2011 Ford Explorer. It may also result in increased traffic to dealer showrooms, which may result in increased car sales.

Remember, it is about selling cars.

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Jun 8, 2010

Private Label Manufacturing in the Automotive Industry -- Ford, Changan

Let's talk...Automotive News, June 7, 2010, just released a report that indicated Ford Motor Company, www.ford.com , is broadening its relationship with Chongqing Changan Automobile of China. According to the report, Ford is considering allowing Changan to private label a mid-size vehicle built in China using Ford technology. Who are the winners and losers? Let's take a look...

If this agreement proceeds, Ford will WIN in the short term by gaining cash from increased sales of the (Ford) Changan mid-size vehicle and by gaining access to more of the Chinese automobile market, even if it is by private label. Ford could WIN in the long term if they are able to manage the relationship and retain value for their own brand.

Changan will WIN in the short term as they will be able to utilize Ford technology to jumpstart their access to the mid-size vehicle market. Changan will also WIN in the long term as they will have access to current technology and a reduction in barriers to entry into the mid-size vehicle market. Changan also gains credibility by piggy-backing off the Ford Motor Company brand.

Ford may LOSE in the long term as they may be creating a competitor for their own products in the mid-size category. Over time, their sales in this category could be significantly affected by increased competition and reduced barriers to entry.

The use of private label as an effective marketing tool for automotive manufacturers can be a successful strategy as long as the products produced do not directly compete. The products also need to be easily differentiated by the consumer.

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Apr 16, 2010

World Car Manufacturing--Ford, Geely, Volvo

Let's talk....interesting news in world car manufacturing....according to Yahoo.com, Geely Automobile (China) purchased Volvo cars (Sweden) from Ford Motor Company (USA) for $ 1.8 billion on March 28th, 2010. Is this a good thing? Let's take a look....


Ford Motor Company (USA) http://www.ford.com/ --This is a WIN for Ford and a good strategic move. Ford was never able to incorporate Volvo into their lineup. They had too many brands to contend with and the strategic focus was clouded. Ford can now concentrate on what they do best, marketing the Ford and Lincoln Mercury brands. Ford Motor Company bought Volvo for $ 6.45 bn in 1999 and sold it for $ 1.8 bn in 2010. Ford indicated they would be receiving less cash than the $ 1.8 bn due to settlements at closing. Ford took a real loss on this brand....it was never profitable for them.

Geely Automobile (China) http://www.geely.com/english/ --This is a WIN for Geely and a good strategic move. Not only did Geely purchase Volvo cars at a good price, but they now own all of Volvo and its assets. This link is a short video on the Volvo C30 electric car. http://www.topgearrules.org/new-volvo-c30-electric-car-2010.html Purchasing Volvo cars has real marketing benefits for Geely. Volvo is a niche marketer that built its reputation on quality, safety and durability. The Swedes have produced a good product over the years. This purchase includes a complete luxury car manufacturing platform and advanced technology, this alone jettisons Geely onto the world luxury car manufacturing stage.

The parent company of Geely Automobile is Zhejiang Geely Holding Group Co., Ltd. http://www.geely.com/english/ . As noted on the website, Zhejiang Geely Holding Group Co., Ltd. is headquartered in Hangzhou, China and has six manufacturing bases for vehicles and power assemblies located in Linhai, Ningbo and Luqiao in Zhejiang Province, and Shanghai, Lanzhou and Xiangtan. Current annual manufacturing capacity is a total of 300,000 complete vehicles and 300,000 engines and transmissions.

Volvo cars (Sweden) http://www.volvocars.com/ --The transaction between Ford Motor Company and Geely Automobile has varied effects on Volvo. This is a short term WIN for Volvo cars (Sweden). Volvo will be given center stage at Geely and the attention it deserves. However, this is a long term LOSS for Volvo cars (Sweden). The long term prediction is that Geely will fully absorb Volvo cars and assert majority control over the brand. Overall, the risk of the venture appears to be on the Swedes' shoulders.

Buying companies to gain a foothold in a new market is not a new strategy. What is "new" is that China is using this tactic across ten strategic industries, providing quick access to numerous new markets, improving competitiveness and gaining advanced technology. According to http://www.chinadaily.com.cn/ on August 13, 2009, the ten strategic industries identified in 2009 are: steel, automotive, shipbuilding, chemical, light industry, textiles, nonferrous metals, equipment manufacturing, electronic information and modern logistics. According to the FT.com on March 28, 2010, the purchase of Volvo cars by Geely Automotive was financed by Chinese state institutions and local provinces.

Copyright 2010 Go-Market, Inc.

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