Industry Practice - Mentalities and Approaches - Sage Quotations

Earnings releases for Q1 2014 continue to be reported, and as they do, the financial markets react accordingly; both rationally and irrationally. When all of the eleven major automotive players have submitted their summaries and presentations, investment-auto-motives will obviously provide its well established provision of 'Couples Ratios'. Doing so at a prescient point after the immediate reactive volatility has settled.

[NB it should be stated that the Q4/FY 2013 analysis was intentionally not provided given what appeared strong 'peaking' and 'barrel-rolling' within many corporate share-price graphs, then suggesting a short-term pull-back and price contraction. This did indeed arrive with the usual high-volume stock rotation ploy of institutionals and investment banks, moving from cyclical-orientated stocks which had surpassed fair-value toward other stock classes. Portions of funds were no doubt were directed toward what became the tail-end of the notional 'growth stories' of tech and bio players, itself soon heavily contracted as early-birds took profits (at the cost of institutionals). With presumably a greater portion taken 'off the table' awaiting the return of fair valued industrials, associated services and other macro-related companies; the cheap stock era now a very distant memory].

Instead of the immediacies and detail of automotive stocks - various back to 'fair value' having 'peaked' and 'rolled'  - this weblog provides a far more esoteric and philosophical tone.

At long...long...long last, the real economies of the hardest hit by the financial crisis and sovereign debt crisis are demonstrating new signs of 'green shoots' growth vitality so counter-balancing and substantiating the previous ferver of financial markets confidence. This 'traction' theoretically self-perpetuating, so feeding further business expectation (whilst in the midst of continued debt deleveraging, 'lean' inventory management and necessary 'thin' labour levels) and so new investment.

Given the immense time-lag if the recovery - in real terms nigh on a decade long - much will now be expected of those in the younger generation, those in their twenties and thirties who, unlike their 'over-exposed' cynical elders, imbue the much needed optimism.

This state of affairs is seen within the story-lines of the 'New Troubleshooter' TV series, Digby Jones stepping into the modern-day shoes of Harvey-Jones, demonstrating how many of Britain's (and no doubt Europe's and America's) oft family run SMEs must substantially "raise their game" if they are to compete within what is now a far flatter and intensively competitive globalised commercial world; with the obvious intrinsic message of "higher value", "brand generation" and (to rehash the 1950s and 1970s edict) "export or die".

Previously investment-auto-motives relayed the wise learning and thoughts of many acclaimed 20th century investors, so to compliment, at this very important juncture within the new global (re)growth story, it is worthwhile re-absorbing the broader business perspectives of well known and less famous 'sages'.


Prescient Quotations -
in no specific order

"Business has continued to be more interested in thinking, in general, more than any other sector of society. The explaination for this is because there is a reality test; there is a bottom-line. There are sales figures and profit figures. There are results."
(Edward de Bono - 2010)

"Loose ideas on the subject of business will not answer. It must be reeduced to something of a science. It has principles, upon a knowledge and an application of which. success in it depands"
(Christian Nestell Bovee - 1862)

"The performance of business leaders during the next decades will play a major role in determining not only business but political and social trends for a long time to come. Principle reasons being:
a) business leaders control the economic well being of enterprise and stockholder
b) the course of business shapes public opinion
c) thus business leaders shapes public opinion

So in addition to his/her prime responsibilities of managing for profit, the business leader is faced with new and larger responsibilities. And at the same time the immediate job is increasing in complexity. Consequently, the imposition of additional responsibilities makes this nation's task of developing an adequate number of properly equipped executives leaders a staggering one indeed."
(Marvin Blower - 1949)

"What I must understand is why someone will continue to get out of bed in the morning once they have all the money they could want. Do they love the business or do they love the money?"
(Warren Buffett - 1999)

"The man of business knows that only by years of patient, unremitting attention to affairs can he earn his reward, which is the result, not of chance, but of well deserved means for the attainment of ends."
(Andrew Carnegie - 1913)

"The men (and women) who succeed are the efficient few. They are the few who have the ambition and will power to develop themselves"
(Herbert N Casson - 1933)

"Goodness is always an asset. A man who is straight, friendly and useful may never be famous, but respected and liked by all who know him. He has laid the foundation of success and will have a worthwhile life"
(Herbert N Casson - 1948)

"Part of America's industrial problems is the aim of its corporate managers. Most American executives think they are in the business to make money, rather than a product or a service. The Japanese corporate credo is that a company must become the world's most efficient provider of whatever product and service it offers. Once done and continued, profits follow"
(W E Deming - 1982)

"You can hardly have too much harmony in business. But you can go too far in picking men because they harmonize"
(Henry Ford - 1922)

"If we are all in agreement on the decision - then I propose we postpone further discussion until our next meeting, to give ourselves time to develop disagreements and better understand what the decision is about"
Alfred P. Sloane - 1920s)

"Every new development, highway, railroad, steamship line, building operation, whether a drainage project in Old Greece or a new water system in New Peru, means added use of the automobile".
(Walter Chrysler - 1920s)

"There is only one social responsibility of business. To use its resources and engage in activities designed to increase its profits, so long as it stays within the rules of the game. Which is to say, engages in open and free competition without deception or fraud."
(Milton Friedman - 1970)

"Perpetual devotion to what man calls his business, is only to be sustained by perpetual neglect of many other things".
(Robert Louis Stevenson - 1881)

"Our main obligation is not to mistake slogans for solutions"
(Edward R Murrow)

"People err when they think they can be inhuman exploiters in their business life, and loving family members at home"
(Smiley Blanton)

"It is unfortunate that we can't buy many business executives for what they are [actually] worth, and sell them for what they think they are worth"
(Malcolm Forbes)

"If all economists were laid end to end, they'd never reach a conclusion"
(George Bernard Shaw)

"Business is infested with idiots who try to impress by using pretentious jargon"
(David Ogalvy)

"Real riches are the riches possessed inside"
(B C Forbes)

"An organisation's ability to learn, and translate that learning into  action rapidly, is ultimate competitive advantage"
(Jack Welch)

"Being good in business is the most fascinating kind of art. Making money is art and working is art...and good business is the best art"
(Andy Warhol)

"I am always doing that which I cannot do, so I may learn how to do it."
(Pablo Picasso)

"We have not noticed how fast the rest have risen. Most of the industrialised world, and a good part of the non-industrialised world, has a better cell-phone service than the USA, they have better broadband, America 16th down the list. All the while we are told by politicians that the US is #1. Whilst nearly a third of our school system is disfunctional"
(Fareed Zakaria - 2010)

"Sooner or later, those who win are those who think they can"
(Paul Tournier - unknown)

"Ambitious people climb and climb, with great labour and incessent anxiety"
(Robert Browning)

"The reasonable man adapts himself to the world. The unreasonable man persists in trying to adapt the world to himself. Therefore all progress depends upon the unreasonable man."
(George Bernard Shaw)

Auto Industry Practice – EM Business and Product Strategy – Cross Cultural Learning (Part 2)

Part 1 of this web-log conveyed the macro notion that the cultural paradox of 'glocalisation' continues to both enthuse and confuse corporations, as cultural identities become ever more layered and so complex whilst the very nature of mass and niche consumerism re-orchestrates new opportunities for cross-cultural paradigms.

