With 15 auto brands on Interbrand’s 100 Best Global Brands 2016 list, the automotive sector is crucial. Autos also are a top-growing sector, rising 9.5 percent in total value this year to more than $256 billion.
“This is impressive for an industry that can get bogged down by large legacies, infrastructures and ingrained processes,” noted Daniel Binns, Interbrand managing director and auto sector expert. But while the speed of change is growing exponentially, “many of these brands are keeping pace by responding to consumers’ evolving needs and embracing the technology that’s changing the way the world thinks about cars,” added Binns.
Still, a number of factors will challenge automotive’s growth, including the noted lack of enthusiasm by many millennials for the very idea of owning an automobile. Car brands will have to harness mobility services strategies, command of all things digital and develop customer experience strategies to keep growth going, especially as they’re now facing a slowdown in the US market after a seven-year boom.
At No. 5, Toyota is the leading automotive brand on Interbrand’s annual report, with its brand value having grown by 5 percent over the past year to nearly $56 billion. Ranked at No. 9, Mercedes-Benz is the next auto brand on the list, followed by BMW at No. 11 and Honda, No. 21.
Ford is the only traditional US-based brand on the list, at No. 33, in part because no other American brand has achieved the very important Interbrand criterion of widespread globalization. Nissan’s brand value climbed the most on a relative basis, up 22 percent to $11.1 billion in Interbrand’s valuation. Volkswagen’s brand value declined the most, by 9 percent, to $11.4 billion.
brandchannel talked with Binns about how Interbrand rated autos for its Best Global Brands 2016:
bc: It is interesting that Ford is the only US-based brand to make the list, besides Tesla. What does that say about American automakers?
Daniel Binns: This is a global list, so in part it’s about the fact that no other American brand has the kind of broad global footprint that these other brands do—Ford comes closest. Look at Chevy’s footprint globally versus Toyota or Volkswagen or Nissan, for example; it’s not in every market. And the GM portfolio is split even in Europe, with Opel. Also, with Ford, part of it is financial performance. And its strength of brand does well versus other mass manufacturers.
bc: Why did Tesla finally make the list for the first time, although in the last spot at No. 100?
Binns: Tesla’s performance fundamentally is a result of its drive down into the marketplace with the Model 3 it has coming out. It has the potential to transform the market—Tesla’s business, too—and return profits. Plus the strength of Tesla’s brand helps it punch so far above its weight. It has such a presence among the man on the street when you ask who’s innovating in the category, despite its small number of cars. It’s a reflection of expected future performance. Tesla has proven you can break in and build a car brand from scratch—and no one else in the modern era has done that. Only niche brands. There hasn’t been any major outside force to do it, though lots are threatening, such as Google and Apple.
bc: With quality basically at par and nearly every automaker embracing the goal of self-driving and electrified vehicles, how do automotive brands stand out from here on out?
Binns: There are a couple of ways. One of them is the overall customer experience, not only through the pre-purchase and purchase phases but also through ownership as well. And innovation.
bc: But as you point out in your automotive sector analysis, the millennial generation, in addition to their general lack of enthusiasm about cars, is less inclined than prior generations to even visit a car dealership. So how do you boost the customer experience?
Binns: It will be digitally, delivering a seamless experience for consumers that is more cognizant and predictive of their needs. For example, Mercedes-Benz has a lifestyle configurator online that it is using successfully, especially with female consumers. And as auto brands pivot from selling products to offering access to mobility, those that are successful will really reap the rewards.
bc: It seems vital to Ford’s future that CEO Mark Fields seems to have awakened about 18 months ago and decided that, henceforth, mobility would be a priority.
Binns: Yes, US manufacturers were late to that party. Nissan was committing to this idea five years ago. But now you’re seeing catch-up not only by Ford but also by GM and Fiat Chrysler. They’re trying to play catch-up, quickly.