In today’s luxury automotive sector Porsche is one of the most influential and successful brands on the market. This is due to its long history of excellence, its achievements in motorsport, and the overall status that the brand has reached.

But there is more to it. On the marketing side, in the last 30 years, the company and its decision-makers’ ability to anticipate and likely influence massively important trends are not only what saved it in the 90s, but what pushed it even further to become the powerhouse it is today.

TIKTOK AUDIENCE BY AGE GROUP IN THE US (2020)

*Source:Statista

This data, along with controversies and security concerns surrounding TikTok, despite indicating the presence of a sizable audience even in higher age brackets, is likely one of the factors that stopped many automakers in the luxury niche from entering the app.

These numbers did not go unnoticed anyway as Instagram, as it did before with Snapchat and the Stories, just rolled out a new feature. The Reels. These 15-30 second full-screen swipeable videos are pretty much an exact copy of what TikTok is all about. While this worked before, it still remains to be seen if Facebook through its “younger” Instagram will manage again to pull this off.

HOW IS THE COMPETITION ON SOCIAL MEDIA?

Below are the graphs that show the following and engagement for all the major companies in the luxury and luxury performance market niche.

INSTAGRAM

WECHAT

LINKEDIN

YOUTUBE

FACEBOOK

TWITTER

WEIBO

It must be noted that especially when it comes to engagement data, the results can be affected by the specific time of the year, such as this one which includes the holiday period.

Nonetheless, if compared with the graphs reported in my previous Social Media Analysis from March, some interesting insights emerge. First the growth difference between platforms. Facebook for example presents an average following growth of 1.4% in almost 1 year, while YouTube and Instagram have grown on average by 16.8% and 10.5% respectively. The growth on LinkedIn reaches a shocking 48.7% on average. Of course, the absolute numbers have to be taken into account. Numbers on LinkedIn for instance are massively inferior to those on Instagram, which makes a 10.5% audience increase even more impressive.

The balance in the competition remains mainly unchanged on platforms with “clear winners”, but overall, brands such as Aston Martin that so far had a smaller following are closing the gap.

So, what about Porsche?

Porsche maintains a consistent presence on all the major social media platforms, leading the way on several of them or being a close second. But let’s go a bit more into details.

As mentioned at the beginning of the article, Porsche looks to be always two steps ahead of the rest, setting trends instead of chasing them. One way to do that, in this case, is gaining exposure with the right demographic. A young one that will eventually grow up becoming a future potential customer base. As it happened with motorsport gaming before. Right now, the two platforms to achieve that are definitely Instagram and TikTok.

INSTAGRAM GLOBAL AUDIENCE BY AGE GROUP (2020)

*Source:Statista

Since March, in fact, Porsche’s largest following increase, except for LinkedIn where the company page has just exceeded half a million, is on Instagram. Its Instagram profile has grown by 15.5%, so way above the average, and topped only by Koenigsegg with +21.8% which anyway started too from a much lower basis.

Secondly, Porsche is the second company of the ones analysed here to join TikTok. With the other, arguably not casually, from the VW Group too. Lamborghini opened an official account on October 30th, 2020, and Porsche entering too on November 16th.

On most platforms, posting frequency does not have statistical significance in relation to engagement or following. For YouTube though, where Porsche does not have the biggest channel but has by far the highest number of videos, a linear regression shows a strong positive correlation between content published and engagement.

Finally, in terms of content, Porsche's recipe for success is a unique mix ofStorytelling, motorsport, ranging from GT Endurance Competitions to LMP Competitions, Clients’ Racing, automotive heritage, Formula E, and, of course, Electrification, whose popularity is growing massively today. This is properly developed tuning the message and the delivery according to each platforms’ characteristics.

*Source:Porsche

 

Additionally, a relevant factor is the positive coverage the brand receives from third parties and motor journalists. Started in 2013 with the 918 Spyder and continuing today with records and big achievements. Whether is some good review from Top Gear’s Chris Harris, the outstanding series of drag-race records on Carwow (one of the largest automotive-related channels on YouTube), or praise coming from other online personalities. It all contributes to strengthening the brand reputation as one of the top performers in the world and constantly at the top of the game.

Porsche enjoys the fruits of bold steps taken in these last 30 years and that continues to take today. And it does that while celebrating its long history, not only through its iconic design, that with 911 is arguably the most consistent in the industry, but also through a constant marketing work. It is evident also the focus on a younger audience and fast-growing platforms, which often coincide. This translates into Porsche’s constant presence on Instagram, LinkedIn, and YouTube, as well as the recent entry on TikTok.

This daring and forward-looking strategy gave it a competitive advantage that is well reflected in its social media presence, and that no one else can quite match. Taycan and its upcoming siblings are only the last ones on a long list, so far.

Despite the pandemic and the many difficulties for automotive manufacturers, 2020 has been a year full of surprises. Numerous limited series or few-offs, as well as one-offs and highly anticipated new production models, have seen the light. But the last one to come in the year is a special one for many reasons. I am, of course, talking about the McLaren Sabre.

Let’s see something about the car, why it is special and why is relevant for McLaren’s marketing.

*McLaren Sabre, Source:Top Gear

First of all, it is a highly limited series. Only 15 units will be produced and will go for well over $3 million each, also every car will be completely different from the others as far as personalisation goes. The car in fact is not a production model, but it is a Bespoke Commission by McLaren MSO (McLaren Special Operations). To make the project even more interesting, the Sabre has been heavily influenced, even started, by a group of high-profile American clients that approached McLaren with a proposal.

Secondly, it is the most powerful non-hybrid McLaren car so far. The Twin-Turbocharged 4 litre V8 engine produces, on this, 824 bhp and 800 Nm of torque, making it more powerful than the Senna where it “only” produced 789 bhp and Elva’s 804. Above this number, there are only the two hybrids P1 and Speedtail which complement their internal combustion engine with electric motors to get 903 and 1035 bhp, respectively.

McLaren has not shared much about performance details so far. It is known though that the car is developed on the Ultimate Series platform, which includes, Senna, Senna GTR, Elva, and Speedtail, with around 70% of new components unique to it. It is road-legal, it can reach 218 mph (350 kph), which makes it also the fastest two-seater McLaren.

Third, there is the looks. No McLaren really passes unnoticed. Even the more tamed GT still has a unique presence. But with Sabre, MSO pushed the boundaries even further thanks to the fact that the car is specific for the US market. McLaren had to homologate the car just for the US Federal Standards. Thus, they were able to make aesthetic choices both outside and inside that would have not been allowed if the car had been developed for the global market.

*Details of Wing Mirror and Central Panel developed according to US Standard only

WHAT DOES THAT MEAN FOR MCLAREN MARKETING?

So far, McLaren except for the X-1 released in 2012, has never produced one-off or few-off models like this. While the X-1 received mixed opinions though, just 8 years later, the Sabre not only got massive attention and media coverage, but it was an overwhelmingly positive one throughout every platform on the internet.

*One-off McLaren X-1

Also, while the company has developed several highly limited series, the level of clients’ involvement, in this case, is unprecedented. It represents a crucial milestone for a company in this market space, as only a one-off project developed in a similar fashion would have a higher exclusivity value.

Back around when this project started, head of MSO Ansar Ali claimed that the company had, by then, the necessary infrastructure in place to develop more than one highly bespoke project every year. So, in 2021, this might only be the beginning of a really exciting journey for McLaren Automotive, as the overall number of such multi-million projects within the industry increases. Only this year, before Sabre we have seen Lamborghini SC20, Bugatti Bolide, Ferrari Omologata, Aston Martin Victor, Lamborghini Sián Roadster, Lamborghini Essenza SCV12, Aston Martin V12 Speedster, Bentley Bacalar Mulliner, and Pagani Imola.

