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New car trends: Why should we have to sell the wrong cars?

By Jay Nagley

Globalisation is the buzz-word of the 21st century. Everybody in every country wants the same smartphone, and when it comes to cars, the Range Rover Evoque is equally sought-after in about 100 different markets.

However, the car industry is not quite as homogenous as one might think. If you asked someone from the European car industry to nominate a successful brand among the smaller Japanese manufacturers, they would probably say Suzuki, with Subaru about the last one to get an acknowledgement. Ask the same question in Detroit and the answer would be exactly the opposite. In the UK, for example, Suzuki sold 14,000 cars in the first seven months of 2012, for a very respectable 1.2% share, while Subaru sold slightly less than one-tenth as many.

In the USA, Suzuki sold 15,000 units in that period for a 0.2% market share, a figure so low that people are starting to wonder if Suzuki will have to withdraw from the country. Meanwhile, Subaru sells 15,000 cars in the USA every fortnight – it should exceed 350,000 sales in 2012 and some of them will even be the Tribeca “luxury” SUV that was laughed out of the UK market when it was launched.

Most important regions

Amazingly to most Europeans, the biggest problem facing Volkswagen in the USA (whose sales are not that far ahead of Subaru, by the way), is a reputation for shoddy quality.

Faced with strong regional differences, many companies are simply focusing on the most important regions, with the result that some cars launched over here look bafflingly unsuitable. For example, the current Nissan Micra is the least exciting or appealing version since the 1982 original. However, that isn’t because Nissan can’t do any better. It is simply that the Micra is now primarily for emerging Asian markets, where any new car is quite exciting, and functionality and cost are more important than style. Fashion-conscious Europeans get the Juke instead.

A similar current example is the new Mazda6, which is only a saloon or estate, not a hatchback. In the UK, upper-medium sector saloons without a hatchback are very hard to sell. However, that is just a feature of north-west Europe – the rest of Europe and North America want saloons.

Even European brands can end up in the position of selling cars which are not relevant to this region. Opel/Vauxhall’s idea of co-operating with Suzuki on a city car made perfect sense on paper, as no-one is better at making money out of very small cars than Suzuki.

However, the Vauxhall Agila was simply a Japanese city car design that had little relevance to European buyers. To the rest of the world, city cars are mostly about providing the most economical form of practical transport. In Europe, city cars are often bought as stylish second cars, or by people who don’t need much space and happen to like their design. A Fiat 500 hardly sells on value for money, after all. Even that European powerhouse VW foisted the Brazilian-made and focused Fox on us, despite its appalling CO2 figures.

The one exception to regionalisation is the luxury market: luxury and global are actually synonymous. It is generally accepted that rich people expect to see the same luxury brands wherever they land. It was that fact that led Cadillac to launch in Europe: it felt it could not be luxury if it was not global. Unfortunately, it then launched with the most laughably parochial Detroit designs, which is where the whole idea went horribly wrong.

This is another advantage that premium car brands have over non-premium brands. The extent of regional customisation for BMW is generally adding a long-wheelbase version for China. Audi or Mercedes-Benz can take an approach much more like: “These are global luxury products. When you are rich enough, you can buy into our brand.”

Mainstream car companies have the issue of deciding whether a given product can genuinely be global, or just regional. If it is regional, it may still be worth exporting it to another region if the numbers add up.

European buyers are going to see more designs which seem slightly off-beam from their perspective. The one undeniable effect of globalisation is that our region of the world just isn’t as significant as it once was.

10 cars not designed for the UK

Model / 2011 UK sales

Nissan Micra 14,054

Vauxhall Agila 5,106

Kia Soul 4,025

Volkswagen Fox 2,917

Honda Insight 2,032

Suzuki Splash 1,769

Toyota Urban Cruiser 1,236

Suzuki Jimny 848

Mitsubishi i 125

Nissan Cube 76

(figures from SMMT)

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