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Drew Smith: ethnographer, strategist and host of Rising Minds

Quote of the Day

“This is a non-rational business. It’s not irrational. But it’s not necessary for anyone to get a new car—almost ever.”

Jerry Hirshberg, former president of Nissan Design International

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When Jerry Hirshberg uttered these words in an interview with Gary Vasilash of Automotive Design and Production back in 2002 he was fresh from taking part in a highly successful product renaissance at Nissan. He was at the height of his powers: making consumers fall in love with a product that they didn’t need.

Hirshberg was the guy that, when Nissan had sunk to a financial and creative low in the late 90’s, suggested reviving the Z. Clearly he knows how to pull at consumer heart strings to get a return on investment.

I don’t think we will ever eviscerate emotion from the car/human equation but what if the emotions we feel in relation to cars change? Imagine, for a minute, if automotive brands could no longer leverage power, size, opulence and selfishness as their emotional draw cards, but instead had to appeal with intelligence, authenticity, longevity and real value.

If you had asked me even 18 months ago if there was any merit to such a scenario I would have probably giggled and said that “premium” was the way forward. The world was on a wave of ever-more conspicuous consumption that drove car manufacturers to find ways to give everything they sold the touch of premium, no matter the effect on weight, practicality or the discordance with their brand image.

Well, there’s a developing school of thought that says that the consumer wave may be about to abate. Needless to say, the impact this could have on the way we design, market and support cars can’t be ignored.

Hiroko Tabuchi recently wrote in The New York Times (free sub required) about how consumer spending habits changed in Japan after the financial crisis of the 90’s. For starters, there has been a significant reduction in discretionary purchases with car sales falling by half since 1990 and retail spending rising by only 0.2% between 2001 and 2007. Even the well off seem to have changed their habits for good despite a return to health for the Japanese economy at large. Sales of luxury goods have plummeted with Louis Vuitton down by 10% in 2008 and a survey of men in their 20s found that only 25% were interested in buying a car, down from 48% in 2000.

Given that Japan is now entering a new period of, for want of a less ironic term, negative growth, the attitudes that these figures represent only stand to become more ingrained. Tabuchi quotes a 20 year old female college student as saying “I’m not interested in big spending, I just want a humble life”. The turn around in Japanese consumer thinking that this represents cannot be underestimated.

Grant McCracken, a blogging anthropologist, recently outlined three models of possible change in consumer spending. In doing so, he addresses the factors at play in a long-term scaling back of discretionary spending in western economies.

Using Tabuchi’s analysis as a basis, among others, McCracken suggested that the current crisis alone won’t be enough to change our deeply entrenched heavy-spending ways. But if, for example, the allure of competitive spending (otherwise known as “keeping up with the Joneses”) disappears along with the compulsion to be either on the bleeding edge or a fast follower of trends in fashion and technology then we might just get comfortable with spending less. Anecdotal evidence suggests that this is actually starting to take hold in some economies.

John Hockenberry, writing for Metropolis Mag, offers a similar assessment when he states “… after 2008, it is clear that the consumer aspiration to buy nothing—whether out of exhaustion, bankruptcy, or simply to pay other bills—has become a plausible narrative.”

This is all very well, you say, but we’re designers! What does this mean for us?

In the automotive and consumer product industries we strive to differentiate our products, and get people to buy them, not on the basis of their practical merits (which are by and large a given these days) but mostly on their emotional value.

For the last 60 years, designers have developed products for consumers looking for tangible indicators of their lifestyle as a means of communicating their place in the world to others. As trends in lifestyles change, so the demand for these indicators changes. Each time this happens manufacturers and designers embark on another round of projects as they seek to replace old products with ones that will drive more sales. Whether there is any functional improvement is often a moot point.

This cyclical relationship between consumers and designers has worked very well up to this point, driving massive economic growth. But where would automotive companies be left if the lifestyle is to buy nothing that is not necessary and we find ourselves in, as Hockenberry puts it, an “economy of no product”?

It may not be as big a problem as you first think. Given my recent post about repairing things and mutual musing here and over at Re*Move on the topic of a more democratic model of vehicle distribution, the components of the answer may already be under our nose.

By designing for longevity, reuse and repair and, crucially, redesigning the distribution, ownership and support system, car manufacturers might be able to continue, albeit in a radically different way, to build cars. Done right, these new products would possess the intelligence, authenticity, longevity and real value that will become the hallmarks of a post-consumerist culture.

