The Lesson U.S. Automakers Need to Learn From Tech

Earlier this month a Chinese smartphone company, Xiaomi, started delivery of its newest product: a car.

Yes, you read that correctly. The consumer electronics company’s new SUV, the SU7, beats Porsche’s Taycan and Tesla’s Model S in acceleration. What’s more, the car is fully integrated with Xiaomi’s smartphones and internet-connected home appliances, and is also compatible with Apple’s iPhone, iPad, CarPlay and Airplay.

It’s the most recent proof point of the automotive industry’s transformation into a technology-driven market driven by electrification and connectivity. “It’s a really difficult time in the industry, where the car companies think they’re still building cars. They’re not. They’re building software on wheels, and they don’t know it, and they’re trading it away,” Conrad Layson, senior analyst at AutoForecast Solutions, says in a recent CNBC article.

What Automakers Can Learn From Andy Grove

The year was 1993. Intel was about to launch the fifth generation of their 8086 microprocessor, the i586, or as it was called internally, the “P5.” Instead, under Andy Grove’s leadership, Intel did something no other company had thought to do: they named an unseen and yet critical ingredient in a computer: the Pentium chip (Pent for fifth generation, -ium for something elemental and strong like titanium). The name helped consumers decide which computer to buy and Intel soon became a multibillion-dollar brand. Just as Intel worked to brand the Pentium and “Intel Inside” of computers, automakers need to brand the technology that is powering today's vehicles.

Why Automakers Should Embrace Techy Branding  

Similar to Intel, automakers have the same challenge, as consumers won’t “see” the technology inside their cars but their buying decision will be increasingly based on the car’s technology, such as CarPlay. While this challenges many automakers’ assumption that the brand alone does all the work, it represents a big opportunity for automakers to demonstrate the potential for a technology brand to add significant value to the overall auto brand.

Auto Technology Success Stories

Arguably one of the most successful examples of a branded technology boosting sales is General Motors’ OnStar. GM’s technology needed to signal safety and security to drivers in a way that was both new and memorable. The solution: OnStar. The brand name tapped into ancient, iconic images of navigation in cultures around the world. Research showed automotive consumers felt a sense of safety.

More recently, ClearMotion, with its active suspension technology, has been able to bridge a long-held gap in the driving performance experience: either you feel the road (sporty) or you don’t (luxury). Their breakthrough branded technology has transformed the driving experience. ClearMotion suggests a smooth and seamless experience with a straightforward, transparent attitude. The word “clear” evokes the predictive sensory capabilities of the smart suspension system. The company recently announced a deal to supply their technology for 750,000 of Chinese EV maker’s Nio’s luxury sedan model ET9.

Today’s Naming Opportunities for Automakers

With the launch of 5G and the explosion of AI-powered technologies, consumers are expecting smartphone-like experiences in every part of their lives. The driving experience is no exception. This presents enormous opportunities for auto brands to identify technology-enabled experiences that align with their automotive brand values – and brand them for strategic advantage.

But today’s opportunities won’t become success stories like the ones above without foresight and long-term strategic planning. In an industry being transformed by electrification and connectivity, technology is a key driver of growth and a technology branding strategy is foundational. Don’t wait. Make technology branding part of your differentiation strategy to stand out in an increasingly crowded market. Because if automakers don’t take ownership of the technology that makes them stand out, the technology brands will.

Kennedy Placek (pictured, above left) is director of Partnerships & Client Services and Jon Schleuning (pictured, left) is program director at Lexicon Branding.