The Passion Equation

OEMs who truly listen to their customers and scan the landscape both internally and within their supply base for the best ideas and evolve their dealer experience are rewarded.

Much has been written about the miniscule difference in build quality within today’s vehicle offerings. It used to be easy to discern: fit and finish, reliability and cost of ownership. Today, vehicles which cannot deliver on these basics do not make the cut. OEMs understand that the true differentiators going forward will focus on a number of factors, many of which are difficult to quantify. Such as “perceived quality.”

And now there’s another: the “Passion Equation.” Every buyer has a unique calculation which drives his/her passion for a vehicle. It is the holy grail OEMs seek when designing a new offering—the ability to build a vehicle which spans as many buyers as possible to want to purchase a vehicle. We witnessed many years ago what happens when OEMs design a well-performing appliances with little character. A-to-B vehicles that check the boxes. The manufacturers end up incentivizing the vehicles to the edge of profitability, wishing they would have pushed the team harder to do more with less and give the vehicle some longevity over a five-year cycle.

Despite the need to improve fuel economy by an average of 5% per year going forward through the end of the decade in order to meet CAFE, designers and engineers have more levers to pull from styling, performance, capability, and packaging perspectives than ever before. No single route is the most desired to optimizing this equation. Every OEM has to consider their own capabilities, supply base, technology cupboard, cost tradeoff, and global sales footprint. This balancing act is not easy.

What is the optimal “Passion Equation”? It depends on a number of factors which include utility, the vehicle’s vocation (how does it fulfill its mission?), practicality, fuel economy, performance characteristics, safety content, security, interior and exterior styling, powertrain match, brand/ vehicle image, and the dealer experience. When considered as a whole, every buyer has a threshold for all these elements and uses them to grade the vehicle for these and others to complete the equation.

Passion goes beyond a sub-4 second 0 to 60 found in the most recent Corvette, the visceral exterior styling or the highly functional interior. People who own Caravans, Camrys and even Ford Transit Connects have a passion equation with the difference being that their equations have different variables. Mid-30s homemakers with stay-at-home toddlers have passion for a minivan. It fulfills its role well (vocation), offers a strong value for money, and gives the driver a sense of driving security and safety while delivering on the vehicle promise. Different equation, same answer.

The moral of the story is that half-hearted efforts to check the boxes from a content, styling, build quality, powertrain performance, ride and handling, interior material choice, color palette and other elements will be rewarded with a vehicle exhibiting an erratic product cycle (with an early volume swoon) and enhanced incentive intervention to keep volume stable. Early after launch, all involved realize that the mid-cycle enhancement needs more attention to fix the issues. We have seen examples of late where OEMs quickly realize they missed the mark. The 2012MY Chevrolet Malibu or the 2012MY Civic—both received immediate attention early in the cycle.

OEMs who truly listen to their customers and scan the landscape both internally and within their supply base for the best ideas and evolve their dealer experience are rewarded. Involvement from all facets of the organization is required—designers, engineers, suppliers, marketers, advertising and the critical dealer base—all need to be working cohesively. It is difficult to execute every time though the advent of global platforms, increased design flexibility and shorter cycles mean that one does not need to live with mistakes for 5 years. Relief is only a refresh away.