The 64 billion dollar question is whether the behemoths of the industry could react fast enough and with enough conviction to capitalise on this scenario? Possibly not, although I continue to live in hope. The companies to watch closely, as I outlined in a recent interview over at Strategic Aesthetics, will be the small start-ups, unencumbered by history, politics and inertia.

Whichever way you look at it, however, the change won’t come easily, either for consumers or manufacturers. Both parties have both been on a giddy high of self-satisfaction for so long now that we can expect some kicking and thrashing as we go through withdrawal. Artificially delaying the process, as many governments are now looking to do through scrapping schemes, will only make the inevitable even more painful.

For all we know, we may soon come out the other side of this financial crisis with our consumptive habits bruised but intact and the car industry will go on doing what Hirshberg knows it does best. It seems rash, however, to not take this opportunity to consider what good, for both designers and society at large, could come out of the retreat of consumerism and it’s impact on the automotive industry.

[Sources: Grant McCracken, John Hockenberry, Hiroko Tabuchi Image: ATIS547 Thanks to Ralf at Vol. 2 design-management.de for pointing me to the original article]

Category: Branding, Car, Design, Design Strategy, Eco

Tagged: , , , , , , , , , , ,

No Responses

  1. Robin Brown says:

    Hmm, fantastic article. I wonder if the likes of Gordon Murray may be the catalysts for radical change in the industry. The answer, as you indicate, probably depends on the severity of the recession.

    By the way, is it just me or is there a problem with the links?

  2. drewpasmith says:

    Thanks for the comment Robin.

    Yeah, I’ve been reading with intense interest about Gordo and his T25. What has me really intrigued is the talk of decentralised manufacturing, allowing supply to meet demand on a local basis without the environmental debts incurred by transporting completed vehicles to market.

    I’m just itching to see how his plan plays out. It could be the game-changer I’m longing for.

    And yes, there’s a problem with the links. Let me fix ’em for y’all.

  3. Joe Simpson says:

    You’ve really nailed it here Drew. Totally agree with pretty much everything you say here. One of and the key issues that I’ve been musing on for a long time (as you identify) is the issue of young people being truly interested in cars any more. I’m not convinced many of them are, but the figure about young Japanese men is incredible… judging by how many of my 20-30something friends don’t have cars, nor want one, it’s an issue that will only grow.

    Much that I’d like to, I can’t see the incumbent OEMs ever moving beyond the ‘just sell more dam cars’ mantra. The likes of Murray are definitely moving in the right direction though, as Robin says. That Murray seemed to be the happiest person at the Geneva show, and is on record as saying ‘We are on the verge of huge change. And about time too.’ tells you all you need to know…

  4. drewpasmith says:

    Thanks for chiming in Joe, your feedback is always appreciated!

    The Japanese figures ran through me like a bolt of lightning. Although some I have discussed it with see it as far to isolated an example that can’t be translated to a western economic mentality. Let’s just say we had to agree to disagree on that point.

    Like you, of my friends are now starting to slow their competitive spending and this began before the recession really began to bite. I’m beginning to wonder if there was a broader trend that, like in Japan, will simply be entrenched by the economic climate.

  5. Ben says:

    There’s so much here to get into… where to begin?

    First allow me to reiterate what Joe said re: nailing it. Dead on. Even my wife read it and approved — and she’s neither a designer or into cars!

    So, some questions: how could you avoid the ink-jet printer model where the chassis and basic car is sold as a loss-leader and the replaceable componentry is sold at a massive markup, such that it’s nigh-cheaper to buy a new chassis than upgrade/repair the initial purchase?

    Or the reverse: something of such high quality that it is able to be repaired easily, or is even worth repairing, after 5-10 years to as-new condition would probably be quite expensive — how would you keep costs down? This is like the phenomenon of not being rich enough to afford repairable shoes, so having to buy new crappy shoes each year.

    Re young people aren’t into cars, I think there are a few reasons for this. First, it’s not very politically correct to be into cars. A bunch of my current 4th year industrial design students are really into bicycles and cycling, though. Second, it’s expensive to be into cars. Fuel, registration and insurance are expensive, especially for young people. Only now that I’m near-as-dammit to 30 are my insurance costs what I regard as sensible. Third, even if you are into cars, it’s hard to know what to do with them. Performance-enhancing modifications to new-ish cars are generally beyond the reach of people without an engineering or computer-science degree and even then a bog-stock Focus is faster and better than most old affordable cars anyway. Motorsport, at the most basic club level, has a pretty poor image among the young guys I’ve spoke to who *are* into cars — tweed jackets and escaping the wife on Sundays seems to be the image. And its seen as expensive.