This Part 2 undertakes a micro orientated review of the sociological awareness – both weak and strong – of various auto-sector players' product strategies in the past; so as to remind of lessons once learned, but oft forgotten.

This to span:

- Early era efforts of auto-globalisation

- Case studies of ill-contrived 'glocal' business plans

- The rigour of Japan's “deep knowledge” approach

- Examples of well-contrived 'glocal' new product development

Yesteryear Automotive Globalisation -

Since the earliest days manufacturers sought to introduce their largely 'home-grown' products into new foreign markets, seeking new income streams, in-market dominance and corporate expansionist power. Typically seeking to offer a vehicle 'as is' if suitable, or through mechanical and features adaption to satisfy the climatic and road/track demands of specific geographies.

Given the generally poor worldwide road conditions of the early 20^th century, even in the industrialised West, the first decades of international mobility relied upon a necessary robustness built into vehicles, hence a Model T Ford that could operate both across the USA's Death Valley and the Australian Outback, and at the other end of the spectrum a Rolls-Royce 'Silver Ghost' could equally traverse countryside tracks within Britain and India.

However, by the mid 1920s the internal competitiveness of western markets, feature offerings and customer demands, versus the still largely basic transportation needs of more rudimentary foreign markets, meant that regionally defined 'sub-species' of specific models began to appear in order to balance the offering vs demand equation.

As seen with consolidation of European marques into the larger conglomerates, as part of their own global expansion drive Detroit's “Big 3” acquired foreign interests in the “going concerns” of automotive manufacturers and/or associated coach-builders, either partially, though typically completely. So as to gain early entry in what would become yesteryear's often colonially related new growth markets.

As vehicle sales grew in such semi-foreign markets through the 1930s and 1960s in line with underlying GDP growth, so greater attention was paid to the engineering of what evolved as perceptionally regionally specific vehicles. Though the economies of scale that provided profitability demanded that core homeland platforms be used, much was undertaken to maintain local and regional identities and thus maximise overall global sales.

1930s Australia saw the rise of the 'Coupe Utility' from Ford and GM Holden, models effectively transplanted from the USA where they were less favoured but well aligned to antipodean needs, as well as in 1948 the notionally “All Australian” Holden 48-215, actually born in Detroit but assembled in six Australian plants and acting as an industrial attraction hub for new sets of suppliers; all part of Australia's own national agenda toward industrial modernisation of the time.

Likewise, Brazilian examples include in the 1970s the re-deployment of a Renault 12 based model itself inherited by Ford as part of its own regional expansion and named the Ford Corcel. With in 1980 Volkswagen's 'hybridised' creation that was the series one Gol, a more modern Golf related body structure and style but with the cheap and reliable air-cooled engine of previous VW cars; also targeted at South Africa.

These were indeed successful case studies which demonstrated how yesteryear's fringe markets required simple, low cost products derived from simple, low cost business models, in what were recognised as comparatively undemanding markets seeking most vehicle types.

Poorly Contrived Sector Strategies -

However, the opposite is also true, wherein what were subsequently seen as poor product development strategies failed to capture the mass interest of a developing marketplace.

As vehicle demand shifts from the initial 'base-line' volume generated by governmental and industrial users who purchase with obvious 'cost-benefit' rationale, and on toward the greater volumes of private consumers and private-like business users, so the ability to “read” the marketplace becomes ever more complex. And so plotting and formulating the business case evolution of specific models becomes more challenging.

The challenges of entering such markets are typically hefty enough, and historically have required deep corporate pockets to maintain not just presence but to set set the standard. Per unit profitability is typically degraded by issues such as import tariff costs on whole cars, CKD packs and component parts, and even if a VM commits to the creation a fully fledged manufacturing facility, and thereby acting as a hub attracts a mixed multi-national and indigenous supply base, per unit costs remain comparatively high given the supplier companies' desire to see a return on their investments.

Thus such a move into developing markets has historically requires major long-term funding capabilities; as seen by the likes of Volkswagen and FIAT in South America during the 1960s and 1970s, and GM and Volkswagen in China through the 1990s.

Such in-market demand dynamics and the initial cash-burn means that getting it right is paramount for both well established global manufacturers and the newer crop of EM based firms seeking greater regional and international profile.

The following are simplified case studies which illustrate how wrongly directed over-ambition in the chase for foreign sales have failed the business ambition of 'glocalism'.

The Leyland P76 :

Prior to the 1990s commodities boom, beyond meat, wool and semi-precious stone exports, Australia was largely a self-contained economy, boosted by its British-American political ties as a distinctly strategic out-post sat within the Asia-Pacific; but which would ideally be self-supporting.

Given Britain's sovereignty, unsurprisingly British vehicles were prevalent initially, from the importation of Edwardian Lanchesters to 1920s Austins, to 1950s and 60s Land Rovers, which came to be locally assembled and latterly wholly manufactured, alongside original Mini and the Australia re-engineered large Kimberley.

Under British oversight a US-Australian trade agreement was established which assisted the sales of larger V8 and IL6 engined Ford, Holden and (Chrysler) Valiant cars and variants, vehicles which did not directly compete with the BMC Australia's typically smaller engined products, the volume sales excluding marginal Kimberley. But latter 'open-door' trade policies with Japan and Europe allowed for the importation of smaller IL4 engined vehicles which proved to be whilst technically unsophisticated both reliable and cheap; so in effect matching, sometimes bettering and under-cutting UK derived vehicles. By the late 1960s this caused yet another blow to the British motor industry.

Under the 1960s consolidation the UK industry, BLMC, (later BL), absorbed the various loss-making UK firms of Austin, Morris, MG, Triumph and Jaguar-Daimler to try and find inter-firm synergies, rationalise new product development, and cherry-pick new market possibilities.

One of these was to focus upon the still relatively buoyant Australian market.

Recognising that BLMC could not build a business model to fight the Japanese and Europeans based upon the price of smaller cars, it instead chose to leverage its technical advantage, directing that apparent competence directly at the higher price-point and higher-margin large car class and so versus Detroit's 'Big 3'. Seeking to build upon the small market share Kimberley had captured with an avante garde proposition.