This might interest you as well:6 Most significant One-off cars  

For such a young company, McLaren Automotive in 2010 has entered a really competitive space, even with all its motor racing heritage. Over the last decade, in fact, all the major companies have established or greatly enhanced their respective personalisation programs.

The Sabre was developed by MSO under the Bespoke Commission program. This is conceived to enable a constant and close relationship with the clients commissioning the car. They have been involved from the early stages of design, being shown the clay model and, in some instances, even affecting the process with suggestions. This process, according to Global Bespoke Commission Manager Neil Underwood led to a proper track test of the camouflaged prototype. An experience that is usually reserved for industry workers only.

*Camouflaged McLaren Sabre, Source:Top Gear

This unique customer journey creates a personal experience, which is arguably the strongest tool to inspire clients’ loyalty and elevate the brand’s reputation. For these reasons, this is a significant step forward for McLaren after a difficult period, and it makes the future of the company as well as the competition in the market niche even more exciting.

“The new era has officially begun” reads Aston Martin's announcement of its Formula 1 Team Title Sponsor Cognizant, a provider of digital products and services. The new partner will not just have a sponsorship role, but actively contribute to the F1 Team infrastructure development.

*Source:Aston Martin Media

As this strange 2020 draws to a close, I thought it would be fun and fitting to review the best social media marketing campaigns and different approaches used by the luxury automakers over the Christmas period to either celebrate the holidays or give an outlook on their 2020.

1. THE CHRISTMAS GIFT – LAMBORGHINI

As usual, by now, Lamborghini publishes the most successful Christmas-themed video of all. It is called The Christmas Gift, quickly approaching 6 million views in around two weeks on YouTube and over 14 million on Instagram.

The ad perfectly captures the spirit of this year’s holidays spent, in the majority of cases, away from friends and loved ones. Even so, and almost without showing the car Lamborghini manages to convey the most important values of its brand. Passion and love for the thrill of driving.

Much like the two campaigns released in previous years, this one has been received enthusiastically.

The same video, in fact, is already the second most-watched on the recently created Lamborghini official Tik Tok Channel with over 3 million views. Lamborghini being the second company in the space after Mercedes Benz to enter the platform and shortly followed by Porsche, while all the others

2. BENTLEY TAKES ON A VERY SPECIAL COMMISSION – BENTLEY MOTORS

This is in my opinion the smartest and funnier Christmas ad published by a brand in the luxury performance niche this year.

Bentley receives a commission for its flagship Flying Spur by Santa Claus himself. The video featured in the latest article about Bentley Marketing Strategy involves not only Product and Design managers, and a Mulliner’s specialist (Bentley’s personalisation division), but also showcases some high-end bespoke features and craftsmanship capabilities. 

The ad got a good reception on other platforms as well. On Instagram instead, Bentley has started a series of holiday-related posts under different hashtags both through @bentleynewsroom and the official page @bentleymotors to promote winter initiatives like #BentleyFestiveTour, #12DaysofBentley, and the challenge #BentleyFestiveLights.

3. A MESSAGE FROM AN F1 TEAM TO THE OTHER - MCLAREN

McLaren’s initiative has also been received with praise on every online platform even though it was not through its automotive company channel but via the official McLaren one. The company from Woking used its most powerful channel right now, the Formula 1 team.

Building on the 2020 season’s success and the extreme popularity of its drivers among the sport’s enthusiasts, the Formula 1 team published a video sending Scuderia Ferrari the Christmas wishes along with a gift. Formula 1 driver Carlos Sainz, who will be joining the Scuderia next year after two successful years in McLaren.

This has been one of the most captivating social media initiatives not only in the automotive space but also in Formula 1 as a great example of the values that move and shape the sport. So despite not being dedicated to fans or enthusiasts but specifically to a Formula 1 team, I thought it definitely deserved to be mentioned here.

Another interesting campaign is the 25 Days of McLaren published on Instagram and Twitter under the hashtag #25DaysofMcLaren. A series of short videos published once per day and leading to the 25th of December inspired by the Christmas Carol 12 Days of Christmas. Each one is a throwback to an important moment of the company’s year, remembering achievements and important successes in this difficult year.

4. DRIVE DEFINES HER AND THE 12 DAYS - PORSCHE

Porsche has published the first episode of what will likely be a series celebrating gender diversity(and maybe more) not just among automotive professionals but also its customer base through different professional paths. Drive Defines Her.

This first video features Nayla Al Khaja. She is the first female director and producer in the UAE, who also manages a production company a film Club in Dubai. Al Khaja is also active on social media and events as an influencer.

This is a sensitive topic that will resonate differently from more conventional automotive ads with its audience. However, it is an important statement on this topic.

Finally, much like McLaren and Bentley Porsche too had its own 12 Days of Porsche published on Twitter. A video each day featuring real music and Porsche-related lyrics.

5. A LOOK BACK AT 2020 - FERRARI

On December 23rd Ferrari released a video revisiting the main events of its 2020. It is an interesting piece of content to appreciate the variety of activities within the Ferrari Business and Marketing Strategy as well as the help offered to the community during the pandemic. E-sports, GT competitions, new models, merchandising, museums, the respirator valves, Formula 1, and more.

AN HONORABLE MENTION - MERCEDES

This is not listed among the others because along with a few ‘more traditional’ posts on social media, the piece of content in question has not been published on the major platforms and is dedicated to a specific demographic. The people working in the media.

After this difficult year, Mercedes with this short and “light-hearted” video published on its website celebrates the effort of the professionals involved in the industry who kept working to bring news and information about their products during these times.

Definitely an interesting point of view that no one else expressed.

Which ad or campaign was the best this year? Share your thoughts and comments below or on social media!
In the meantime, I hope this was a light and fun read.
Best Wishes of a Happy New Year!

Bentley is undergoing some important changes. Bentley’s marketing strategy has to complement its message with that of the parent company which is itself going through an important transitional period.

So, let’s see what is happening and how the company from Crewe has structured its marketing.

BENTLEY CORPORATE: MANAGEMENT CHANGE

It is just of a few days ago the confirmation of the news from October that claimed the British marque would have passed under the management of Audi. In the context of VW’s Together 2025+ Strategy aimed at developing a strong focus on electric mobility and the group’s competitiveness in the future automotive industry, it is crucial for the German manufacturer to exploit and further develop the synergy already established between its luxury brands. This is important also toward the second target of the business strategy which is efficiency, fixed and materials cost reduction. Audi and Porsche share a significant amount of components with both Lamborghini and Bentley.

*Source:Volkswagen

In recent weeks, the Italian luxury performance automaker has made the news twice. Once for the release of the latest Huracán iteration, STO (Super Trofeo Omologata), and another time for the appointment of Stephan Winkelmann back at the wheel of the company, after his predecessor, Stefano Domenicali left to become the new Formula 1 CEO.

Is Lamborghini embracing electrification or keeping its production models unchanged?

LAMBORGHINI MARKET COVERAGE

Right now, Lamborghini is focused on the supersport segment, with three of its models, the V10 and V12 Huracán and Aventador. The production models come also in different degrees of sportiness with more track-focused versions like Huracán Performante, the aforementioned STO, and Aventador SVJ. Only in 2018, the company added to its lineup the now extremely successful Urus, which is positioned in a more daily-drive-oriented segment.

