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Interesting people, insightful points of view and incredible stories on what’s popping and not popping in marketing, tech, and culture you can use to win immediately. Brands, Beats and Bytes boldly stands at the intersection of brand, tech and culture. DC and Larry are fascinated with stories and people behind some of the best marketing in the business. No matter how dope your product, if your marketing sucks your company may suck too. #dontsuck
DC: Brand Nerds. Back at you with a What's Popping version of Brands, Beats, and Bytes, and many of you brand nerds know that I hail from Detroit, Fort Deua Motor City, as does, uh, one of my two business partners, Jeff. He also hails from the the Motor City. And today's What's Popping has something to do with the origins of business. In the motor city.
JS: All right. Uh, LT, I think you gonna tip us off on this, so let's go.
LT: Oh yeah, J in DC this goes right to the foundation of, of where you emanate from as, uh, DC so, so alluded to. So I'm gonna hit you with some, some key stats regarding automobiles, uh, the car industry, and we all know the car industry. Is such a barometer of the economy and is, and, and is worth billions upon billions of dollars just in the United States and certainly worldwide.
So let me throw some key stats out at you, which I think really conveys the pivot point we are at, as it as it pertains to the automobile business. So first, number one. Only 25% of US 16 year olds earned driver's licenses in 2020, down from 40% in 1997. And this is according to data from the Federal Highway Administration analyzed by Green Car Congress. So that's a, I'm gonna, that's the first of key stats. Let me give you all three and then you all can comment. The next one is SMP Global Mobility Forecast, electric Vehicle Sales in the US could reach 40% of total passenger cars by 2030. And more optimistic, more optimistic projections for seeing electric vehicle sales surpassing 50% by 2030.
And then the third stat I'm gonna throw at you, the McKinsey reports. By 2030, 12% of new passenger cars are sold with L3+ autonomous technologies, which basically means driverless cars.
JS: Wow.
LT: Think about those three things here in 2023, and if you're sitting in the seats of any of these manufacturers and have anything to do with automobile business, how all of these things are impacting your business.
What's, say you, what's your reaction to this?
DC: Um, Jeff,
JS: I, I, I, I'd like to make a correlation, um, to something that, that I saw as a child and up through where we are today, and that is the banking industry. Okay. Mm-hmm. So I, I can remember, you know, when 5, 6, 7, 8, I won't tell the year, but before ATMs came about, you had to go in the bank.
LT: Yeah.
JS: Do you remember, did your mind, I remember Detroit Teachers Credit Union downtown. Right? I remember in this long live, so you had to go into the bank.
LT: Yep.
JS: Then they went to ATMs, where the, where it, it kind of dissipated. But I can remember, my, my godmother, I called Ms. Jackson saying, I'm gonna always go in the bank. I will never use an ATM. Okay. And then it moved from ATM to online payments where you didn't even have to leave your house. You have to leave your house to deposit a check. Right. So what's the correlation going into the bank is gas, gas cars. The at ATM is electric cars, and then online is like a autonomous vehicles. So that's going to be, in my mind, the progression and the adoption of that. And you're gonna have some people gonna say, I'm gonna always use gas cars, but you're gonna have a, you know, a fair amount of people that are gonna move to electric cars. You know, when, when the mileage gets up and people start to understand it. And then the autonomous vehicle. Which scares me, but I think one day it's gonna be a reality. You just don't know when. So I think all of it's going to happen. It's just, and I think electric cars, the bigger number that you shared in 2030, the over 50%, I think that'll happen in 2030. Um, I'm just not sure about when the autonomous vehicles will happen. So that's that, that, that's my take on the industry. It's very what the banking.
LT: I like that, Jeff, the correlation. D, what do you, what's, say you.
DC: I like that correlation too, J. Alright, LT, I wanna hit these stats again just to make certain, I've got the context here. So the first stat I heard you talk about was percentage of people who have driver's license at, what is it? 16?
LT: Correct?
DC: It's 16. So it used to be 40%, now it's down to 26%, right?
LT: 25%?
DC: No, 25. 25%. Okay. And then, By 2030, it's predicted that somewhere between 40 and 50% of vehicles on the road will be electric. Is that what I heard? 40 to 50%. 40, 50%. And then 12% by 2030 of these vehicles will be, have autonomous, uh, technology capabilities.
Is that what I heard? Yes. All right. So I wanna go way back. When gas powered cars coming out of Detroit, mostly were being launched across the country. There were some states that created laws to prevent cars, gas powered cars, from being sold in their states. And one of those states was California, one of, one of those states of California.
