Branding Opportunities for the Automotive DTC Industry

COVID-19 fast-tracked changes in consumer behavior, accelerating a drive from a business-to-business retail model toward a direct-to-consumer (DTC) retail model across many industries. One of the more surprising aspects of this transformation is in the automotive industry. Today, 76% of car buyers are open to buying their vehicle completely online.

This evolution to DTC for the automotive industry brings up a variety of questions and opportunities for marketing directly to the consumer, as well as launching completely new brands and offerings. One of the most important questions brands need to ask revolves around identity: Do I play off my existing brand name? Do I create a new identity? How do I use brand names to make a connection with the consumer?

But before we get into those questions, here is a bit of background on how the auto industry got here and what may come. The DTC model has always held some level of interest among automakers but has proved to be a challenge to pull off. Since the automotive dealership emerged in the early 1900s, consumers have relied on their local dealerships as their go-to places to pick out their new rides. Automakers have relied on dealerships as their touchpoint to connect with their customers.

Today, we are seeing the move to DTC emerge faster for electric vehicles. Tesla has challenged the anti-DTC stance by being the first EV brand to combine direct sales with its own stores and service centers. Ford, meanwhile, is using dealers for their new Model e  brand to elevate the EV sales and service experience. Ford will certify Model e dealers on two levels based on their investments in the EV sales and service experience.

Automotive brands have gotten creative in developing new business models that combine DTC with dealership oversight. We see this with Transportation as a Service (TaaS) and Software as a Service (SaaS) where both offerings can be sold directly to customers while also maintaining partnerships with dealers to “warehouse” the vehicles and act as a delivery hub for interested pay-per-use customers. These new business models present opportunities for new brand names, offerings and a new way to market autos and surrounding products.

Toyota’s Kinto Car Share is a great example of an innovative TaaS approach for “occasional-use” vehicles. Become a Kinto member and rent a Toyota whenever you want. In addition, Kinto members who drive for Uber can simply rent the vehicle for a relatively small day rate and then drive while earning Uber bucks, thus avoiding wear and tear on their own car. Turo, a Lexicon-created brand name, allows customers to effectively rent their cars through Turo’s app-based platform. Others, like Kyte, deliver rental cars right to your door. By the last count, there were nearly 50 car-sharing brands globally, with over 20 in the U.S.

As stated earlier, the challenge for traditional automakers, when faced with launching a new transportation product or service, is to either spin off a new brand (and new brand name) or to utilize the existing brand name, coupled with an additional moniker to create NEW-ness. Here are a few examples.

New Brand Name

When Atieva needed a name to signal superior performance, compete with Tesla and stand out among other EV brands, we came up with Lucid – an alluring name that accomplishes all of these goals. In 2022 alone, Lucid won the prestigious Motor Trend Car of the Year award.

New Subsidiary Name

The name OnStar was created for General Motors’ subscription-based subsidiary to signal safety, security and guidance. Stars are ancient, iconic images in cultures around the world, particularly important in transportation and navigation. Our research revealed that the combination of letter shapes and sounds in OnStar evoked a sense of safety among automotive consumers.

Existing Name + Additional Moniker

Uber set the stage as one of the most successful TaaS rideshare apps. Uber approached us with an ask: create a name for a membership that can house benefits for both Uber and Uber Eats, their online food delivery subsidiary. We created Uber One to do just that: communicate one membership that does it all.

Jon Bucci

In all these cases, traditional brands and newcomers alike must create names that offer excitement, originality and scalability to allow growth as well as inspire consumers. In this brave new world of automotive DTC, as well as the new product categories grown from this model, a name can help break through to generate early market share and help consumers become comfortable with a new way of doing business.

Jon Bucci (pictured, above left) is an advisor for Lexicon Branding, a leader in creating strategic company, product and brand names.