BLMC management convinced board executives that Australia's own entrepreneurs and senior managers had themselves morphed into highly aspirant, very worldly, individuals, keen to buy a technically advanced large car which spoke of Australian confidence. This may have been the marketing department's 'blurb', but the fact was that the conglomerate metaphorically had “its back to the wall”. And so the idea of a dedicated upmarket Australian vehicle was born, its USP being more futuristic styling and engineering and not the outcome of simply a cosmetically altered evolutionary model variant.

The outcome was the “wholly Australian” P76 large sedan and its sibling the Force 7 coupe; itself establishing new engineering directions amongst the national supply chain firms to hopefully raise the bar for Australia itself. 

Unfortunately, the fact was that upon its arrival the market was effectively saturated with what were viewed as satisfactory vehicles which whilst hardly advanced actually sold on their relative simplicity, with vital reliability both in towns and deep into the countryside. Australian entrepreneurs and senior managers sided with staid GM Holden, Ford and Chrysler-Valiant cars which although less differentiated at the premium-end than the P76/Force 7, were robust, easily maintained and repaired. Moreover, during the interim, Detroit had improved its various brand standings with indegenous V8 racing at circuits such as Bathurst etc.

Detroit's Big 3 had global profits, cash at hand and scale economies by which to drive down costs and wage price wars as necessary, they had wide model-line differentiation for its body and trim variants and country-wide dealership and garage networks. In contrast, BLMC/BL during this period saw its combined multi-marque profits dwindle, its cash depleted and economies of scale unrealised as certain 'head to head' in-house models were discontinued in favour of the better positioned brand.

Surrounded by more adept American, European and Japanese foes through the tide of globalisation, BL's hope was that the P76 / Force 7 would encourage a corporate renaissance. Instead an unrealistic BL had effectively created a car which nobody wanted.

[NB the lesson here is that whilst even the most fortunate of developing markets' consumers do indeed aspire to improved products and services, ultimately purchase rationality will typically underpin the decision process of something as costly, functionally important and service orientated as the car].

Africar -

As a raft of African nations gained independence from previous colonial governance in the 1960s and 1970s, it was envisaged by some that the new republics would continue to seek out their own fortunes, with greater disconnection from the western industrial interests. Interests which though having largely created large scale industry and commerce in these countries, were also seen to be exploiters of national mineral, commodities and human resource wealth.

To assist such ambitions of African Independence leaders, a new crop of idealistic western entrepreneurs emerged, seeking new methods by which such states could create for themselves and kick-start their own circulatory economies.

Once such in the field of light commercial and personal transport was “the car for Africa”; toted as 'AFRICAR'. Its inception came in the early 1980s, founder Anthony Howarth long associated with Africa, believed he recognised the need to develop an affordable, sturdy, capable and cheap to operate vehicle that would do for Africa what the Model T had done 70 years earlier for the USA and elsewhere.

Both N.Africa and Sub-Sahara countries had long relied upon the Peugeot 403/404, 4x4s such as Land Rovers and LandCruisers, aswell as later the full-size US pick-ups. But these were effectively high cost vehicles given their rarity and usage demands through the 1950s/60s/70s.

Howarth believed that he could create a market targeted spiritual successor to the likes of the legendary Citroen Mahari (light 4x4) and lesser known 'FAF', which were a breed of light vehicles which themselves had used 2CV chassis, running gear and systems. These parts had long been financially amortised as per tooling etc and by the late 1970s were cheap off-the-shelf items.

These primary parts together with a general supporting structural body made from plywood sheet and polyurethane mouldings would supported the idea of a low-cost vehicle. The concept vehicle was constructed in California in 1976 – just as FAF was mid-point its lifespan – and proved functional as a daily runabout over the 2 years, before the project proper was under-way.

[NB At this point investment-auto-motives it seems plausible that there were very probably West Coast interests (beyond Howarth) who sought a “technology disruption” of the conventional auto-sector to capture any such value-added. (See previous recent weblogs)].

Three prototypes were built: two standard wheelbase 4-wheelers in car and pick-up guises and a more novel 6-wheeler pick-up with extended wheelbase and glazed van cargo area. These were tested via a long distance trek from the Arctic Circle to Nairobi, Kenya spanning long distance and cold to hot climates, given much public attention with press and TV coverage, the logo of Britain's then new Channel 4 TV station prominent within the 'AFRICAR 1984' door graphic

After the apparent successful test regime, plus Howarth's apparent patriotism that (after the BL story) Britain ought to invest within its home-grown motor industry (to off-set the economic might of London's financial services sector) [a familiar call today], led to a new AFRICAR production facility established in Lancaster, NW England.

[NB Though this in itself goes against the grain of local African production, even if for ongoing technical feasibility or promotional reasons. on such a simple vehicle-build project; possibly put in place to attract broader UK sourced funding streams]

Apparently detailed reports highlighted the feasibility of the vehicle in both developing and developed markets so broadening its scope.

However, the idealism was not to last.

Whilst the concept on paper appeared sound, and various smaller Asian state 'agreements in principle' had been affirmed for local manufacture, as well as oddly Australia, (possibly as a base for the pan Asian goal), financing and cashflow problems became problematic.

As for Australia, the vehicle was the polar opposite of the large car, 4x4 and SUV preferences of the great majority buyers and users, from GM and Ford Utes to Toyota 75 series 'Troop Carriers' of the period, so quite where the obvious target customers were was a complete mystery. As seen with P76 above, they would stick with what they trusted and suited.

Whilst the Burma (now Myanmar), Butan and Nepal (aswell as larger Bangladesh) had agreed in principle to local manufacture, the fact is that the car had been designed for generally flatter landscapes; three of these four places with much hilly geography which would have been too strenuous for the relatively under-powered AFRICAR, negating proper use and causing reliability problems, even if the original long distance prototype test argues otherwise.

Crucially, a new breed of African leaders sought to be seen by the wider-world, and especially the West, as modern and contemporary nations which could stand proud amongst others. Thus the idea that Africa be broadly purveyed as a specialist economic case requiring specialist solutions was an anathema to people's seeking modern ways and similar transportation methods, whether public, and indeed especially personal.

This political atmosphere, plus the most importantly, the influx of hardy, easily maintained and repairable older Japanese model imports from Europe, Japan and elsewhere – vans to pick-ups to cars, often very over-laden but able to operate given their “over-engineering” for durability – quickly obliterated the apparent need for an AFRICAR ideology.

In this case, globalisation's own demand and supply dynamics, though operating at the lower-end of the obviously visible spectrum (at least for western eyes) irrefutably altered the African market landscape for Howarth. This dynamic should not have gone unnoticed or possibly deliberately ignored.

Moreover, the manner by which the project proceeded was highly questionable.

Including, what appears an unstated reverse engineering of a given (FAF) concept, then seeming progressed from a supposed clean sheet, when actually simply re-running the proven Citroen rationale from 50 years earlier. Plus the fact that it appears Howarth himself risked little finance and no collateral. Instead utilising a girlfriend's home and income as required collateral on a bank loan. itself spent on over-costly professional services at the banks insistance.