Like, don't bring, don't, don't bring those cars here. And then eventually the cars got there and then it flipped where the car lobby, the automobile lobby said, ease up on the public transportation, ease up on the public transportation. Yep. Now California in 2035, they are banning the sale of all gas powered cars, and they're not the only state. There are six others, and I will name them. Maryland, Massachusetts, New Jersey, New York, Oregon and Washington. All of them have have passed ordinances or laws that says by 2035, we don't want any gas powered cars here. That's not a long ways from now people. Brand Nerds, that's, that's pretty close. Which then brings me to something called Nudge Theory, cuz I'm want to tie this discussion to branding. Mm-hmm. Nudge Theory. So the nudge theory. Is, uh, is described as it says based upon the idea that shaping the environment, also known as Choice Architecture one, can influence the likelihood that one option is chosen over another by individuals. This is about what happens in our mind with choices. So the number one time when people are open to new brands and services is when they move.
That is when people are most open. Uh, I'm in a new area. I need new wifi, I need a new cleaners. I need to a, a new school. I may need a different vehicle or no vehicle. These major decisions are being made. When you move, it makes sense cuz a lot of stuff becomes open again to consider, to make a different decision.
LT: You make, you're pushing the reset button.
DC: Pushing the reset button. So what I'm wondering, Is in terms of brands, this feels like a reset button period. I love that you said that LT. So coming into 2035, this nudge theory effect of, okay, what's happening to nudge me to make a different decision. I believe this is the time where the next generation of powerful automobile brands are going to be established, and I think it's going to look different than the way it looks right now.
So that's, that's my, what's popping on this.
LT: D, I love where you're going and, and can I build off that, um, the things that come to mind, I've. The cars that I've owned. You know, gentlemen, the cars that we, Sherry and I have owned in the last 20 years have either been BMWs or VWs. Okay? Yep, that's right. I'd like to drive.
I like the way those cars drive. And what's interesting to me, if you think of the taglines that BMW the BMW tagline hasn't changed for a long time. One of the reasons why it's a great brand. "The ultimate driving machine," right? That's right. Um, yeah, for a while Volkswagen had the tagline, and I really liked it. "Drivers wanted," do you remember that tagline?
DC: Yes, I do Remember that. Yes.
LT: So when you think about those taglines, They as, as we're seeing these things encroach and getting closer, those both you, you'd almost have the, the tagline drivers not wanted when you have, right.
DC: That's right. Right. Yeah. That's right. That's funny.
LT: So, but where I'm going is, has a profound effect just using those two brands, a as a proxy. Um, and it, and it has a profound effect on all the brands because those brands have been predicated on people really loving to drive and enjoying driving when. Mm-hmm. The reality suggests that the, the Meta Universe, D, as you would say, is going in a much different direction.
DC: Yes. Yeah. Oh, that's fascinating. Jeff, what, what do you all think about that, brother? Yeah, I like.
JS: I, I love that as well. But I wanted to build on something that I think I heard you say D and I want you to kind of expound on that. You, you said the brand landscape for electric cars today will look different in 2035.
So today, when you think of electric cars, the first brand you think of is Tesla.
LT: Yep.
JS: Are you saying that it, you don't think it will be Tesla, it would be another brand, and if so,
DC: All right, so this is a simple math equation for me, Jeff. Yeah. The only cars that Tesla makes are electric cars. They don't make gas power cars, which everybody knows, right? All of the other manufacturers right now who make mostly petro or gas power cars or diesel, uh, power cars, they are in a race to do electric cars. So what I am se suggesting is, By, by the mere fact that you have one that only does electric now, and all of the rest of them are going to have to be, uh, doing mostly electric by 2035, at least in America.
We'll, we'll find out around the world. There's going to have to be some shifting. I don't know whether Tesla will be, will remain. Its number one in its number one position. Uh, but it's going to look different. And then here's what we don't know. Like you have another electric car brand now. Jeff called, I think it's Polestar. Yep. They're gonna be new entrance in, in this space of brands that we don't even know about that are gonna be at play. So I know what's gonna happen. Yeah. I, I, I don't, I don't think it, it can't be the same that it as it is today. So that's my answer to that. And then I want to go to, uh, LA Larry's question, but Larry, were you gonna say anything, uh, about that?
LT: Yeah, I would just add that, um, we know from our, uh, our, our friend, uh, Ed Collins, shout out to Ed, who spent a lot of years in the automobile industry.
