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It is irrefutable that thriving automobile labels such as Mercedes-Benz, Lexus, BMW, and Porsche have cemented their standing by delivering exceptional products and pioneering advancements. Notably, Mercedes is renowned for its cutting-edge engineering and opulence, Lexus for its reliability, and BMW and Porsche for their high-performance capabilities.
Due to their unwavering positioning and superb execution, these companies have solidified their positions in the industry, garnering millions of enthusiasts globally. Nonetheless, the luxury sector is fiercely competitive, necessitating leading brands to adapt as consumer preferences evolve. Consequently, many experts argue that contemporary car manufacturers must shift from being merely “mobility providers” to embracing the role of “lifestyle providers” in order to foster more engaging relationships with their clientele.
Moreover, lifestyle marketing aligns with the surge of experiential luxury, an emerging trend that no high-end brand can afford to disregard. In a study commissioned by Lexus on the “Future of Luxury,” 56 percent of respondents perceived luxury as a lifestyle centered around experiences rather than a mere assortment of possessions, with 86 percent expecting luxury brands to deliver exceptional experiences to consumers. The Japanese automaker concluded, “Looking ahead, successful luxury labels will set themselves apart through superior experiences and services, not just top-tier products.”
Lexus, in particular, has undertaken numerous initiatives to tap into the experience economy. Consider the Lexus Performance Driving School, offering enthusiasts the opportunity to pilot the brand’s high-performance vehicles at renowned race tracks like the Circuit of the Americas and the Indianapolis Motor Speedway. Simultaneously, the Intersect by Lexus retail concept, featuring culinary and social experiences, caters to individuals seeking a connection with the brand beyond the realm of automobiles.
Mark Templin, former vice president of Lexus International, articulated, “We frequently discuss transitioning into a lifestyle label rather than just an automotive brand. At Lexus, our ambition extends beyond being a fleeting part of our customers’ daily commute lasting mere minutes or an hour. We aspire to be an integral part of their lives round the clock. How can we enhance their lives consistently?”
It is worth noting that Lexus’s counterparts, particularly European automakers, offer analogous, if not more enticing, events and programs for their followers, effectively promoting their lifestyle offerings.
Evidently, Ferrari has expanded its brand through clothing, accessories, and collectibles. In 2021, it even launched its premier in-house fashion line helmed by former Armani designer Rocco Iannone. John Elkann, the company’s chairman, remarked, “At its essence, Ferrari is a luxury enterprise and the foremost distinctive and innovative luxury marque, presenting abundant opportunities ahead in further cultivating its lifestyle offerings.”
Ferrari’s competitors, includingAston Martin, Lamborghini, Porsche, and Bentley all present their respective lifestyle initiatives, spanning from apparel and furnishings to property ventures. Earlier this year, Lamborghini introduced its inaugural footwear collection in collaboration with the leather goods producer TOD’s, while Aston Martin recently marked the completion of its 66-story skyscraper in Miami.
Amidst this, emerging players in the automobile sector are also exploring lifestyle merchandise as a means for added value. NIO, a Chinese newcomer in competition with Tesla, has partnered with more than 600 designers to create everyday products, garnering accolades for their endeavors. Noteworthy among these is the company’s eco-friendly fashion range called Blue Sky Lab, utilizing recycled materials from NIO’s vehicle manufacturing residues.
“We believe that enhancing capabilities within NIO Life should not be perceived as conflicting with our core automotive operations,” mentioned Lihong Qin, NIO’s co-founder, in an interview with McKinsey & Co. “Presently, over 50 percent of NIO users have embraced NIO Life, and this figure will climb as we establish capabilities across various domains. As the vehicle deliveries surge, the investment made here won’t strain us but will emerge as a fresh avenue for value enhancement.”
NIO, admittedly, is yet to secure financial stability (reporting a loss of USD 2.9 billion in 2023), thus it remains premature to determine the efficacy of its strategy. The auto manufacturing realm demands significant focus, and even the established firms haven’t consistently flourished with brand extensions. Ferrari, for instance, scaled back its licensing agreements by half due to potential risks to its brand image, while Lexus has already closed down its Intersect stores in New York and Dubai. Nevertheless, their undertakings like driving programs and motorsport merchandise have proven effective in enhancing consumer involvement and cultivating a brand community.
In conclusion, advancements in technology, the globalization phenomenon, and widely accessible technical knowledge have simplified car manufacturing, thereby reducing opportunities for differentiation. Therefore, delving into lifestyle branding could be a prudent move for automakers to safeguard their brand character and nurture enduring customer loyalties.
Nonetheless, they must remain mindful of their primary identity as car manufacturers, prioritizing this over their secondary role as lifestyle brands. This is crucial in an era saturated with lifestyle labels that could exacerbate the already homogenized car market landscape. An excessive focus on lifestyle extensions might divert attention from the critical task of establishing unique selling propositions (USPs).
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