    Don’t discount all the other stakeholders in the whole socio-cultural network surrounding car ownership either. If consumers leased cars the way airlines leased planes, how would servicing and interim repairs work? Would they let you take your leased C-segment to the local mechanic or would you need to schedule an appointment with your dealer to have the headlight fuse changed?

  6. Moose says:

    Great thought provoking article Drew.

    Behavioural economists and consumer psychologists have completed lots of studies demonstrating that consumers are often irrational decision makers. Your readers may find the following book of interest:
    http://bps-research-digest.blogspot.com/2008_05_01_archive.html

  7. drewpasmith says:

    Hey Ben!

    Thanks for your insightful comment, it’s great to be able to strike up this kind of discussion.

    To deal with the easiest point first, youth and cars, I think there’s a growing sense that cars as objects of passion and enjoyment in and of themselves is becoming slightly passé and cost is only part of the equation. McCracken points out in his post that responsibility to the planet is now orthodoxy, being so well installed as it is in the minds of the young in schools. Perhaps we are now seeing generations that value a clean environment over their total personal mobility irrespective of cost.

    On the question of cost, are actually paying the full price when we slap down our €12,000 on a new Polo? Or are we paying a price that doesn’t take into account the full life-cycle of the vehicle? It’s a similar question to the one I asked myself: how can I buy a pineapple in Germany in the middle of winter for €1.29? From start to finish, Costa RIca to Frankfurt, I simply couldn’t believe that €1.29 represents the true cost of production with a profit on top. Perhaps there needs to be a fuller account of the total cost of the vehicle reflected in the purchase price.

    As far as the crappy shoes analogy is concerned, there was a time when all shoes could be repaired, not just the really expensive ones. Per unit, the shoes may have cost more, but priorities were different. Having a pair of shoes that would last you 15 years was more important than 15 DVDs or replacing your flat-screen. I’ve got a pair of shoes that I’ve had for 11 years and, with 3 sole replacements, are as good as the day I bought them. The amortised annual cost? Much less than a pair of Converse All-stars.

    Also, to return to my Volvo’s for a second, they were anything but expensively engineered. Live axle, an engine derived from that of a 1920’s tractor and some amazingly heave-gauge steel in simple pressings. Yet one of them is still in the family as is pushing for 400,000 Kms these days. She’s a little worse for wear visually, but after a minor engine rebuild at 270,000 Kms she runs like a train. The best thing is, at 1370Kg she is lighter than a Mk VI Golf yet is from a size segment up. And, according to the NHSTA, the Volvo 240 series is still one of the safer cars you can buy. I don’t accept that cars *must* be expensively engineered to be suitable for long-term ownership, there would just need to be a change in priorities.

    At the end of the day though, it’s down to a willingness to change on the part of both consumers and the manufacturers. This is where I’m happy to admit that I’m a doe-eyed idealist. It’s a chicken AND egg situation in that car buyers, as stake holders in society, need to understand their responsibilities and the consequences of car ownership. Governments need to encourage an environment that helps them do this and causes manufacturers to respond. As Michael Tomasky said in today’s Guardian, create the market you idiots. http://www.guardian.co.uk/commentisfree/michaeltomasky/2009/mar/30/automotive-industry-hyrbrid-market.

    Despite repeated head-wall interaction sessions I haven’t got a response to the question of the support infrastructure. Perhaps some of you other readers might like to chime in?

  8. Massimo says:

    Hi Drew, generally i agree with your point of view, but ultimately how we get a bloody damn car done and on the road.
    The approach that you have given in the interview is fine, but all of this happen if designers (or their chief) are not even in control of their design process. The key to creative concept is definitely a more broad and strategic approach. But the key to execute it stands on the design process. Either one of this missing you are not “doing the right things”. Then we have 1 company that does both, few that does one of them, majority that do none. Reason are multiples. But designers gets frustrated by the lack of consistency and execution. it is very much good to focus on strategic thinking, but even more should be on the design process.

    An example as much as i love the Mazda concept series “Nagare” (for obvious reason), it does lack completely in design process and execution (wonder why!!!), and that’s way they will be remember as beautiful concept and no more, in 2 year we will forget about them (shame).

    Execute a streamlined Design process in a major company means fight, argue, decide. And as we now not many are up to it with the big guns inside companies.

    BTW prove of concept in what i say: L VD’A left Mazda.

    Let me reiterate: Strategy Aesthetic COUNTS!
    Design Process IS KEY!!!

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