Wolfgang Reitzle, head of Ford’s Premier Auto Group, harshly criticised America’s flagging auto industry on Thursday, according to Associated Press.
Reitzle challenged manufacturers and dealers to shed their ‘Old Economy’ reputations by aggressively pursuing new technologies, marketing strategies and sales incentives.
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“I am pretty much fed up with the negative, defensive situation we in the automotive companies nowadays are so often put in,” AP quoted Reitzle as saying in a presentation to journalists at the Greater Los Angeles Auto Show.
Reitzle discarded his prepared remarks to speak passionately about the auto industry and a future that might include dealerships with their own test tracks and vacation packages sold along with certain cars.
Car companies should stop thinking of themselves as manufacturers of “sheet metal boxes” and define themselves as “mobility enterprises,” he said.
“In the future, it must not only be that we sell cars. You can buy mobility from us,” he said.
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By GlobalDataFor instance, Reitzle suggested that a globe-trotting customer might pay Ford $US50,000 for a ‘mobility package’, which would provide a car wherever in the world that it was needed.
According to AP, Reitzle also said car makers have much to learn from the fashion industry and companies such as retail giant Wal-Mart, which know how to package an experience and make shopping pleasant.
He had harsh words for the typical American car dealership, which he called a “parking lot with a roof.”
And he described rebates as a ‘disease’ that cheapens a brand.
“This comes from creating unattractive products which nobody wants that can only be sold by rebates,” he said.
AP said that Reitzle also criticised financial analysts who put great value on internet companies but consider the automotive industry a poor investment. “I think we are the future economy,” he said. “Because there is no substitution for the car, it will always grow.”
A Ford’s press release, published after Reitzle’s presentation, did not report his apparently off-the-cuff remarks, saying only that Reitzle had spoken on three key areas – product, brand and the management of the business – emphasising the importance of each element in the development and future of the automobile industry. However, the company later issued a full transcript of Reitzle’s speech.
“I believe the industry will continue to consolidate, but I also believe the size and complexity of the new companies formed will require a different management paradigm,” Ford’s press release quoted Reitzle as saying.
“The winners will be those who can divide their businesses into nimble, market sensitive, and less bureaucratic business units and yet still achieve synergies and the benefits of a large group. The survivors will be those that master this paradigm.”
In addition, Ford’s press release said, Reitzle discussed the creation and development of PAG ‘Experience Centres’ – “exclusive dealerships which will provide customers ‘touch points’ for each brand, with the added value of a comprehensive on-road and off-road track so customers can experience product features in an exhilarating and safe way.”
A new Premier Auto Group dealership will open soon near Phoenix, Arizona, with all five Ford luxury brands under one roof and two test tracks, including one simulating off-road conditions.
AP’s report said that Reitzle noted that catering to individual customers would become increasingly crucial to the auto industry’s survival.
“My prediction is that the last step of personalisation will take place in the big dealerships,” he said. “The big, strong dealers will not only have a service shop, they will also have a shop for personalisation, where the dealer can change parts, make the interior a personalised interior. You can change the colours. You can change it after a year.”
To some extent this is already happening. DaimlerChrysler’s MCC Smart range is already offered with interchangeable body panels, allowing customers to change the exterior appearance and colours at will, for modest cost.
The PAG group, which manages the Aston Martin, Jaguar, Land Rover, Volvo and Lincoln brands for Ford, has moved its headquarters to Irvine, California, where it will open a design studio, Reitzle said. A second studio in London will design branded merchandise for sale along with the cars.
