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Market trends: VMs cotton on to Intel

Name the best marketed brand outside the car industry. Coca Cola? McDonalds? I nominate Intel.

Cleverly, the company has created a market leading brand name out of an invisible piece of electronic hardware, the Pentium chip.

So what has that got to do with cars? There are the first signs that the car industry appreciates just what Intel has achieved.

A study in Germany has found that car buyers attribute more value to a car that is equipped with components from valued component brands. And the best known supplier brand is Bosch, which is well ahead of Hella and Siemens VDO.

This presents car comp-anies with an interesting dilemma. Traditionally, they want to promote their own brand at every stage. In their ideal world, every component would carry the manufacturer stamp and every dealer would carry only the manufacturer name. Nothing would be allowed to dilute the manufacturer brand.

However, it may be time to adopt a more flexible strategy. Small manufacturers have always traded on associations with more prestigious ones.

For example Seat in the 1980s advertised the ‘System Porsche’ engine in the first Ibiza (this was to Porsche’s fury, as it assumed all its engineering work was carried out anonymously, but had never actually written anonymity into its contract with Seat). And today, anyone going into a SsangYong dealership is left in no doubt that the drivetrain is Mercedes-Benz derived.

Bosch direct injection unit could be carmakers’ ‘Intel inside’

However, it would be a new approach for big carmakers. Could German prestige brands resist the advance of the Japanese by stressing the amount of Bosch or Siemens technology in their cars? It would be tricky, as everyone uses some Bosch technology, but not impossible.

Component suppliers have already publicly said that they offer the latest technology to the most co-operative car companies – this is a swipe at GM and Ford who have been known in the past for adversarial relationships based only on price.

Mercedes has often been the first user of new Bosch systems, although without a huge amount of Bosch branding. As everyone now knows that carmakers don’t make all the electronics in their cars, could there be opportunities for publicly acknowledging the co-operation?

It’s a bit like outdoor clothing companies advertising the fact they use Gore-Tex. Lots of clothes contain it, but the first brand to associate itself with the material, Schoffel, derived lasting benefit.

Could we eventually see adverts saying things like, “Car by Audi, brains by Bosch”? The general message could be to both parties’ advantage.

The component suppliers would dearly love to become brands and the first manufacturers to adopt that strategy could reinforce the message of their technical excellence.

Package by SsangYong, no secret where the drivetrain originated

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