Claiming Brand “Hybrid”
In my earlier posts about branding (1, 2), I mentioned how Toyota and Honda have an edge over their American competitors because the word “hybrid” is now associated with their cars and not their competitors’ cars. In contrast, the best the Americans can come up with is “SUV”, which in our current climate of rising gas prices and oil uncertainty is becoming as much a liability as it is a cash cow.
It was thus with some interest that I read the following Salon.com article:
OK, there’s plenty of controversy in the automotive world over whether hybrid cars are more a success of brilliant marketing than anything else. Whether hybrids are really good or bad for the environment in the long run, worth their premium price tags, and get the gas mileage that they claim are questions that are hotly debated (and worth lots of further investigation in this forum, since the whole issue of energy use and conservation is crucial to the future of the global economy). But it’s hard to deny that while Ford and G.M. were raking in billions of dollars selling ever more gargantuan gas guzzlers, Toyota was pouring R&D into new designs destined to flourish in an increasingly energy-conscious world. And now they can’t make Priuses fast enough.
Ford is playing catch-up not only in technological terms, but also in terms of public perception. As Bloomberg.com points out:
Getting credit from the public for undertaking such a big technological leap, one that saves fuel and reduces tailpipe emissions, could turn out to be even trickier.
On March 9 Ford Motor and Toyota Motor Corp. announced they had signed a licensing agreement that, among its other provisions, allows Ford to use technology protected by 20 Toyota patents covering hybrid technology.
While Ford disputes that it bought the rights to use Toyota patents as a sign of its dependence on Toyota R&D (Ford says it developed its own hybrid technology only to find out that Toyota held patents which were very similar, so Ford licensed Toyota’s patents to avoid potential litigation), the fact remains that had Ford been the first into the market it could have not only claimed the term “hybrid” but also the intellectual property associated with the technology. The best Ford can do now is lay claim to the word “hybrid SUV”, as we can see in this Businessweek article. And as the article’s title also points out (Is Ford Innovative?), questioning the hybrid misstep also brings into question the competitiveness of the company as a whole.
Granted, the move to hybrids could be seen as a highly risky move by Toyota and Honda. But this isn’t the first time something like this has happened. I recall that the introduction of Hondas and Toyotas in the US in the late 70’s and early 80’s shook things up. Do they just have a better vision than the Americans of where they want to go? The Salon.com article points out the role of long-term thinking:
The fact that workers end up getting screwed by executives who focus on quarterly profits at the expense of long-range planning is nothing new—and certainly not the fault of “globalization.” But Detroit already got its ass handed to it once by Japan in the 1980s. The car companies don’t appear to have learned a whole lot from their mistakes…
While the fight for “hybrid” may or may not be over, there are still plenty of other opportunities available: nobody has yet touched on the shift in thinking required to move the focus from “cars” to more the generic “transport”—my memory is fuzzy from reading too many books, but wasn’t it Paul Hawken who said that Honda sees itself as an engine company, not a car company? Now we’re talking services…