How the Auto Bailout Affects Brand Perceptions

Photo from www.pmcorp.com

Everyone has heard the recent news about the failure of the nation’s largest automakers. Being inquisitive brand strategists, we were curious about the implications for their brands following the news of the possible bailout. So, we emailed all the members of our team, requesting their response to the article linked at the bottom of this post. We asked them to write their initial thoughts from a branding perspective, without obsessing about what they wrote. Respondents were prompted to include how they thought this information would affect the auto company’s brand perceptions and future brand profitability.

The responses were interesting to say the least. While some respondents vented about the use of taxpayer dollars, others commented on such ideas as consumer brand perceptions and product innovation.

The overall sentiment was that, while mismanagement of company funds certainly does not improve their brand image, most of the damage to brand perceptions has been happening progressively over time, and if overall consumer opinion has not already been affected, it probably won’t be due to the impending bailout. “Obviously their brands are hurt as it is.” states one respondent, “Not just because of poor leadership, but because their [product] quality and design have not been meeting consumer’s expectations”. Another said, “I wouldn’t buy their cars before because they were poorly made”. It seems that in the consumer’s eyes, trust in the Big Three auto companies has been slipping steadily for years, and the financial failure is like the icing on the cake.

Other common themes among responses are the issues of product innovation and brand perceptions. One response reads, “In recent years auto makers have been attempting to be seen as eco-friendly, but have primarily been about powerful, tough and durable vehicles. With this possible bailout, they are going to really need to…focus on optimization of their products”. It seems that it is necessary to re-position the product brands as responsible, eco-friendly, and affordable, as opposed to big and hefty.

“Consider the brand perceptions of the government: inaccessible, bureaucratic, non-responsive, and ineffective. Come to think of it, that might be the perception of GM Corp’s brand attributes. Putting those two together will not have a positive impact on the automotive brand”. This addresses the point that many other respondents made; the damage to the automakers’ brand image is already done. Government assistance might be necessary to keep the companies afloat, but will decidedly not boost their popularity among consumers. Only “an incredible willingness to change” and a total overhaul of their brand position will repair the years of damage done to the American automakers’ brands.

Click here to read the article our team responded to.

http://www.foxnews.com/politics/2008/12/08/white-house-confident-auto-bailout-deal-near/

Feel free to contribute to the conversation! Comments are encouraged.