Overall, the project's approach and plan, and its funding methods and cost absorption rates (cash-burn) will have appeared concerning to any independent analyst of the time. The AFRICAR project ultimately posed more questions than it answered.

Proton's “Islamic Car” -

Between the British and Japanese powers during WW2, Malaysia has effectively sought to both balance seek advantage from both western and eastern interests ever since. Previously, as a central Asian domain, the country was also much entwined with Chinese trade and commercial influence plus Sino-population influx; this situation re-risen with the more recent rise of China.

Throughout the latter third of the 20^th century Malaysia was on the path to modernisation, putting in place infrastructure and industrial development like the basic processing industries from which higher value goods could be created to satisfy governmental, commercial and private needs; including trucks, motorcycles and cars; as internal fortunes and GDP grew

Seen as a high-point during this period was the inauguration of the “National Car Project”, which under the oversight of the government strategic investment and development arm named Khazanah Nasional, came into being in 1983, and named 'Proton'.

Proton Holdings Berhad (referred to as Proton or Proton Cars) was formed from the joint venture partnership between itself and Japan's Mitsubishi Motors, the latter supplying the tooling, jigs etc to allow for the manufacture of its vehicles.

The first 'National Car' was the compact sized Proton Saga (based upon the Mitsubishi Lancer/Colt). Interestingly, unlike similar agreements which only allow for the utilisation of older vehicle designs, Mitsubishi provided Proton with nigh-on new technology given that the car had only been available for 2 years in Japan when it was released under the Malaysian badge in 1985.

[NB an interesting aspect of this vehicle package was the manner in which from the internal rear passenger seating viewpoint, the middle of the car (the 'B posts') appeared slightly wider than normal, so providing for an open environment for the small cabin].

This landmark car was produced for 23 years as first Saga and updated Saga Iswara, and became a Malaysian icon in its own right. From the beginning provided a substantial income stream from which Proton sought bigger and better ambitions for export growth.

Those monies allowed Proton to develop an expanded range of vehicles, at first similarly based upon direct Mitsubishi technology and tooling transfer, but became more indigenous in design, vehicle engineering and engineering production as Proton grew its own capabilities in-house; yet maintaining the Mitsubishi JV (and other JV agreements) for specific vehicle projects. This lead to a succession of vehicles including in 1995 Satria, Putra, 1996 Tiara (using Citroen's AX model), 2000 Waja, 2007 Persona, 2008 New Saga, 2009 Exora, 2010 Inspira (once again deploying a later generation Mitsubishi Lancer), 2012 Prevé, 2013 Suprima S and new Perdana (using rebadged Honda Accord (for government services only).

However, confidentially, successive Proton executives would no doubt admit that the process has been a constant battle given the micro and macro headwinds faced from the early 1990s onward.

These include the launch of Malaysia's '2^nd Car Company' in Perodua (with a Toyota-Daihatsu agreement with technically good and affordable small cars, putting Proton and Perodua at logger-heads as Saga decreased in price to maintain marketshare, the lowering of import tariff rates aiding competitors, the need to export production around Asia and beyond, and the 1997 Asian Financial Crash which massively damaged Malaysia's economy, undermined its growth plans (eg delayed and shrunk Proton's original 1998 delivery date for the the multi-activity 'Proton City' in Perak province to 2003).

In the midst of these challenges, Proton realised it would need its own brand relevant USP. One which circumnavigated the product, brand and general global marketing strength of Western and Japanese firms; with also the growth of S.Korea seeking to replicate Japan's success.

So a strategy which avoided head-on collisions with the firmly entrenched and powerful, and one which could also serve as a Malaysian national agenda vehicle – internally and externally -given Proton's effective state ownership.

Proton sought instead to self-direct itself as distinctly different by deploying Malaysia's Muslim cultural heritage so as to stand as a 'loud and proud' purveyor of what was to be termed the ideology of the 'Islamic Car'. Since its inception, the Proton logo was a representation of the crescent moon and 14 pointed star taken from the national flag; the crescent moon endemic to Muslim identity.

This seemingly heavily religious bias stemmed from the then Prime Minister's desire to re-balance what he saw as the overt cultural and so income bias of globalisation toward western multi-nationals. Serving as PM between 1981 and 2003, Dr Mahathir Mohamad delivered the raft of change required to transform Malaysia into a modern society. He was a strong advocate of developing countries gaining greater autonomy from western interests, and viewed the relatively advanced Malaysia as the promoter (and in turn gainer) of such a ideology.

Central to this was the idea that those Muslim countries could and should better co-operate to raise their economic activities and global standing, with the deep and broad value-chain of an Islamic Car Industry able to deliver the ambition. Proton was to serve this goal.

Unsurprisingly an alternative 'entry level' brand personality was devised for European export hopes, with a modicum of success in the UK, but little elsewhere These were intended to provide good unit and operating margins from the FX differential, which could then be re-invested both at home and help support the grander worldwide strategic plan. But the cars with low prices and lower quality levels sold poorly in such demanding EU markets and Proton became detrimentally known as a fringe player, arguably damaging its reputation.

A positive note was the Jumbuck small pick-up “ute” in Australia which echoed the penchant for the 'Coupe Utilities' of the 1930s, and recently good ANCAP scores (which may have been possibly subtly massaged given Australia's desire to promote inward investment from Asia into its own auto-sector).

However, export dreams within Asia and the Middle East were better achieved, the pattern growing throughout 1990s and early 2000s, which helped build a basic network of distributors and dealers across the world at its peak, but since retracted to 26 contries.

Foreign demand was needed to offset the sales decline seen within Malaysia. Dropping from 40% share in 2005 to 32% in 2005 given changes in National Automotive Policy and what was seen as lagging product quality issues, seeing Perodua take the market lead. By 2011 the domestic share was 26% and by 2012 at 22%, declining again by 1.3% between 2012 and 2013.

Whilst exports to other Asian and Middle-Eastern Muslim nations have been a patchwork of good, middling and poorer, the company recognised that the “Muslim Car” ideology was untenable. Since the markets in which Proton wished to sell themselves also wanted to promote auto-sector FDI as part of their own growth plans. Moreover, given the high costs of vehicles, purchasers do so overwhelmingly on the basis of perceived cost-benefit and relative social status. Both factors irrefutably connected to the specific critical success factors within product quality; and necessarily formulated within the overall and model project business cases.

To this end, recognising that it must strategically steer itself toward a better tomorrow, as of 2004/5 the company altered its Muslim-esque logo to that of a yellow tigers head within a green roundel upon a blue shield, and then in 2007 undertook a JV with the Chinese company Youngman to which it sent CKD kits for local Chinese assembly.

However, as seen recently with the plummeting of Chinese branded vehicles, it seems that once again Proton is being stymied by the innate global success of the big western firms.

