You're Brand Right!

Brand management, once scorned by many in the auto industry, is becoming more important to it than ever, says Jurgen Hubbert, a member of DaimlerChrysler AG's Board of Management.

“Kids grow up with brands, and we're convinced brands will sell in the future, especially as new customer groups come into the picture,” he says.

“What's important is multi-brand management.”

He says it's essential for a modern auto company such as his, with a wide and global line of vehicles, to position each product properly in their marketplaces, making sure they and their brand attributes hit the intended consumer groups.

“The challenge is managing the multiples. That's why we developed a brand bible since the first day of the merger of equals,” says Hubbert, referring to the 1998 Daimler-Benz AG and Chrysler Corp. match up that has not been without problems, in civil court and elsewhere.

Meanwhile, Hubbert says increased competition and over-capacity at auto plants has put profit pressures on auto makers and dealers alike.

“The U.S. market is pushed by incentives. Even with those, the Big Three lost market share,” says Hubbert.

Although DaimlerChrysler uses incentives, Hubbert clearly is no fan of them. He offers this do-the-math point:

“The average incentive is $2,700. Multiply that by 16.6 million in annual vehicle sales, and the cost of incentives is nearly $45 billion. That's without improving market share, without putting anything new on safety wise.”