LAMBORGHINI LINEUP CUSTOMER PROPOSITION VALUE

*Each Huracán, Aventador and Sián model have a Roadster or Spyder version

It is quite common now to see luxury performance SUVs by almost every company in the segment. In big cities, where the market is significantly developed, they are not even a particularly special sighting, considering the overall sales numbers. The last one to join the pack is Ferrari with the upcoming Purosangue (Italian for Thoroughbred) after Aston Martin’s DBX.

Separate from the group and forging its own unique path is McLaren. Should they reconsider and start the development of their own SUV? Is it too late? Or there’s simply more to it?

MCLAREN’S CURRENT SITUATION

Last week McLaren published its Q3 report for the year. As the world recovers, like other luxury performance automakers, McLaren too registered some positive signs. By the end of Q3, the automaker delivered 897 vehicles, a sharp decline from the 3306 of 2019. But, considering how its key markets were hit more heavily during Q2, the 313 units delivered in Q3 show some timid hints of recovery.

In its first steps toward the Track2025 Strategy, McLaren recently teased the upcoming Artura. The brand’s first production hybrid V6car is coming in the first half of 2021. This combination is becoming more popular as a consequence of the more stringent environmental regulations. Aston Martin is doing it with Valhalla and the future Vanquish Vision. Ferrari has teased for a while a V6-powered product line too.

*Image teasing the new Artura byMcLaren

Nowadays, the creation and development of a true comprehensive brand experience are two of the most important factors in an Automotive Manufacturer’s strategy. Throughout the decades the objective of creating a car that would simply fit the largest number of potential customers has significantly shifted. In the luxury performance automotive segment, the objective was never to mass produce to accommodate the highest number of clients possible, but similar trends shift are developing nonetheless. Building a beautiful product, capable of outstanding performance is not enough anymore to ensure customer emotional involvement and loyaltyas highlighted by Mr Carlo Bonzanigo, Senior Vice President Business Unit Design at Pininfarina.

The big new challenge is then creating a real ecosystem of experiences and values that fulfil the clients’ needs and that they can identify with. Only this effort creates additional value that can give a solid competitive advantage over other OEMs. From here the necessity of developing a multichannel strategy to accompany every valued client through steps, or touchpoints, toward the purchase and beyond.

So, what caused this change? How has it translated into practice so far? And where does the industry go from here?

FOUR FACTORS AND THE MARKET CHANGE

In the early 1990s, the fundamental way to market vehicles changed due to major transformations in the global economy. This change in the mass market naturally reflected on the high-end segments too.

Four are the major factors that caused this shift.

• Reduced Market Homogeneity. This change started early on as social class divisions, income inequalities, lifestyles, and age created fragmentation. This created numerous niches that were unlikely to be covered by a single company with one or a few products.

• Limits to Mass Production Process. Efficiency initially obtained through stable inputs, production process, and outputs. The capacity for mass production started to decline as Labour costs and raw material prices lost stability due to reduced productivity in the 70s. At the same time, the mentioned increasing fragmentation commanded more flexibility, which further limited the mass production capacity. Finally, oil crises in the 70s and 80s affected the demand and subsequent production output that was previously kept in check through stock manoeuvring (Pine & Gilmore, 1997).

• Instability of Demand. Two variables were the major causes of the loss of stability and predictability in demand. One was the market saturation that gave more bargaining power to the customer. It meant a shift from a sellers’ market to a buyers’ one making it more difficult to predict the future preferences, demand direction, and volume. The second was improving technology which simplified the production of higher-quality components or made the design and production of a wider variety of products cheaper.

• The Internet and Globalisation. Globalisation along with the possibilities opened by the internet, and the marketing based on big data created a desire for uniqueness and the opportunities for companies to segment, target, and satisfy extremely specific requirements. Within the Luxury Performance Automotive sector, this translates into the ever-expanding range of services offered by each manufacturer in the niche. It is not a case then that just in the last decade all the major luxury automakers greatly enhanced their personalisation services as analysed in Tailor-made: What luxury car customers can't go without. Aston Martin’s Q, Bentley’s Mulliner, Ferrari Tailor-Made, Lamborghini’s Ad Personam, McLaren’s MSO, Porsche’s Exclusive Manufaktur, and Rolls Royce’s Bespoke.

These conditions ultimately caused the shift from a Mass Production to Mass Customisationmarket (Pine & Gilmore, 1997). With digitalisation also, the key question in this market becomes: How is selling mobility services different from selling vehicles?(Candelo, 2019)

FRAMEWORK

To define the Customer Journey, a popular tool is the Customer Journey Map. It can be developed in many different ways and can go very deep into details or be more generic. There is no right or wrong answer here, as the rules and steps to follow can vary greatly from industry to industry and even from company to company. Within the same market segment are still numerous other factors that can require framework differentiation. For example, different KPIs, different services range and width, marketing mix extension, slight differences in target customers, and so on. The key factors to control and develop the map and business on are the touchpoints.

Ferrari Marketing mix gives a good indication of the kind of customer service and touchpoints strategy a company needs in the luxury performance automotive industry. Each contact with the customer has to be anticipated, and every problem addressed creating a seamless experience.

This doesn’t happen by accident; it happens by design. As is often the case in life, making something look easy is very difficult –Harvard Business Review

The mapping process starts with the client’s persona definition, involving marketing psychology analysis. Once this first phase is achieved, each step of the journey is developed with a precise target.

Here is an example of a Customer Journey Map for a generic luxury automotive manufacturer. Naturally, as mentioned previously, each company would apply specific strategies, KPIs, and touchpoints. Maps like this can become much more complicated as each service is outlined and constantly updated. So, this is a simple but broad enough template.

*Click or tap on the image to enlarge

It is known that in the luxury automotive world Ferrari has such a unique history that very few come close. This strong identity reflects as well on its business model and its marketing mix. So, let’s dive in and see what and how many are the characteristics that make Ferrari one of, if not the most powerful brand in the world.

ABOUT THE METHOD

Marketing Mix is defined as a set of controllable marketing factors that a firm blends to produce the response it wants in a target market (Kotler & Armstrong, 1989). This article adopts the Booms and Bitner’s 7Ps (1981) instead of the classic McCarthy’s 4Ps (considered too simplistic) through Rafiq and Ahmed (1995) Marketing Intelligence & Planning approach. The model defines the marketing mix as Product, Price, Place, Promotion, Participants, Physical Evidence, and Process. Their research elevates the analysis method from its initial specification for service-based businesses to a generic marketing mix model. Levitt (1972) also supports the approach by claiming the 7Ps framework is adopted because to some extent everybody sells intangibles, so everybody delivers services. Ferrari's business model reflects perfectly these claims as well as Rafiq & Ahmed's thesis. First as automotive is a sector that requires a high degree of service. Second, a luxury brand such as Ferrari, has a short distribution channel which is strictly under control and following specific guidelines ensuring that the service and its quality are on-brand. The immediate recognisability of its Ateliers is one example.

Finally, for the same reasons, Goldsmith’s 8th P (1999) is also applied to this article, as the factor outlining market segmentation and product Personalisation that is increasingly important today, especially in the luxury segment. And automotive is no exception.

PRODUCT

Ferrari has a strong and varied product line that has been expanding at an unprecedented level in the last few years. During the last decade alone four products for different market segments were added. First the 4-seater luxury shooting-brakeFF substituted by the GTC4 Lusso in 2017. Then the hybrid SF90 Stradalethat applies the electric component in a different way from what the LaFerrari used to do, but most of all is a proper production model, not a limited series, and is sold for less than half the price of the LaFerrari. A completely new line called Icona and aimed at celebrating the classic beauty of older Ferrari models reinterpreted in a modern way introduced the speedster Monza SP1 and SP2. Finally, the new, understated and elegant 2+ GT Roma competes with a different range of Grand Tourers from those against Portofino and GTC4 Lusso.