Since 2012 the company has been held by DRB-HICOM, a publicly listed conglomerate with additional interests in Malayisan contract manufacture of vehicles for foreign multi-nationals, property and infrastructure. Exactly where it goes from here will be a case of “watch this space”

Japan's Rigorous Approach -

History foretells that those corporations which have been not simply ambitious, but crucially analytically adept at reading the cultural nuances of various global markets, have better planned to reach their international expansion goals.

By the mid 1960s it was recognised by some leading automotive minds that far more cultural learning than had been traditionally been present was required so to provide success in foreign markets. Of course the more foreign and culturally removed any company was relative to its target export market, the greater the learning required.

Tasked with the post WW2 export drive through the late 1950s and 1960s in consumer electrical and vehicle markets, it was this innate 'foreigness' of Japanese manufacturers relative to their target of North America, which demanded and drove powerful new insights.

This difference spurred many Japanese firms onward to effectively properly de-construct and analyse. Not simply the general market sales data, nor the learning from engineering 'tear-down' of successful competitor products, but little by little to gain far more 'real-world' insights regards the preferences, behaviour patterns and psychological drivers of its prospective customers.

So aswell as Japan's revival of Deming's teachings regards achieving high quality production levels, Japan chose to truly appreciate the subtle often unrecognised traits of American culture.

Beyond the initial marketing success of the 1969 Datsun 240Z, was the work undertaken prior to the launch of the 1989 Lexus LS400; a case study which taught the western auto-sector about the vital importance of “cultural and indeed multi-cultural learning”.

Such remarkable leaps in consumer understanding were albeit slowly adopted by 'the best of the west', often in a fragmented manner given the very different philosophical approaches and methods between Japan and western cultures.

[NB It was the Japanese tendency toward obsession / perfection and the idiom of the “7 questions of why?” drawn from from zen-buddhism, which allowed a deeper delving into prime consumer matters.

Invariably, Japan's self-created advantage did have a general affect across all manufacturers, and slowly the topic of extended consumer insight and latterly cultural learning has taken hold as a distinct input – albeit with varying competence - into the new vehicle development process.

Today, as and when feasible given budget constraints and managerial focus (ie fire-fighting vs true strategic insights), the need to appreciate and inject country and regional specific cultural learning is far better recognised.

The following is a short list of just some of the notable NPD (New Product Development) cases that have been established; the best serving to promote what has come to be known as in-house “Auto-Cultural Laboratories” which exist typically interweaving the Marketing and Design functions.

Notable NPD Case Studies -

Lexus in California:

Toyota's efforts at entry in the American and global luxury car segment would see a level of research dedication never experienced within the auto-sector either before or since. The 'flagship' project later named the LS400 would need to encapsulate all of the conscious and subconscious key elements which as a whole would provide more than the sum of its parts. Do do so, beyond coneventional analysis Toyota set out to get under the skin of premium car buyers. Recognising that because of sunny climate and social progressiveness, Californians were more typically more experientially experimental and so less blinkered to new offerings versus the typically more staid east-coast buyer.

To this end Toyota deployed senior executives to for a necessarily extended period to live as wealthy Californians. Their task to methodically understand the American premium car universe, ranging from the quality and nuances of competitor product from the Germans, Americans and British, through to qualifying and quantifying those perceptional constructs. Furthermore, in an anthropological manner, to desconstruct the 'tribal' behaviour of the buyer set: from the decibel levels of tyres upon freeway concrete that cause aural annoyance to the social coding of golf-club car-park vehicle heirachies, to owner interaction with car-parking valets and the associated key-fob snobbery which exists at expensive restaurants, so in turn affecting service levels.

This case study has by now become well engrained in mindsets of auto-industry executives and led to similar initiatives, though typically not as thorough, from others seeking to mimic Toyota's success.

Mazda in California:

In the mid 1980s with a need to break-out beyond its overtly conventional brand persona in foreign markets, Mazda sought to create spiritual successor of the discontinued small British and European sportscar.

The Austin-Healey Sprite, MG Midget, Triumph Spitfire and Alfa Romeo Duetto had been glamorous and affordable, but a fringe and heavily cyclical breed. These and others had been lost after regional auto-production had been necessarily rationalised and consolidated in the quest for mid 1970s corporate survival.

Moreover the recessionary effects of the 1970s brought forth the mainstream introduction of hatchbacks like the Golf, Fiesta and Renault 5. These in turn spawned respectively GTI, XR2 and Grodini variants, which on cost and safety grounds, effectively replaced those earlier open-topped sportscars.

In a bid to escape its staid character, Mazda sought the return of the affordable sportscar. It executives ran an internal competition between its Japanese and US design studios, the 'truest' archetypical concept (assisted by the alloted conventional vehicle packaging) derived from the unsurprisingly sunny climbs of S. California; itself the target market.

The Miata/MX-5 was internally recognised as to be a direct simulacrum / facsimile of what had gone before, created from a similar 'purist' perspective. However, to enhance the experience into a type of small sportscar hyper-reality, the concept's details were philosophically aswell as functionally deconstructed and analysed. The best known exercise of this process being the first vehicle to receive scientific acoustic tuning of the exhaust system.

Ford in Britain:

Whilst the blue oval has had various design and concept engineering centres at the Dearborn, USA HQ and elsewhere around the globe focused upon vehicles, it was in Dunton, Essex in England (which had historically had served the old Dagenham factory) that a philosophical cultural leap forward was made.

Dunton's own workload had reduced since its heyday serving Ford of Britain and its own semi-dedicated cars, as Detroit sought to better coalesce and co-ordinate the global car platform engineering mentality that appeared with (RWD) Sierra/Topaz platform synergies and the Mk3 (FWD) Escort. This had centred primary engineering work in Dearborn, USA and Cologne, Germany.

Dunton itself became more engine development orientated, along with other specialist research and development work. But the facility also recognised its need for re-invention so as to remain useful within the blue oval empire. Part of this self-re-invention of the early 1990s was an early internal appreciation for the impact of future demographic trend change; specifically the ageing populations of advanced nations.

This inevitable 'grey wave' would have a large effect on car buying preferences and behaviour to which Ford would need to respond.

Seniors knew its own employees across Marketing, Engineering and Design - typically in their 20s and 30s - would need to better appreciate the mindset and lifestyle of this older buyer group. One important aspect was the physical effect of ageing, specifically the decrease of personal capabilities. Learning would be fed-into the design process. 

With assistance from appropriate academic institutions, the idea of possibly the first “OAP suit” was born. A full-body prosthetic suit, which instead of aiding motion, had the deliberate intention of restricting physical prowess for the younger wearer. So as to metaphorically (though quite literally) “get under the skin” of an older person, and his/her required interactions with a potential new vehicle, both in the showroom and during ownership.

