Apparently Renault is betting the company on electric cars. This could be the ballsiest and smartest strategic move I have heard of in a long time.
The auto industry is in a big crisis, these companies are huge, they employ a lot of people directly and much more indirectly… but they generate very small profits. Just consider that if somebody wanted to buy the Ford Motor Company (the 3rd largest in the world) they would need about 25 billion $. If someone wanted to buy Google they would need about 150 billion $.
The companies that are doing well are extremely well positionned, which means they stand for something very specific: Toyota means ‘affordable reliability’, BMW means ‘driving pleasure’, Mercedes means ‘prestige’, Porsche means ‘sports car’.
This is the basics of marketing, that the brands stands for and owns something unique and relevant.
The problem is that there are not many meaningful and distinctive benefits left, and this is why Ford, Renault, Peugeot, Fiat and GM more than any others are all struggling to be relevant. But there’s a new word that is becoming increasingly important these days… and no one owns it yet…
Because of high oil prices and the fact that cars are highly highly polluting machines, most car manufacturers are investing a lot in alternative energy cars. The most successful by far are hybrid cars.
The problem is that ‘hybrid’ is not such a clean word to own, it’s not very choiceful, it’s a bit of oil and a bit of electric…
So if electric or clean is the word of the future, one has to make choices, no half-baked solutions. Renault is apparently taking this road. It is very risky because it depends on oil prices remaining high, on the continuity of Government subsidies and particularly on consumers changing the way they use their car… but if that happens Renault could become the new Toyota.
You have to be able to sum up your brand in one meaningful and relevant word to do good marketing.
Some jobs at Renault.
An article in the Economist about Renault’s big bet on electric cars.
More on the Kangoo ZE – zero emission and no noise – on sale in 2011.