FERRARI LINEUP CUSTOMER PROPOSITION VALUE

*This chart does not include the track-only models like 488 GTE, 488 Challenge Evo, and FXX program ones
**SF90 Stradale, Portofino M, 488 Pista, 812 Superfast all have a convertible version not represented here

All the models are high-performance, and with this range, Ferrari reaches a significant market coverage that extends its competition to every company in this segment. Additionally, new Limited Series, an SUV (Purosangue)that will likely substitute the GTC4 Lusso covering and possibly extending that market segment, and a new V6 powered line have been announced too.

The features are several and mainly found on the luxury-oriented models more than on the pure sporty ones. Options are plentiful on every single vehicle of the range in terms of specifications. Quality, of course, needs to be the best possible considered the market segment and to support this a 7-year warranty is includedwith every new car.

Along with its car range, Ferrari also sells luggage sets matching the cars’ specifications and an increasing number of lifestyle and apparel items in partnership with luxury brands.

Finally, the three most important features to include in this analysis: Design, Performance, and Brand, as shown in my more extensive Research and reported in my previous article McLaren and Ferrari: matching product diversification strategies?

Design is a matter of pride for Italian manufacturing and automotive which have historically been a distinctive feature, and still are. Beauty is another factor that cannot be overlooked in the slightest and always distinguishes Ferrari. The same goes for the performance, which is always at the top of its segment for every model, right beside its competitors. As for the brand, Ferrari has been declared byBrand Finance the strongest one in the world for two consecutive years, and it is confirmed by the survey among luxury and supercar owners I conducted for the research linked above.

PRICE

The price positioning is always at the very top of the market with rates varying, in the UK, between £164,000 and £376,000 for the production models before options that can bring that price up by well over £50,000 as discussed in the in-depth on Tailor-made services. The highly limited series like the Icona Monza SP1 and SP2 sell easily for over £1 million.

*In order the cheapest Ferrari Portofino, the most expensive production car SF90 Stradale, and the Icona Monza SP1

Perceived value is clearly a crucial component of this market for collectors, investors, and the brands themselves. Ferrari, in fact, leads the market by maintaining a strict production number control to avoid overproduction that would dilute the brand and the pre-owned market value.

Avoiding depreciation is paramount for these brands to maintain their appeal (Aston Martin's de-stocking effort is emblematic in this respect) and the cars' resell value. The whole niche is worth millions.

Payments are usually received 30 to 60 days after the new car delivery, but limited series and special editions are handled differently. Invitations to get a purchase slot are sent only to the highly valued clients which usually happen to pay in advance for the most sought-after limited edition models.

PLACE

Ferrari sells through a network of 166 authorized dealers. They are carefully located either in areas with a higher density of high-net-worth individuals or in ‘cluster areas’ where other luxury automotive dealerships are located. London’s H.R. Owen in Mayfair is a prime example.

LONDON MAYFAIR LUXURY DEALERSHIPS AREA

Along with the dealership network, special access and services are granted to Ferrari clients at the Headquarter in Maranello too.

PROMOTION

Ferrari has a unique mix of promotion channels and a high level of diversification. This is arguably the aspect that distinguishes it the most from any other brand in the market segment.

First comes motorsport and above all, Formula 1. Ferrari was born as a motorsport manufacturer which only later expanded into luxury road cars. So, while owning a Formula 1 team translates into important developments and new technologies that can be trickled down to the automotive business, it is most of all an outstanding marketing channel. Especially if it is the most winning team in the sport’s history, in these years in which Formula 1 popularity increases and E-sports are booming attracting countless new enthusiasts.

Ferrari organises a range of eventstargeted to enrich the experience of clients who enter the brand and improve the loyalty of the existing ones. It offers a wide range of exclusive activities from gala presentations and driving experiences, to driving courses to proper racing championships and track days.

Among the motorsport-related events there are the single-marque championship Ferrari Challenge, the Corso Pilota offering owners professional driving lessons divided by increasing level of skills, and finally, the Corse Clienti project divided into the XX and the F1 Clienti programmes. The XX is organised throughout a series of track days in the most iconic racetracks in the world for which Ferrari sells extreme and highly limited track versions of its most iconic models. It then ships the cars (which are not directly held by the clients) to the designed location and provides engineers, mechanics, and physiotherapists to manage everything from the setup to the drivers’ well-being.

*Ferrari 488 GTE, Ferrari FXX-K Evo, Formula 1 2019 SF90

The F1 Clienti allows Ferrari's clients to directly buy previous seasons' Formula 1 cars from the Scuderia and drive them in proper track days organised by the company. Along with the track activities Ferrari also arranges gala dinners and cocktail parties for all the participants.

Moving into digital marketing, Ferrari applies also a really comprehensive strategy across all the major platforms available, and some more experimental solutions such as the ‘We Race’ digital comic.

Finally, Museums(in Modena and Maranello) and Amusement Parks (in Abu Dhabi and Spain) serve as brand promotion that similarly to digital marketing, not only strengthen the company’s image but also involve the audience of enthusiasts that do not necessarily have access to the luxury market segment.

PARTICIPANTS

The services offered by the brand are numerous and direct contact with the customer happens in various ways. It begins before the purchase. Specialised employees guide the clients through the countless options to specify their own car, giving advice on the best combinations. The customer is then kept in the loop with successive communications on the car assembly work. These and other activities as a whole, define the customer journey in a very unique way.

After-sales expert members of the dealership network take care of car servicing and in some cases of organising exclusive events as mentioned above. Direct contact with owners is maintained through other initiatives too, like Ferrari Classiche, the specialised program to preserve the beauty and integrity of classic models.

Also, as it should be in 2020, Ferrari clients have access to the MyFerrari app which is a further exclusive connection with the brand to enrich the ownership experience. The app includes a configurator, information about the owner’s cars, Ferrari specialised events and presentations as well as direct contacts with dealerships and assistance.

At all times, dealerships employees receive training according to the company’s standard and are committed to promoting and marketing Ferrari in a manner intended to preserve the brand integrity and to ensure the highest level of client satisfaction.

PHYSICAL EVIDENCE

Ferrari’s presence has a strong and recognizable corporate identity. As of now, the dealership network is not owned by the firm but managed through licensing and franchising agreements with clear guidelines in terms of employees’ appearance standards, facilities, layout, and interior design finishes.

The three photos below are from dealerships in different cities but clearly present a very coherent and uniform image.

*DealershipsFerrari Salt Lake City, H.R. Owen Ferrari London,Ferrari of Miami

Dealerships are also equipped with lounge rooms for clients to physically spend time during the purchase process and experience some relaxing time in a refined environment. Every facility is maintained to the highest standard in order to reflect the brand identity.

PROCESS

The process description partially overlaps with that of the Participants outlining how the customer is guided through the purchasing journey and followed after it.

Overall, the production process alone can take between 30 and 45 days as the cars production rate is relatively low and, as said, the overall production number is strictly controlled. The main reason though is that the manufacturing process is mainly carried out by hand by expert artisans and engineers. This part of the process itself adds significant value to the finished product.

This is also the reason why, in the pandemic period, potential supply chain disruption, discussed here How Covid-19 will affect the luxury automotive industry, could become even riskier for low-volume luxury manufacturers. Also, with the lockdown periods during 2020, different measures have been put in place for clients and prospects to get in touch with the brand. Video content is an important component for instance with pre-owned cars as often customers cannot be shown the car in person.

PERSONALISATION

Last but not least, the defining feature of luxury spending in many different industries, personalisation. Introduced already in the 50s and expanded throughout the years, it reached the pinnacle in 2011 with the introduction of the Tailor-Made Program.

