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Friday
Jun082018

Sedans, SUVs and Group Think

By Christopher A. Sawyer

When success isn't guaranteed and Finance runs the show, this is what you get: The same thing in small...In July 1990, Car Magazine ran a cover showing the front ends of various European cars with the headline: “Euro-car Clones: Who’ll Put a Stop to Dead-end Design?” It was a provocative question, one that took eight pages to answer, but its ultimate result was to give mankind the fish-mouth Ford Scorpio and oval grilles on every Ford that followed. Variety is, as the saying goes, the spice of life, but for all of the perceived variety in the auto industry, it is a business very much steeped in Group Think.

A great deal of this sameness is a result of the vast sums of money involved in designing, engineering, building, and marketing a vehicle. A clean-sheet program costs billions of dollars, and this doesn’t include the money spent on meeting changing safety and emission regulation, or to chase the chimera of autonomy, mobility, and shareholder value. How much each new vehicle program costs is a bit of a mystery, as different companies have different internal accounting procedures. In the end, however, the same amount of money is spent, and it’s a lot.

...medium...With margins squeezed at every turn, the drive to reduce risk becomes paramount. No one wants to be a risk taker for the simple reason that failure is costly. For every Mustang there’s an Edsel or a Pacer, and every failure increases the risk aversion. This creates a feedback loop that has automakers chasing each other for the same market share. Occasionally, everyone hits on the same idea at roughly the same time, as did Chrysler, Ford and GM with the Cherokee, Explorer, and S-10 Blazer when they collectively created the compact sport utility market in the early 1980s. These roots have spawned a tree that today overshadows the rest of the market. As a result, Fiat Chrysler and Ford are planning more SUVs, and shedding cars as fast as possible in the mass market. The truth, they say, is that people want them.

...large...I question this thesis. A number of parameters — increased congestion, more trucks on the road, the perception of increased safety coupled with societal angst, image, peer pressure, narcissism, etc. — have fueled the move to SUVs; vehicles that were not praised for most of their existence. Most people, while acknowledging the rugged, outdoorsy, romantic image of SUVs, didn’t want to own one. It wasn’t until automakers began making them more refined, more comfortable, more car-like that buyers began to respond. Soon keeping up with the Joneses intersected with the growing ubiquity of these “off-road” boxes such that the switch was flipped and SUVs gained dominance. It’s the automotive version of the mere-exposure effect.

Nazi propaganda minister, the heinous Joseph Goebbels, once said : “A lie told once remains a lie, but a lie told a thousand times becomes the truth.” It is similar to, but subtly different, from another saying of his, “If you repeat a lie often enough, people will believe it, and you will even come to believe it yourself.” Both are applicable here, not in that SUVs are a lie, but that — as the number of SUVs on the street grew — people began to change their opinion about them. Peer pressure required that they begin to take them seriously, and drove an increasing number of purchases. And automakers, lured by increasing sales, fat profit margins and a need to placate investors, convinced themselves that SUVs were what the people wanted.

...extra large...As this was playing out, the car side of the ledger began to falter. Rather than create vehicles that met the needs and unspoken desires of the buyer, automakers began to fall into the trap highlighted by that July 1990 Car Magazine cover story. They became increasingly interchangeable as fear began to dominate decision making. Styling became more dramatic, windshields more raked, but the vehicles themselves were never more similar or more difficult to live with. Entry and exit became more difficult — driven, in large part, by “fast” windshields and backlights that diminished the size of the door openings — visibility decreased, size increased, and designers, product planners, and marketing personnel went through the motions. No one wanted to break out of the mold because it was safe inside of it. If the segment declined, the failure was communal, not personal. Everyone failed. Conversely, no one succeeded.

This automotive analog to “everyone gets a trophy” caused marketing support to be shifted from the difficult to sell and image-free car, to the safe and profitable truck. It is a dance perhaps best exemplified by the Lincoln Continental. Though flawed in terms of its parts bin engineering and sloppy execution, the Continental sold well when first introduced, but declined at an accelerating rate as Matthew McConaughey swapped the range topping four-door sedan for the brand’s SUVs. And so the lie continues. People just don’t want sedans.

...and jumbo.It’s at times like these that I think about Hal Sperlich. He rose to fame with the introduction of the Ford Mustang, and secretly built a prototype of the small, front-drive hatchback he thought — he knew — Ford should build in its then-new factory in Valencia, Spain. He showed this car to some FoMoCo board members before a board meeting in Spain, and they raised objections to board chairman Henry Ford II’s preference; building a new version of the rear-drive Escort. The “Deuce”, however, was more incensed that Sperlich had gone behind his back than he was by the fact that car he preferred was defeated, and fired him. Ironically, Sperlich made this decision because he could not get his idea through the normal channels as every boot lick and yes man at Ford knew which car the boss wanted. Sperlich never saw the Fiesta reach production, but soon joined Chrysler where he created the minivan.

Men like Sperlich are rare in this or any other industry. They recognize trends before they are trends, temper research with instinct, and rely on experience. Innovators like him have an innate feel for what effect immutable human nature has on technology, demographics and society, and create vehicles that fit those parameters. They seek solutions, and refuse to succumb to Group Think. They would look to build new alternatives, not more SUVs.


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