The Forum for Partners in Iran's Marketplace

March 2005 / No. 34

Auto Industry

Competition Stands on Creative Car Design

Consider two new car models in North America. One is the Pontiac GTO from General Motors (GM), with a powerful engine and terrific acceleration. It’s not selling well. The other is the Chrysler 300, a luxury saloon, which is shaping up to be the biggest success in the manufacturer’s history. Why is one flagging and the other booming? The Pontiac GTO has a dull jelly-bean design, whereas the Chrysler 300 has an aggressive front end and a hunkered-down shape that gives it great pres­ence. After a couple of decades when cars all looked increasingly similar, design is once more becoming a key differentiator in a crowded market.

Bold is back. This will be the year of the designer as more and more manufacturers seek to stand out from the crowd. No longer are there car-designer company hacks who stick with one firm for years. Today the stars move around from brand to brand and strut the stage at car launches and auto shows, like fashion designers. The Armanis and Lagerfelds of the auto world include Chris Bangle of BMW, Peter Horbury of Ford (the man who turned Volvos from fridges on wheels to sculpted cool-mobiles) and Ralph Gilles, the 34-year-old behind the Chrysler 300.

With around 25% over-capacity worldwide, price­ cutting by giving cash-back deals has become as com­monplace in Europe as it has been for some years in America. America has twice the number of car brands on the market that it had 30 years ago, as import brands have multiplied. In a market like this, companies are desperate for an edge that allows them to command a premium price.

Two more cars that are being talked about in design circles are the big BMW 7-series models and the Rolls-Royce. Both are striking and bold. After years of classical, straight-lined refinement, BMW has gone all curvy, with its latest 7-series and the new 6-series coupe. Bold designs walk a tightrope. The German motoring press lambasted BMW for the 7 when it first came out a couple of years ago, although it has warmed to the 6-series.

Another extremely bold design is the first new Rolls­-Royce to be brought out since the company passed into the ownership of BMW in 1998. It looks like a real, proud Rolls-Royce rather than the staid, stale versions of the past 20 years. It is a huge car, yet the clever way the vari­ous proportions have been managed makes it look like a big gleaming sculpture.

The use of design is even more difficult in the volume market. Renault stands out in Europe as the manufacturer that has played the design card most vigorously. Occasionally it does not work. Its Avantime upmarket coupe never even made it into five figures be­fore its production was stopped. In the mid-1990s Ford, in the big saloon class, came out with a Scorpio model, which looked as though the front and back had been designed by different people on each side of the Atlantic. It bombed and Ford dropped out of that segment.

But Renault is not at all deterred by failures such as the Avantime. Its mid-1990s' little Twingo, with its cross-­eyed headlamps, was a runaway success. So was its bold and innovative Scenic version of its Magana saloon: the Scenic was not just good-looking, it was a whole new functional design, bringing the height and space of people-carriers down to the mid-range. Renault’s boss, Louis Schweitzer, and its chief designer, Patrick Le Quement, continue to emphasize design more than any other volume manufacturer. Renault’s sister company Nissan is also using the bold design of its 350z sports car as a way to boost the image of the whole Nissan brand, by associating it with something stylish.

Other manufacturers will be bringing out 2005 models designed to give a family look to their whole range. Ford will take this further with the new version of its bestselling Focus. The first version of that model defined a whole new sort of “edge” styling that can now be seen across Ford’s entire range. Another example is Fiat, which ran into trouble with its new mid-sized Stilo model in 2003, because it looked like an imitation of a German car. Now the aim is to have every model with a “Made in Italy” look, trying to grab some of the glitz of Ferrari, Alfa Romeo and Macerate.

The prize for investing boldly in design is that customers are prepared to pay premium prices for cars that stand out from the crowd. It is already working for Cadillac in America, where GM’s vice-chairman and product-development boss, Bob Lutz, proudly points to waiting lists and above-list-price bids for a couple of the latest Cadillacs, such as the striking XLR. Attractive new designs have even enabled GM to relaunch sales of models in Europe, as design brings Cadillac in from the cold.

The pitfall is that dramatic looks can put off loyal customers and deter many potential converts who just do not like radical design. And complacency or false moves can hurt. VW’s new Golf is technically very advanced, but got off to a slow start partly because it was rather dull to look at and because the company had skimped on the design of the interior. This is odd, since markedly smarter interior design is one reason VW models have been able to command premium prices compared with Fords or Opels in Europe.

All this shows how the car industry is changing. Computerized design and engineering allow companies to try out new looks and designs very quickly. The inten­sity of competition also means that new models have to appear more frequently and be refreshed more rapidly, without consuming vast amounts of investment. Design is a way to satisfy those needs. It does not always make a car company a winner, but you need top-class design now just to stay in the game.


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  March  2005 / No. 34