The results of the process fed into the dimensional and access/egress specifications of a new generation of vehicles from the late 1990s onward – typically taller cars with bigger door apertures - which were simultaneously also advantageous to 'family functionality' for both the nuclear family group and the extended family group (including grand-parents).

The OAP suit was latterly adopted by other corporations for consumer testing and development aswell as charities etc to demonstrate the effects of ageing.

Peugeot in France:

In recognition of the the dual trends of an ageing European population and the popularity of micro-cars in France, PSA executives critically rationalised its introduction of the wholly logical but somewhat unconventional 'tall-boy' 1007 city-car. With seating for 4 set within a short wheelbase and easy entry and egress via a 2 large sliding doors, its model specific business plan was enabled by the platform economies of scale from its 'parent' cars (the 206 and C3).

Thus with a super-mini's (B-C segment) vehicle width but short (near A-segment) length, the package provided an altogether new offering to Europe. Interestingly, given greatly lowered production / ex-factory cost (indeed far lower as a CKD shipment) with its innate city-driving advantages, it was also notionally considered as a near perfect car for specific EM consumer types. However, it was judged as not befitting PSA's own very necessary Peugeot EM brand introduction strategy which sought to grow far beyond its Euro-centrism (ie Dongfeng JV and shareholding) which means typically entering markets with a more conventional mainstream market family sedan (see 301 model) and now upscale ranges (see DS).

With a lifetime volume over 6 years of only 125,000 it was not commercially successful, but like other unconventional cars (eg FIAT Multipla and Honda FRV) broadened consumer horizons and appreciation.

[NB 'tall-boy' is an originally English 18^th century term for freestanding tall chest firniture, but became a term promoted by the mid 1990s by the Japanese with their own tall but short, yet high-volumetric city-based kei cars)

FIAT in Brazil:

The Italian company has been present in Brazil with indigenous production since the early 1970s, but it was in 2002 that the company recognised its new EM era strategic needs. Namely to: a) reduce its global platform and local product development costs, b) orientate itself further to its inroads in LatAm, c) mould a new generation of Brazilian and Latin American engineering and design staff and mangers so as to 'off-shore' Italian research, styling and engineering work and d) increasingly infuse local Brazilian and LatAm vehicles with regional performance capabilities and regional character.

To this end it created its Belo Horizonte facility in Minas state, so as to establish a new prime markets orientated development base. Thus far succcessfully contributing to global platform development and more recent production of the “all Brazilian” Nuvo Uno.

However, given its relatively short 12 year lifespan, and a focus upon ably replicating Italian (and perhaps now America via Chrysler) development processes, the centre itself will not as yet be so experimental, and so culturally expert as the Toyota case study would suggests is possible. Especially so, if as expected, it operates as a locally funded cost centre, given the stagnancy of Brazilian vehicle sales in recent years and so effect upon operating income and central budget.

However, given FIAT's need to remain as the region's #1 manufacturer, it will no doubt seek to get yet deeper under the skin of Latin America to promote and perhaps lead cultural relevance.

Rolls-Royce at the 'London Bank':

The 2003 Phantom model – which effectively resuscitated the modern-day prestige of the marque – was largely created from an especially created design studio termed the “London Bank”, since it was based in an ex-bank's offices.

The site supposedly chosen for its high security function, the project's secrecy being necessarily “vault-like”, the project encompassing “bullet-proof''engineering standards (though specified in Munich) and the final product being “like a safe” in its protection and cosseting.

To a lesser extend this initiative has been replayed in Beijing, wherein local customer likes and dislikes have been translated into China-only client cars; and though far removed from RR's typical understatement in colour and trim, is more muted than the very highly 'stylised' custom preferences of various Arab clientèle.

Nissan 'London Roundel' and Beijing Centre -

Seeking to capture from the very source, the sociographic media, fashion and general trends of design-centric London, Nissan opened its design centre (an adjunct to its Bedfordshire engineering centre) in Paddington in 2003.

Its London home, named 'The Roundel' building (itself an old railway shed) itself has overtones of the design icon that is the London Underground logo. This and the American design centre were used as imspiration for the China located studio established in 2011 and expanded in 2013 to likewise capture Beijing's influential sociographic scene.

Renault Sao Poalo, Mumbai and Togliatti:

Production in Brazil started in 1997, but recognising its lag in LatAm markets versus the dominance of FIAT, VW, GM and newer entrants from S.Korea, China and India, the French company established 'Renault Design America Latina' in the heart of Soa Poalo in 2008.

The same year, after a short-lived production JV with Mahindra and Mahindra for Logan, a design centre in Mumbai was opened, initially as an independent operation that could form the concept work phases of its intention to create a development and production JV with local corporation Bajaj Auto.

This was announced as the first dedicated Indian automotive design studio (in the western manner) using 3-D modelling, interior bucks and full-size 'clay' (modelled vehicle exterior). Similarly, with Renault's major equity share in Russia's Avtovaz, and ambitions to remain the country's preferred home-market brand, efforts to create a design base at the large Togliatti plant have been underway.

Given their relatively recent births, it seems that all studios and development processes will be operationally grown in a phased systematic way to eventually provide true like for like matches vis a vis the central Paris design HQ.

Conclusion -

The 20^th century was largely a period in which those countries labelled either 'post-colonial' or 'developing', typically operating with a majority of state controlled industries and commerce, had to be satisfied by the provisioned vehicles imported from the major powers, be they European, Russian or American.

For the much of the century the comparatively rudimentary conditions of the then remote areas meant that simple early era vehicle solutions, capable of basic, capable and reliable performance sufficed. But into the 1960s and beyond, their economic booms – though often short lives - promoted nationalistic modernisation, often witnessing a manic effort across state and private spending to quickly catch-up with the general infrastructure and living standards of the advanced countries. The quintessential city of Brazilia demonstrated that when the opportunity arose it was taken, even if in its case somewhat over-idealistically: as the far inland, overtly car-centric bureaucratic metropolis with a areal layout based upon the silhouette of the aeroplane.

Even so, such advances were compelling not just to the respective populations and governments, but also to the multi-national and start-up vehicle firms who sought to stake their place in the economic evolution.

As time passed so the in-market complexities of such countries grew, and as seen by those case studies which exemplified poor strategic understanding, those which were unable to understand the often obvious real-world needs and expectations balanced against the often over-hyped national and consumer readiness for change and tomorrow's 'advanced markets' technologies.

Those auto-makers which continued to re-wrap old technology under new skin typically served the need for apparent modernisation but with the certainty of necessary reliability. But obviously as infrastructures much improved from the mid 1980s onward across China, SE Asia, S. America and portions of Africa so an opportunity grew to at last properly attain the industrial ideal of global platforms and so vehicles.