The personalisation service is now divided into three levels, ‘Personalisation Program’, ‘Special Equipment’ and the mentioned ‘Tailor-Made’which offer an increasing level of detail and variety of choices, along with higher care by Ferrari designers. Additionally, Tailor-made also offers three distinct collection guidelines named Scuderia, Classica, and Inedita that take inspiration respectively from the racing heritage of the brand, from the more classic GT combinations, and from new and innovative solutions.

Last but not least, the defining feature of luxury spending in many different industries, personalisation. Introduced already in the 50s and expanded throughout the years, it reached the pinnacle in 2011 with the introduction of the Tailor-Made Program.

The personalisation service is now divided into three levels, ‘Personalisation Program’, ‘Special Equipment’ and the mentioned ‘Tailor-Made’which offer an increasing level of detail and variety of choices, along with higher care by Ferrari designers. Additionally, Tailor-made also offers three distinct collection guidelines named Scuderia, Classica, and Inedita that take inspiration respectively from the racing heritage of the brand, from the more classic GT combinations, and from new and innovative solutions. 

This allows clients to create virtually endless bespoke combinations of materials, colours, and finishes. Specifications include also interior functional components such as sound systems and sports exhausts as well as the aforementioned accessories like luggage sets.

*Tailor-made Ferrari Portofino

Overall, when it comes to the marketing mix and diversification strategy, Ferrari represents probably the most impressive example within the luxury segment. So much could be added that twice the length of this already long article would most likely not be enough. In the meantime then, if you are interested in going more in-depth contact me via social or email at riccardo.delbello@rccdbcars.com to request a copy of my Ferrari Brand Market Potential Analysis.

 

Sources:

Goldsmith R., 1999, The Personalised Marketplace: Beyond the 4Ps, Marketing Intelligence and Planning, availableHere

Rafiq M. & Ahmed P., 1995, Using the 7Ps as a generic marketing mix an exploratory survey of UK and European marketing academics, Marketing Intelligence and Planning, availableHere

In the latest press release published by Aston Martin, the automaker announces its report for Q3 of 2020 along with the renewed partnership with Mercedes-Benz AG through a new strategic technology agreement and new financing.

The new agreement stands on the one established first in 2013. Since Lawrence Stroll became one of the major investors in the company and Executive Chairman, there has been a significant restructuring within the company. The main step has been the appointment of a new CEO substituting Andrew Palmer, previous Mercedes-AMG CEO Tobias Moers. If you would like to know more about him, what he has done so far, and the changes in Aston Martin you can check my previous article New Aston Martin’s CEO: Who is Tobias Moers.

According to the press release, the main targets stemming from this new arrangement are the production of 9000-10000 vehicles by 2025, revenue of £2 billion, and Adjusted EBITDA of £500 million.

But how is Aston Martin planning to achieve all this?

1. UPDATED FINANCIAL PLAN

Aston Martin will issue £125 million of new ordinary shares, plus £286 million of Consideration Shares to Mercedes-Benz, so-called in the document as part of the agreement for the technology the German automaker will provide. Such shares will be issued in tranches along with the delivery of the promised technology upgrades, with the first coming by the end of 2020 already, the second by early 2022, and the remaining within early 2023.

With Mercedes increasing its stake in Aston Martin, it will have the right to nominate a non-executive director of the Board initially. Later, with the shareholding reaches 15% and above they will have the right to nominate a second one as well.

Along with these measures, debt financing will be raised too through a first lien note issue for £840 million with 2025 maturity, a second lien one for £259 million maturing in 2026, and an £87 million revolving credit facility with 2025 maturity.

Both equity and debt issues should strengthen business resilience and support its growth strategy.

2. NEW MERCEDES-BENZ TECHNOLOGY

With the new Strategic Cooperation Agreement, Aston Martin for its new generation planned up to 2027 will have access to the latest conventional, hybrid, and full-electric powertrains, “State-of-the-art”electric/electronic (E/E) architecture, hardware, and software.

*Current Interior of a DBS Superleggera Volante equipped with Mercedes previous generation infotainment

This could be a big deal, since, under the current agreement from 2013, Aston only had access to the older generation of Mercedes’ electronic components, which is something that some customer seemed not enthusiastic about. The fact that now Mercedes has a much more relevant economic interest in the company and the transferred E/E technology is defined as state-of-the-art, could indicate that the latest component will be used by the British automaker too.

A second hint about this, and its importance stressed multiple times within the press release, is that this technology transfer will drastically reduce Aston Martin’s risk. Avoiding in-house E/E components production, all its resources will be focused instead just on new vehicles’ development and other areas of the business that contribute to making the car unique to the brand.

*Source: Aston Martin Valhalla Interior, Source: Aston Martin Media©

3. DEALER NETWORK DE-STOCK AND Q3 IMPROVEMENTS

As mentioned in previous articles, part of the updated strategy and renewed business model was the dealerships’ de-stocking in order to balance demand and supply and reposition the product line as that of a true luxury marque. 

ASTON MARTIN RESULTS FOR THE 9 MONTHS TO 30 SEPTEMBER 2020 (£ MILLION)

Despite the negative financial results, especially if compared to 2019 which was already a tough year for the company there are some factors to highlight. Naturally, the major cause of disruption in 2020 is Covid-19, and as the numbers of infected increase in many countries, it could still seriously worsen the market condition in the last quarter. Nonetheless, there are positive signs. First of all, the significantly lower wholesale volume, compared to 2019 both in the YTD and Q3 columns, are due to an effective de-stocking that reached over 1400 vehicles. So, a ‘necessary evil’ in this case.

Then, some national market improved more than others. Compared to Q2, China in Q3 experienced a +29%, which even starting from a low basis is still a noteworthy result. Third, even with the overall negative result, Q3 was an improvement over Q2. Of the total de-stock, 567 have been delivered just in Q3, which represented an acceleration, and operating loss was also lower than in the previous quarter. Finally, there was considerable debt reduction.

4. DBX

It has been said many times now that the SUV DBX is extremely important for Aston Martin. As of now the St. Athan plant, which has been created exclusively for the production of this vehicle (as further proof of its importance), has reached the full rate of production again. Also, in the press release CEO Tobias Moers mentions a “quality-led ramp-up as appropriate for our luxury product positioning”. 

ASTON MARTIN SALES BY MODEL CATEGORY IN 2020

The YTD column shows GT is the most successful category in Aston Martin line-up both in 2019 and 2020. But in Q3 DBX was by far the best-selling model with 345 units alone. This figure confirms the ‘solid order book’mentioned previously by Mr. Stroll and represents a positive outlook for the coming months.

5. NEW DELIVERY PLAN

After de-stocking, Aston Martin will implement a “disciplined production to order to generate a margin more aligned to the luxury automotive segment”.

The production target set for 2025, will include front-engine, SUV, and mid-engine vehicles. The newly introduced mid-engine line already counts Valkyrie which will be delivered from half of 2021, and Valhalla set to arrive in the near future as well. A third production model that should not be limited will be the Vanquish Vision presented at the Geneva Auto Show 2019.

The SUV line could be expanded as wellwith other models complementing the new DBX. Hybrid powertrains will account for 20-30% of Aston Martin production by 2024 and the first full-electric should arrive no earlier than 2025.

6. ASTON MARTIN FORMULA 1 TEAM

Lawrence Stroll’s F1 team Racing Point (already powered by Mercedes engines as well) will go under the Aston Martin brand from the 2021 season. This move will bring significant benefits to the automotive business with a rare model that just Ferrari and McLaren have enjoyed so far.