Fords and the GMs and those, and those folks are, understand that they have to shift things hugely and they are behind the scenes. We don't know how they're doing it, but they understand that there's this huge cha change coming. Now, whether how that will manifest itself too is a huge deal. Right. Do you take. Do you take older brands and reshape them? Reposition them? Do you come up with new brands? Is it a combination of both? Um, but D, I, I think the, the thing we can all safely say is 2035 brand landscape is gonna be in something that we can't fathom. I'll just pause it. One, one quick thing. I think with Elon Musk and Tesla, I just have to say this. If he continues to do what he's gonna do, I think he's gonna ruin that brand. Unless he, unless he or they divorced themselves from that brand, and especially with all these new entrants coming out. That's my opinion. But anyway.
DC: Yeah. Larry, going back to your, your point about, uh, brands that position themselves, as for drivers, Volkswagen drivers wanted and then BMW, The Ultimate Driving Machine. I am going to find it very, uh, interesting to see how they adapt. Because where before one in, in, in this environment, you would have, uh, let, let's say, uh, a Lexus. Or a um, uh, probably Lexus where they say posh luxury, like you're riding on a pillow or even Mercedes. They have, um, an option on some of their, uh, higher end cars where they talk about dreams. Dreamscape, I'm getting the name wrong, but it essentially, it means, it, it sucks up the road. So you don't even feel any, any bumps or any grooves in the road.
LT: Lincoln's always had that too. D
Lincoln's always had that.
DC: Lincoln's Lincoln's already had that. Okay, thank you, uh, for that Larry. So our brands now looking ahead to this 12% autonomous in 2030. Are brands going to begin to, uh, position themselves? The brand that's about getting to where you want to go and doing nothing, right? Yeah. Working like it. This is, this is the, this is the ultimate multitasking vehicle, for example, is that what, what these brands are gonna begin to do as a way to undercut the brands that are about driving. Right? And then do the, do the, are the brands about driving, do they go even further? Right into that positioning and say they double down. You don't want to multitask, you want your hands on the wheel. You want to do that. So I just wonder what the brand positioning is going to be during that time.
JS: That, yeah, that's, that's great. Cuz if you, I wonder how much, when you think about this brand positioning autonomous vehicle, and the fact that drivers at 16, that that's gone down in terms of people getting driver's license, how much Uber has played a part in that because
DC: ah, oh, that's a great point. Where they wanna, without having life.
JS: The, when we were, when we were living in Detroit, if you wanted to get to from point A to to point B, you either had to rely on your parents. I I, the day of my birthday, I was taking my driver's test, my birthday. Yeah. Yeah, my son. Same here. Yeah, my son here, my son James, right. His birthday was August 4th of that year.
He turned 16, had a car in the garage and I had to threaten him. He didn't get his license until February of the next year. I just said, look, you can't have company. You can't do nothing until you get your driver's license.
DC: Wow. Wow.
JS: Yeah. Now, my daughter on the other hand, she got hers two days after her birthday. So, you know, different thing. But, but that was unfathomable with all my friends in Detroit. Everybody got their, their, their driver license as soon as they turned 16. But now that's changed because kids can get around without relying on their parents.
LT: That's exactly right.
JS: Vehicles, you know, is, is moves us, keeps us going in that direct.
LT: And if from a brand standpoint, if you are Uber and they've talked about this, I know that do, do you then, you know, does your brand correlate to that driverless car and you just pick up? You know, pick up folks. Um, I, I think the brand portfolio situation, if you are Be Rouge Motor working, which is BMW you keep BMW as D, to your point, you, you double down because there's always, I think in 2050 there's gonna be, people want to drive cars. I, I don't know what the universe is, but there's gonna be people who want to drive cars. But did then do you start another brand or acquire another brand? That's completely the opposite. That's D what you said is the, is the ultimate passenger vehicle. Right. Where you have, you do
DC: Right. The ultimate passenger vehicle. Yeah.
LT: So is it, that's why I thought this would be a great conversation for us because we're sitting here in 2023 and the world's already changing, and it'll be very interesting to see which companies, which brands really understand how much is it, it's changing and, and how much they get in front of it. Or they're playing from behind and they could be done.
DC: Mm mm
JS: Well, we shall see, set the blind.
LT: Is that a wrap?
JS: That's a wrap.
DC: Yes it is, brother.
LT: Great conversation Brand Nerds.