But with the recognition that a certain degree of 'glocal' engineering would need to be undertaken to gain necessary cost savings so as to reduce showroom prices, provide dedicated (typically dual role) EM variants and to ensure necessary ride and handling performance. This important to not only provide for tarmac versus dirt-road conditions, but critically to cope with the neglected and deteriorated conditions of even relatively new tarmac roads of urban areas. The result of often under-engineered road-paving resulting from local contract profiteering; plus the fact that the boom and bust economies would inevitably see a diminishing of infrastructure maintenance.

As EM prosperity finally took long-lived hold from the mid 1990s onward – resulting from the upward swing and long haul of the commodities cycle and through economic policy reforms per industries and peoples – so at long last EM regions were able to engender more stable national economic agendas, invest in a new cycle of infrastructure development and I doing so provide their consumers with the finances, confidence and expectations previously only seen in Western, Japanese and latterly S.Korean populations.

This then has hopefully crystallised the notion that those politicians, industrialists and consumers who exist further down the EM scale, far beyond the MINT and CIVETS regions, have a no interest in being viewed by the outside world as 'specialist developing world' cases along with dedicated low-cost, self-build (and invariably under-capable) odd vehicles. For all the humanitarianism such a project might convey [as seen] such entrepreneurs may well promote seemingly ideal tailored vehicles with apparent credibility, but their own passion might also be far greater than their own business acumen, and at worst can be projects which through launch and start-up actually better serve vested interests.

Extinguishing such notions is the fact that today a far more trade-interactive, digitally enabled and truly globalised world has moved on, and with it negation of second-best goods, even if they necessarily contain culturally orientated ingredients.

As seen with FIAT engineering capabilities expansion in Brazil (and indeed Volksawagen's long previous patronage of the country) and Renault in India, the last decade has witnessed major auto-makers moving beyond the single dimension of glocal production, building their own cross-functional capabilities in prime markets from early phase concept work to dealer-delivery with incressingly responsibility for training an enlarging new workforce; one which is being formed to properly replicate their homeland capabilities, in order to serve primary, secondary and tertiary expanding EM markets.

To do so “the shoe has been put on the other foot”, with western players now in the role that Japan occupied during the 1960s (for mainstream) and again in the 1980s (for luxury). It is the Westerners who must now recognise that their innate foreigness must not be viewed as a challenge, but as an opportunity to truly de-construct the obvious and less obvious cultural characteristics of many new markets.

As witnessed, during initial phases of consumption growth in the BRICS, newly arrived (lower) middle-class purchasers will be enthralled with their ability to choose what to them are new and aspirational goods of typically better quality given higher price and historical research input.

Yet albeit slowly, as the once novel becomes the norm for increasing numbers, those trend-setting EM buyers will no longer wish to perpetuate the foreign induced norm. Instead, even though global brands do indeed create cross-cultural 'global tribes' (as seen with apple's iphone and luxury goods), such leading -light influential consumers will as part of their new national and personal confidence,lseek to better reflect and re-affirm themselves entwined within their cultural identit es, so setting-off new directions and threads for product and services development and opportunity.

Instead of reacting to such inevitable social reaction in due course, the global automakers of today have hopefully recognised the need to leverage both their innate foreigness, so as to question national and regional cultural traits, yet also deploy their increasing local market knowledge, through what will hopefully be a new era of holistic perspectives; including the melding of Marketing, Engineering and Design mindsets so as to become much more than simply EM 'au fait'; instead far more 'tête-à-tête'.  

All serious investor types - from large pensions and insurance institutionals to VEBA-like interests - will surely be those who view their interests as not just financial instruments but as fundamental ownership of the auto-business, should demand so.

Auto Industry Practice – EM Business Models – Multi-Cultural Learning (Part 1)

The crux of the previous four part web-log highlighted the contextual importance of today's multi-cultural mosaic, and sought to demonstrate how corporate initiatives must be increasingly fine-tuned to befit the “glocal” (consumer needs, wants and desires) within the ever more digitally enhanced, reality augmented and so hyper-real 'global village'.

It also illustrated the post-modern tendency for self-reference, an essential element of an ever deepening realm of semiotics within physical, virtual screen-based and today merged 'augmented reality' worlds.

Seemingly operating as part of the required cost containment strategy, this especially pertinent during this period of economic growth constraint, a rational which spans various enterprises: from the duplication of specific shopping mall layouts and structures to the re-deployment of digitally produced characters across successive animated films.

EM Influences -

Direct replication of products through imports and localised manufacture (thereafter adding associated consumer services) has been the modus operandi of the major automotive players over the decades; as new growth markets have willingly absorbed 'predestined vehicles' with modest modification.

Today however, a trend has begun by which EM customers seek-out the psychological reassurance of the 'quality guarantee' given by internationally renowned brands, but likewise increasingly desire more culturally attuned ingredients and formulae.

Indeed, auto-makers' own recognition that certain EM countries and regions are now as fundamentally important to corporate revenue and profits as AM countries have been, means that EM market sensitivity has increased many-fold.

This illustrated by the very fact that various German vehicle marques have already been seen to utilise styling traits with more Asiatic appeal and experimentation into their once far more conventional brand-formula restricted products.

Whilst the credit expansion excesses of the previous hyper-growth Chinese consumer society for a while underpinned its indigenous new vehicle brands. However, the fact that most such homeland vehicles were based upon old engineering platforms and low profit margins to try and capture market share, meant that when the economy slowed the vehicle market consisted of those credit-worthy, mainstream (private, company and fleet) vehicle buyers who continued to seek-out better quality vehicles with sound financial rationale (eg residual values, contract types etc). Vehicles offered by the major Sino-Western joint venture companies.

Yet, as the more deliberately exuberant (often Euro+) styling of smaller Chinese domestics flailed under intense competition, so the large corporates injected subtle indigenous cultural cues into their products to provide a flair of local flavour.

The seemingly globally generic vehicle, once engineered for unaltered reproduction, has itself becoming slowly 'glocalised'.

Route A: “Conventional Glocalisation” -

The multi-national desire for increased 'glocalisation' to date has naturally stems from the dual advantages gained from globalised economies of scale (in primary systems components) and a local affinity underlying local product appeal in aesthetics and over-all user experience (eg vehicle performance and associated technological content).

This then replays the developing markets scenario as seen in previous eras, but obviously now with greater in-market sensitivity. Importantly, the move from EM markets' previous acceptance of effectively 'de-contented' vehicles (to reach yesteryear affordable price points) toward today's elevated buyer expectations nigh on par with western product content standards (less regulatory in-car requirements)

As seen, the ability to to do so created by localised lower-cost manufacturing hubs within EM countries, consisting of major VMs, their western counterpart Tier 1 suppliers, and the raising of standards amongst local Tier 2 suppliers to meet quality demands.

This may be termed 'Route A' and called “Conventional Glocalisation” since it relies upon the respective business model pillars of: aligned local supply chain, scale economies of global production and local marketing capability.