A successful Formula 1 team represents a powerful marketing tool, and the support by Mercedes, which has dominated the turbo-hybrid era of the sport, surely gives a relevant advantage. Additionally, from next year, 4-time World Champion Sebastian Vettel will join the teamtoo bringing with him his strong popularity as 

one of the most successful and respected drivers in the sport’s history.

The second, but potentially even more important, benefit of a Formula 1 team activity is the technology transfer that will be available for the automotive business’ mid-engine vehicles directly from the racing cars. This is something that has happened for quite a long time now, and with the new FIA regulation coming in 2022 new innovations could stem from it.

 

Aston Martin F1 Livery Concept, Source:Sean Bull Design©

 

OUTLOOK

The comprehensive plan and the closer ties with Mercedes, which has been extremely successful in the last few years in many automotive segments, look like the best recipe to reposition the brand, shield its products from depreciation and ensure sustainable growth and innovation aligned with the current market changes.

However, after a partial recovery, there is still much uncertainty around the Covid-19 progression, with various countries re-establishing restrictions and lockdowns. A second drop in sales and financial markets confidence is plausible, and while on one hand, the consequences could be even more severe than the ones experienced before, on the other some effects are now already known, and serious infrastructures and measures are already in place. Overall the outlook should be cautiously optimistic.

The Heist is Porsche’s video released at the beginning of 2020 and it is also the most-viewed automotive commercial on YouTube with almost 22 million views reached in a matter of months. The video promotes the new all-electric Taycan in a clever way but does even more.

*EDIT: After reaching over 24 million, the video has been deleted from the company's official Channel

I talked about Porsche’s strategy for its upcoming electric lineup previously and you can find the full article here Porsche EV Development Strategy. The video is not only fun but along with the characteristics of the vehicle, it cleverly shows what the brand is really about by appealing to people’s emotions. It sells a lifestyle in an engaging way.

WHY IT IS IMPORTANT AND WHY IT WORKS?

A research by McKinsey shows Over-the-top services, such as YouTube, have the highest CAGR compared to all the other sub-sectors with, of course, Digital Advertising and Video Games as close seconds. This data clearly shows why efforts in this sector and more and more relevant, and likely to become so even more in the future. For insights on the Video Games industry applied to automotive have a look at the previous article How Covid-19 Turbocharged the E-Sports Racing Industry.

*Source:McKinsey©

There are different factors that contribute to the success of this video. One is its length. According to McKinsey, the habit of consuming ‘bite-sized’ content stems just from platforms such as YouTube or Instagram. The 2:31 minute length of the video results ideal then for major consumption, which is proven by other companies’ videos of similar genre and length performing above the average, while longer ones tend to get less attention.

PORSCHE’S YOUTUBE CHANNEL VIDEOS VIEWS COUNT (IN MILLIONS) AGAINST LENGTH

*The Heist video and two full races videos have not been included in the graph as too far from the average in terms of views and length respectively.

The graph above confirms McKinsey’s data but shows some other interesting detail. For instance, short videos, between 1 and 3 minutes, show a high fluctuation in views figures, from over 10 million to a few hundred thousand (this is partially due to the fact that it is also the most popular type of video), this fork gradually reduces toward lower numbers as the video length grows. Another interesting observable data is that truly short videos below 1 minute instead (at least in Porsche’s case) tend to receive considerably less interest compared to slightly longer ones.

In the same research are described three tools that brands can use to grow and improve customers’ loyalty.

The first is Distinctive content creationthat focuses on specific strategic goals. David Ogilvy considered the Father of Advertising, in his book expresses some similar concepts that can be applied to the modern market. One is “Compromise has no place in advertising. Whatever you do, go the whole hog” (Confession of an Advertising Man, 1963). “The Heist” is indeed built around few visual, well-highlighted points. The car electric powertrain, its performance, and its desirability. As for the strategic focus, it is of course the aim at becoming the leader of the luxury performance EV segment helped by the fact of being significantly ahead of the competition.

The video is also distinctive in the sense that Porsche plays showing characteristics of their car indirectly. From its silent powertrain when it is first stolen from the museum without anyone noticing, to its performance when it is always ahead of the others and is actually the car being chased. They also establish an emotional connection when in the end the characters almost compete to be the next to drive the Taycan.

Most of all though, everything is tied together by engaging storytelling. Even in such a short video, which is what makes it an even greater example, there are unexpected elements and appealing visuals that make the viewer want to watch until the end.

At the same time also, Porsche makes sure to remind us about its status in the automotive world. At the beginning we are shown its beautiful museum, then comes a consistent chunk of its history with the cars selected for the chase. From a tractor Porsche-Diesel Standard 218 to the racing legacy with the 917K in the Gulf Oil livery, and various classic and modern road cars and limited editions, 718 Cayman, 911, GT2RS, 918 Spyder. All come, of course, after the EV Taycan.

The second factor is Content Curation to maximise engagement. The original idea behind the video proves the Porsche team's understanding of its fans and customer base. So it does the rest of its online presence.

The graph here shows clearly how despite not being the first brand in terms of following in his segment, Porsche manages to obtain far more engagement than all the other brands. This indicates knowledge of the niche and a consistent strategy to give the right media experience, which is key as the overall content published online multiplies exponentially every day and it becomes more and more difficult to gain attention. You can also see how the company fares against its competitors on the other major platforms here Automotive Social Media Marketing: Why Lamborghini is Winning.

The third tool regards the gradual consolidation of the media industry, especially regarding online streaming outlets, which gives companies the opportunity to access better data to gain insights about customer preferences and trends. This factor refers to the wider strategy and is thus not applicable to this specific case.

WHAT ABOUT OTHER AUTOMAKERS?

The whole industry is adapting to a finer, more creative, emotionally, and visually appealing online communication.

Within the same market niche, Lamborghini's social media marketing actually gets the strongest results of all on multiple platforms. On YouTube it achieves similar results with its two most successful campaigns called Lamborghini Real Lover and A true Christmas Story for Lamborghini’s real lovers discussed previously here Automotive Social Media Marketing: Why Lamborghini is Winning and now counting respectively 17.9 and 8.1 million views. Despite the different narratives, in this instance, Lamborghini’s storytelling also appeals to people’s emotions epitomising the supercar dream through the children's imagination.

Ferrari is also gradually moving in a similar direction. The best example of this is the video for the latest addition to the lineup, the Roma. In their official video, which is already the second most viewed of their channel, Ferrari presents the whole concept behind the new model through music and suggestive images. This makes particular sense as the model aims at a new market niche previously not completely covered by the brand and well represented here by the ‘La Nuova Dolce Vita’concept.

McLaren does it as well very cleverly and in its own way with the 2019 GT presentation which is too the most viewed commercial on its channel. And replicates original ideas for other models too such as the P1 or the latest 765LT.

As for the other British automakers, Aston Martin brings an amazing example of storytelling with the SUV DBX introduction which probably gets the timing wrong though. The video, in fact, has been published only a few days ago, while the car has unfortunately already been teased, presented, and reviewed several weeks ago.

Finally, at the beginning of the video, I specified that ‘The Heist’ is the most viewed automotive commercial. It is not in fact the most-viewed automotive video. This honour goes to Bugatti’s Chiron 0-400-0 video. I did not include this in my review, as the company has such a selected customer base, with its super-low production volume that the business model and communication are, as a result, substantially different. The video is a pure performance demonstration.

Is probably not a case then that both Pagani and Koenigsegg most viewed videos are performance demonstrations respectively for the Zonda R and Agera RS. The two competitors like Bugatti have a production of fewer than 100 cars per year which all sell for way above £1 million. Along with luxury, rarity, and high prices then, it is engineering at the absolute extreme that has to represent these companies. Of course, fewer resources allocated to online marketing in this case is likely a major variable for these three really small companieswhen compared to the aforementioned luxury automakers.

