Will Technology be What Sells Automobiles?
By Chris Haak
Eras in the automobile industry continually wax and wane as time passes. Just going back 40 years, we started with the muscle car era of the 1960s and early 70s (with low, wide, squared-off cars), then moved to the malaise era (from the mid-70s through the early 1990s, as the global auto industry struggled to keep up with increasingly stringent fuel-economy, emissions, and safety requirements.
I’m not sure what we’d call the 1990s, which saw a number of unfortunately homogeneously-designed vehicles with cheap interiors early in the decade, followed by the rebirth of serious performance cars as quality began to improve and cars grew beyond the size of their 1980s downsized predecessors. Then there was the first decade of the 21st century, with a continuation of the performance and vehicle-size trends of the 1990s, but with a renewed focus on design and perceived quality as well. Let’s call the 2000s the second performance car era – or the second horsepower wars era.
Many industry observers, this scribe included, predicted that with four dollar per gallon (or more) gasoline and five dollar per gallon (or more) diesel fuel, the era of the performance car was again over. With fleet fuel-economy requirements reaching 35.5 miles per gallon by 2016, how can there be a place for 200-horsepower compact cars, 300-horsepower midsize sedans, 400-horsepower luxury cars, and 500-horsepower sports cars?
Fuel Economy as a Differentiator?
If the performance car era is coming to a close, it stands to reason that another era has to begin at that point. But what would the new era be? Would the next era be defined by fuel economy wars? Manufacturers have fired a few warning shots since 2008. Nearly every newly-launched vehicle has improved upon the fuel efficiency of its previous generation. Even older vehicles like the Chevrolet Cobalt and Chrysler minivans were tweaked with gearing and tuning changes to improve fuel economy numbers, likely for no reason other than bragging rights. Nearly every automaker has plans to increase the number of small, efficient vehicles in its lineup, to the point that there is likely to be a glut of small cars in the next few years.
But the problem with anointing this era as the “fuel economy wars era” is that all companies who hope to sell cars in the industrialized world have to meet increasingly-stringent regulatory requirements for fuel-economy and/or CO2 emissions. Unless a car gets gas mileage leaps and bounds above the competition, almost every company will be selling a fleet in the US that averages 35.5 miles per gallon. Sure, there can be a race to be a few miles per gallon better than a particular competitor, but all cars will be more efficient.
Design as a Differentiator?
Another thought was that as the middle of the past decade came and went, perhaps the next era would be defined by a renewed focus on design. We’re already observing an industry where more design risks are taken, even on mainstream products, than we’ve seen since the 50s and 60s. Would design become the next big differentiator between a successful automobile and an unsuccessful one? After all, quality, fuel economy, and performance are all very good in nearly any new car. So why should I buy one particular car over another? Perhaps, all things being equal, I’d buy the one that looked the best, and had the nicest interior for the money.
Stung by criticism of their tepid designs, Asian manufacturers like Honda, Toyota, and Hyundai ventured into new territory with their designs. The 2007 Camry does not feature an exciting design, but it’s a more interesting one than on the car it replaced. The 2008 Accord added glitz and several clichéd design cues like a Hofmeister kink in the C-pillar that had no place in Honda’s design language before or since. Hyundai introduced a love-it-or-hate-it, aggressive design on its 2011 Sonata that, personally, I’m a big fan of.
But in spite of this, good design doesn’t seem to be selling cars the way I thought it might. The Ford Fusion – which is a very good car – is handsome, yet is outsold by the arguably less-attractive Camry and Accord (not to mention that the Fusion was more recently refreshed than either of those cars). The Chevrolet Malibu – an attractive midsize sedan – is whooped on the sales charts by the Fusion, Accord, and Camry – none of which is as good-looking as the Malibu, in my opinion.
So perhaps good design doesn’t sell cars, but can bad design doom a car’s sales? The sad-sack Chrysler Sebring checks all of the boxes on paper – available six-speed automatic, large V6, navigation, Bluetooth, good pricing – but it it literally dead in the water in the market. Part of that is its odd long-hood, short-deck proportions that look out of place in its class. The other part of it is that the car is generally a lousy, unrefined car (sorry, Chrysler, but you’ve basically admitted the same over the past few months).
Technology as a Differentiator?
So, the next era in automobiles may be defined by design, and may be defined by fuel economy. What about something else? At a speech in Detroit in mid-January, Chrysler’s Ralph Gilles, the Dodge brand CEO and Chrysler Group’s design chief said that the ability to add more technology in vehicles will separate the winners from the losers in the car business going forward. In his words, “Technology is going to be the trump card — absolutely, without question … making the active interface the reason people buy a car in the future.” Gilles also said only 5 percent of the millennial generation cares about styling. Interesting words coming from a career designer, aren’t they?
But really, are there any technologies that reallyset apart one car from another? Nearly every new car has available navigation, Bluetooth, power everything, iPod interface, and satellite radio. Many have backup cameras, telematics, lane departure warning/prevention systems, blind spot alerts, turbocharged engines, all wheel drive, dynamic cruise control, and more. Ford’s ballyhooed SYNC system, which we at Autosavant have now lauded three times over the past three days, is being commoditized as we speak, with Kia’s UVO system capturing SYNC’s essence (and its Microsoft affiliation).
But although Gilles was referring to the human-machine interface, with items such as integration with smart phones, touch screens and colorful interfaces becoming the price of admission, perhaps he was thinking too narrowly. Technology will have the ability – out of sight and hopefully undetectable to the driver and passengers – to hit fuel economy bogeys without sacrificing passenger space or comfort and without sacrificing performance. Technology like this is in the form of direct injection, turbochargers, hybrids, clean diesels, start-stop systems, six-speed (or more) transmissions, and the like.
I also believe that buyer aren’t going to be drawn to any technology in particular – or even in aggregate. Instead, technology will be the price of admission into an increasingly-competitive new-vehicle market. Buyers will have to first be attracted by price, design, quality, and – all things being equal – technology may be the tie-breaker. I don’t envision technology as the differentiator, and I don’t see millennials accepting poorly-designed, poor-quality cars just because they might have great technology in them. In the hyper-competitive new-vehicle market of the coming decade, all of the boxes will have to be checked in order to make serious inroads with buyers.
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