SOME CONCLUDING THOUGHTS

Porsche as for its EV development shows vision and market knowledge. As online media and virtual entertainment continue to gain traction though, competitors’ strategy aligns with successful content, and the quality level grows accordingly and increasingly faster. This means that more of this and even better can be expected in the future, but also that incoming VR and AR integrations are likely to bring a further leap forward soon.

A couple of weeks back, the news spread about Volkswagen’s intention to sell its top luxury low-volume automaker, Bugatti. What is more surprising is that Croatian EV automaker and tech supplier Rimac has been quoted among the interested parties in the purchase. As many by now suggested though, considering Porsche’s interest in Rimac, the move seems definitely less unexpected.

BUGATTI SALES FIGURES (2005-2019)

In 2019, the company closed with an estimated €253.57 million revenue (Dun&Bradstreet) and a record sales of 82 vehicles. The sales graph shows mainly the lifecycle (so far) of their two main models, Veyron, and the successor Chiron. In the last two years also, the company attracted, even more, the attention of professionals and enthusiasts’ community with the release of the £4.5 million Divo, the £9 million Centodieci, and the £12 million one-off La Voiture Noire, respectively planned for 40, 10 and 1 units.

WHAT ABOUT VW’S DECISION?

Bugatti’s parent company and owner of numerous other major automotive brands, Volkswagen Group has recently gone under a radical management restructuring. Herbert Diess current group CEO, recently replaced as VW brand CEO by Ralf Brandstaetter, has been at the forefront of the efforts to cut costs, especially in these difficult times, to free resources and allow a fast transition to large-scale electrification. In the first half of 2020, VW Group with a 23% drop in sales, has so far reported a pre-tax loss of €1.4 billion.

According to some reports then, selling the luxury marque would be part of this cost-cutting strategy by the German automaker. But because Bugatti’s acquisition was strongly wanted by Ferdinand Piëch, it would not be possible for VW to just sell the marque.

Ferdinand Piëch *Source: Wikipedia 

Especially considering that over 50% of the group is controlled by the Holding Porsche SE, whose 50% is owned by the Porsche-Piëch family at 50%, who however retains 100% of the voting rights.

Herbert Diess *Source:Volkswagen Media©

At the same time, Rimac, the Croatian firm leading the luxury performance electric vehicle niche, has become a major player, thanks to its know-how, collecting numerous partnerships and investments. You can read more about it here Nico Rosberg enters the Rimac Family: Rimac Business Model.

So, in the described plan, Porsche that acquired a 15.5% stake in Rimac in two years, would increase it up to 49% while the EV manufacturer would buy the Bugatti brand which would effectively remain, at least partially under the VW Group. Naturally, this process would need the approval of other important stakeholders such as the Chinese Camel Group that owns a 14% stake.

SOME OBSERVATION

To answer the first question at the beginning of the article, this exchange would not only allow VW to save costs and focus its resources on mass-produced electric cars but would also grant Bugatti a faster transition toward electrification thanks to Rimac.

At the same time, the Croatian manufacturer, who despite the blazing success has so far produced a very low volume of cars, could benefit from Bugatti’s expertise. Considering the differences in values and characteristics between the two brands they would also not risk cannibalising their extremely limited sales.

As for the other companies, Lamborghini, Bentley, Ducati, even the design company Italdesign would all be under scrutiny. However, regarding luxury automotive brands Lamborghini and Bentley, there are three reasons that put these two brands in a stronger and more integrated position compared to Bugatti.

First, both Bentley and Lamborghini share important components of their SUVs, luxury, and sports cars with other VW Group brands. Bentayga and Urus share VW’s MLB Evo modular platform (Modularer Längsbaukasten, German for Modular Longitudinal Matrix) with Audi’s Q and A product lines, VW Touareg and Porsche Cayenne. As for the engines, Urus, Bentayga, Continental GT, and Flying Spur share the 4.0 Litres V8 engine with Porsche and Audi. Additionally, Lamborghini also shares with Audi the 5.2L V10that was mounted in a late version of the Gallardo and on the Huracàn. All these factors not only translate into a significant cost reduction but are even more significant when considering the highest profit margin on each of these cars and the current market trend. The two companies’ SUVs are in fact by far their best-selling models. In both cases, they account for around 50% of the total sales or more.

*Source:Bentley Media© &Lamborghini Media©

Secondly, both Lamborghini and Bentley look ahead of Bugatti in terms of electric technology integration and development. Both have shown concepts of full-electric cars, Terzo Millennio and EXP 100 GT respectively. They also all have already developed hybrid platforms, Lamborghini with the Siàn and Bentley with the Bentayga. Additionally, Bentley can boast already a well laid-out development plan to reduce emissions and develop a greener product lineup with the Beyond100 Strategy. Check Bentley H1 Results and Beyond100 Business Strategy to know more.

Third, both have been performing significantly well in the past few years in terms of sales numbers becoming leaders in their segments, with only Ferrari coming close. This holds true even in 2020. Especially compared with the rest of the industry. In the first half of 2020, Bentley even registered a 2.8% increase in deliveries, while Lamborghini’s -22.1% is still way smaller than that of its direct competitors.

All in all, if this transaction happens, even if many enthusiasts might feel sad at the idea of Bugatti turning electric (which will have to happen anyway eventually), who better than Rimac can bring it into this new automotive era? As for the other two luxury automotive brands, as of now, it seems highly unlikely to see VW deciding to sell them.

Why Porsche went for the Taycan as their first model in the EV segment? Why are they planning on offering other models only as EVs while others will have different platforms options?

THE FIRST ELECTRIC PORSCHE

The long-rumoured Porsche Taycan EV, first called Mission E, has lived up to the expectations receiving worldwide praise. Porsche is still mostly famous for its sportscar thanks to which it earns most of its reputation both on the streets and on the racetrack. As for the sales figures instead, the SUVs dominate its market share. What is interesting though is that this most awaited new model does not fit completely in any of the two categories.

*Source:Porsche©

Around a year ago, 2016 Formula 1 World Champion Nico Rosberg now turned into Entrepreneur/YouTuber published a video in which he talked about his intention to buy a hypercar. He then asked his audience for opinions on the options he selected (even though he already had his preference which was fairly easy to imagine, considering his passion for EV technology and innovation). Potential choices were Ferrari's latest hybrid SF90 Stradale, Aston Martin’s upcoming hybrid Valhalla, Swedish hybrid Koenigsegg Regera and the fully electric 1914 horsepower Rimac C_Two.

In one of his latest videos, he announced he is going for the hyper EV C_Two by Rimac. Considered his popularity among enthusiasts, this is another important endorsement for the Croatian company, whose founder and CEO Mate Rimac already appeared on Rosberg’s social channels on previous occasions.

I say “another” important endorsement because in its relatively short life (11 years) the high-performance EV manufacturer has already gained such an impressive reputation making it a really a one-in-a-million success story.

MATE RIMAC AND HIS COMPANY

In this era of companies identified in the media by a single person, Mate Rimac might be less known to the mass than prominent personalities such as Elon Musk (just to stay in a similar industry), but his achievements, dedication, and vision are every bit as impressive and inspirational.

He distinguished himself by winning several prizes in high school thanks to his final project of a glove engineered to substitute keyboard and mouse, in a period in which touch screens were not as common as today. His story in automotive, like that of other great companies, began in a garage turning a BMW E30, the second-generation 3 Series produced between 82 and 94, into a full-electric racing car.

From this humble beginning, and then through deals and investments to produce unique high-performance electric cars, the company has grown incredibly fast. Funding by established players has allowed the company to grow its workforce to over 450 employees in 2018. And now to already over 700, a number that likely counts also Greyp, the electric bicycle sister company established in 2013.

In an interview, Mate Rimac himself confirms how the company represents a quite unique example in the automotive business even financially, with 8 years of profitability out of 10, and a current solid position, on the back of the numerous investments and partnerships. In a highly competitive and capital-intensive industry like automotive, in fact, just looking since the year 2000s, there are numerous examples of big names, operating in various segments, that went bankrupt. And this is without even looking at start-ups.

*Rimac C_Two - Now called Nevera

In August 2020, around three months after the official announcement, Tobias Moers has finally joined Aston Martin Lagonda as the new CEO. He leaves his previous role at the Mercedes AMG division and replaces outgoing Andy Palmer after almost six years.

Moers comes along with a major restructuring that began with Lawrence Stroll’s major stake acquisition at the beginning of the year. This process has seen also new CFO Kenneth Gregor joining the company in June. Mr. Gregor has a twenty-year experience in automotive and has previously worked in this role for over ten for Jaguar Land Rover.

So, at the time Mr. Moers joins Aston Martin, what is the firm’s current state? what did the Andy Palmer era create? And most importantly, who is exactly Tobias Moers, what has he done for AMG to create such great expectations?

ASTON MARTIN SALES FIGURES (2007-2019)

*2008-2012 data absent

Rapidly slowing sales, since before the financial crisis in 2008 up to 2014, saw the company trying to expand its customer base by attracting new segments. One more interested in performance rather than luxury, with projects like Vulcan. Another, the female audience, specifically with the newly released DBX, which was first teased with the concept back in 2015.

This effort brought large R&D investmentswhich in 2014 only increased by 45% to reach £115 million (FT). The new strategy resulted in the delivery of the new product lineup. DB11 in 2016, V8 Vantage in 2017, DBS Superleggera in 2018, their relative ‘Volante’ convertible versions. The latest is the SUV DBX, unveiled in 2019, for which Aston Martin built the new factory of St. Athan, which will eventually also become its own house for electrification.

Thanks to this new plan, after two years of stagnation the automaker enjoyed two very positive years in 2017 and 2018. The slowing sales in 2019 and the sharp drop in share price after the 2018 IPO led to the current situation.

ASTON MARTIN REVENUE (£ MN)

ASTON MARTIN EBITDA (£ MN)

ASTON MARTIN OPERATING PROFIT/LOSS (£ MN)

TOBIAS MOERS AT AMG

Moers joined AMG in 1994. At that time AMG was an independent engineering company modifying Mercedes cars for improved performances. By 1999 Mercedes-Benz acquired a majority stake in the company and by 2005 it became a wholly-owned subsidiary, Mercedes-AMG GmbH.

During this period, his responsibilities increased up until 2013 when he became AMG’s CEO substituting Ola Källenius who became head of Sales & Marketing for Mercedes-Benz.

Since AMG became part of Mercedes-Benz, it experienced a constant growth but with relatively low numbers, moving from 20,000 units sold in 2007 to 30,000 in 2013. 2008 the best year of this era saw a growth of almost 20% with the best-seller C63 AMG and SL63 AMG. The most important milestone of this period though has arguably been the release of the SLS, the first model entirely produced by AMG. In the following three years, the Roadster, GT3, and Black Series have been unveiled as well. Finally, AMG produced also a full-electric version for the super sports car.

But what happened when Mr. Moers took the role of CEO? How did he achieve such success? First a look at the graph below.

 

AMG AND MERCEDES-BENZ SALES FIGURES GROWTH PERCENTAGES BY YEAR (2007-2019)

*2009-2012, 2014-2015 and 2018 AMG Data are average growth due to lack of official figures

 

AMG’s growth from 2014, after Moers' arrival, up until 2019, in a stagnating automotive industry, compared with Mercedes-Benz is eye-catching, to say the least.

While representing some impressive numbers for the Mercedes high-performance division, there are some points to be made with regard to the graph.

First, considering the overall sales volume, much lower than that of Mercedes, it is naturally much easier for a division such as AMG to obtain high percentage growth. Nonetheless, the increase in sales was sustained even during the last two years, when Mercedes’ growth rate was almost stagnating.

Second, the brand overall direction was already partially established even before the change at the top. The SLS release in 2009 is the most important proof of this. So, while the numbers look great, important milestones were already set before the Moers era.

The key to this outstanding change of performance pace though is theAMG Performance 50Strategy.

The plan announced on the 45th anniversary of the company, detailed AMG’s strategic expansion. Starting with the introduction of a new segment in the product portfolio through the compact A45 AMG, the plan included numerous other scopes. Expansion of Performance Centres, improved customer service, the new development of lightweight materials, class-leading low consumption rates, sole production of all Mercedes V12 engines, improvement of the Driving Academy, and so on.

 

*2012 A45 AMG

 

All of this reflected AMG’s intention of becoming a real contributor to Mercedes-Benz sales and development. One declaration by then CEO Källenius though gives a measure of Moers’ success. In a press release, he was quoted saying: “We have decided to expand our model range from its current level of 22 vehicles to around 30 vehicles in the future. We are looking to increase our global sales, which today stand at around 20,000 vehicles, to more than 30,000 vehicles by the time of our 50th anniversary, and thereby assert our leading position in this exclusive segment”.

By their 50th anniversary, after 5 years under Mr. Moers’ direction, AMG reached over 60 models and versions in the product range, and over 100,000 unit sales.

There are 5 main factors that contributed to this success.

*AMG GTR Roadster

• First, further expansion in the compact segment. With the stronger branding that accompanied AMG’s growth, the opportunity to become a part of it with entry-level models has been crucial, especially as these are aimed at a younger and more dynamic audience, which in turn helped to change the image of the brand itself. The concept started in 2013 has been carried on successfully until now. 13 new compact model variations, in fact, have been the major contributor to the 2019 success.

• Second is the overall product range expansion. As mentioned previously, despite the initial target of the 5-year plan, with all the variants and different classes, AMG now counts over 60 different choices in its range. The range covers many segments ensuring to accommodate any need or preference a client might have.

• Third, the consolidation of the super sports car niche. After the SLS, AMG produced its second exclusive car, the GT, which by now also counts different versions. Coupés, Roadsters, and the single most performance-focused Black Series. Only in 2019, AMG’s sports car sales reached 28,400 units, a +48% mainly thanks to the GT popularity. To further this success the third model entirely produced by AMG, the GT Four-door, joined the family in 2018. The latest one should be the best combination of sportiness and everyday usability, which opens the supersport segment to an even wider audience.  

• Finally, two more factors, closely linked together, greatly increased brand recognition and prestige. The AMG Project One (now called just AMG One) and the success of the Formula 1 team.

  Mercedes-AMG Petronas Motorsport Formula 1 team enjoyed an unprecedented period of success, obtaining both Driver and Constructor World Championships for six consecutive years now. Along with this and other successes in DTM (now substituted by the participation in the Formula E championship), AMG announced the AMG One back in 2017.

  The £2.4 million hypercar is heavily based on Formula 1 technology, from the powertrain to numerous other components. The synergy created between the success in Formula 1 and the ambitious project is something very unique and that just a few companies can rival with (namely Ferrari or McLaren).

*AMG Media©

BACK TO ASTON MARTIN

The British automaker has close ties with Mercedes AMG and has a number of important milestones in place from now and for quite a few years ahead. If Mr. Moers will be able, as he has been previously, to bring focus and drive to this vision, then Aston Martin has some great years ahead.