But as seen, this now very engrained approach has had critical portions of its business template heavily eroded.

The previous yesteryear rational becomes gradually altered by the substantial success of prime EM nations, via both investment and production based 'supply push' and private earnings and credit fuelled 'demand pull'. Today at the point where the once innate difference in AM vs prime EM cost structures have shrunk substantially.

So whilst creating a more economically balanced world and also providing for western 're-shoring' opportunities, to replay 'conventional glocalisation' requires the availability of what have now been termed “lower order EMs” and “pioneer economies”; themselves expected to reach a tipping point from historical economic stagnation toward growth thanks to capital market friendly policy reforms and so inward foreign investment.

However, whilst the BRIC and CIVETS nations do indeed have further 're-play' opportunities from their own untapped regions, it appears likely that the remaining smaller EM nations across S. America, Africa, the CIS and fringe Asia arguably offer less productive capacity than than the astonishing levels seen by the prime EMs during the early 1990s to 2008.

This then means that new perspectives regards the business models behind global and glocal production and consumption will be required.

One possibility is what investment-auto-motives terms “Progressive Glocalisation”.

Route B: “Progressive 'Glocalisation” -

(New Thinking, Toward New Horizons)

This (admittedly purely conjectural and somewhat far fetched idea) posits the notion that a type of visually based 'Lingua Franca' might be created by multi-national corporations - individually or in harmony - acting in a progressive “social totem” guise, to attract an increasingly digitally immersed, visually cognitive global consumer.

This possibly achieved through applying an ever widening palette of signs and symbols drawn from the world's own spectrum of multi-culturalism.

Such visual short-hand equivalent perhaps to basic Esperanto in its ambitions, but ostensibly without the communicative depth gained from the ongoing world-wide adoption of English. Instead with more significant and indeed signifying immediacy. Though if successful it could ultimately lead to a new era of complex hieroglyphs – a suite of visual elements underpinning a cognitive association behind an icon based global language.

This progress part of a new era of 'glocalisation' with expanded multi-cultural and cross-cultural interaction propelled by the strengthening worldwide commercial application of 'cultural streaming'; which in a 'global village' would gain an increasingly important role across corporate value creation and so successful global capitalism.

Increasing Cultural Complexity -

Though we seemingly live upon a cyber-unified planet the fact is that a myriad of expanding cultural identities exist. Beyond the given basics of ethnic background, religion and nationality, lay trends toward geographic localism (eg West Ukraine and Crimea), the influence of any associated revived languages, and perhaps more crucially the web's own promotion of distinct on-line communities becoming seen as virtual tribes., The seemingly smaller 'global village' then has become arguably yet more complex.

And whilst major nations have absorbed ever more divergent immigrant peoples to sustain their own economic basis, the progeny of such people with dual (or more) cultural perspectives and identities, plus those attributes of the seemingly self-created personal identity - though often drawn from a manufactured popular culture itself - adds to the fragmentation of, and so blurs, society's 'cultural mosaic'.

Invariably with such numerous influences the very idea of any singular cultural affiliation and so singular identity has become problematic, if not actually defunct, with beyond immediate birth nationality, and family ancestry, the addition of many tertiary cultural layers.

A cross-pollination of peoples, cultures, behaviour and perspectives has of course been with humanity since its earliest days, with as seen time after time, the adoption and adaption of specific cultural norms and phenomenon may occur to enable any one group's own culture-melding agenda.

At a personal and close group level there may prevail via local first name adoption with surname adaption by those groups seeking new societal acceptance, yet held 'within' and very separate from usual social interaction, may be secretive 'nourishment' of a core identity within their own community to maintain their over-riding core-community loyalty, far beyond any other association. Specific supposedly marginalised religious groups with constant tribal ratification obviously the most fervent and so invariably socially separatist.

At the societal level common cultures are changed by altering norms.

Most obviously is the effect of immigration as what seem stable, traditional cultures absorb new economic participants which bring their own ways and crucially differences This typically exacerbated by the fact that immigrants tend to be younger people with often their own youthful tendencies coupled with the drive of personal ambition for economic success. Thus invariably creating tensions with the previously comfortable and often over-complacent indigenous population.

In the West – and to the dismay of many EM nations – has been the rise of gay rights. Here in the UK after years of activism and calls for gay absorption into the norm, the very recent watershed event of homosexual and lesbian civil marriage was made law in the UK. This event undoubtedly resulting the now long sustained, highly influential efforts of the mass-media, whereby 'new norms' are televised as conventional and thus slowly absorbed by much of the public long before they are seemingly ratified by the establishment.

Culture Forming -

But such new 'culture-forming' itself poses issues.

Again here in Britain here are no doubt many within the religious and non-religious realms of the 'silent majority' who believe that the once well intended thrust of 1960s political correctness has extended far beyond its original intent of fairness to all colours, creeds and inclinations. With today the effective eradicated - through media 'demonisation' - those opposing promoted viewpoints, whether that be upon immigration, homosexuality etc. So the advent of what may be termed 'illiberal libertarianism', or paradoxically 'facist liberalism', where a climate of true, necessarily mature, free-speech is diminished or possibly labelled 'hate speech'.

These are but a few social dynamics with major cultural bearing that have evolved within micro and macro spheres.

And yet further, as noted by some insightful social commentators in the West, just as society fragments into ever more specialist interest groups, and so sub-identities, so such consequentially small, marginalised entities, promote their own interests by seeing and portraying themselves as what may be termed 'societal victims', with such resonating language deployed. Thus apparent sufferers instead become 'survivors' which in turn more closely knits together the emotions of the specific group.

Exactly how such an identity-fragmented and seemingly lobbyist, self-interested society can be understood en mass by the individual, the public at large, governmental policy-makers and corporate enterprise is the pertinent question of today.

The ongoing tribal shattering of once distinct mega-tribes such as countries such the USA, Canada, UK, Germany, France, Italy, Denmark etc, invariably indicates that more complex, newer tribal identities and links are being grown by the enabling function of cyber-space

So it seems that these more newly evolved multi-layered 'complex identities' are being formed and promoted, the nigh on singular identities of old which is today's convention – most prominently that of nationality – is being subtly eroded.

This is the concern that various EM countries apparently hold, the core worry regards the possible diminishing of their national and religious identities perpetuated by America's corporate hold over the internet and its future.

Common Commercial Links -

Thus for all societies and so the world at large, the workings of internal and external forces continue to reshape the very essence of 'culture'.

None more so than the direct and indirect influences of commercially orientated mass-consumerism; which over the preceding 150 years or so of so has become the for want of a better phrase been seen as “the new church” or “new religion” by social commentators.

Whilst lambasted, it acts as perhaps the only unifying “global religion”, where what are otherwise often distinctly different social groups, and possibly very different mindsets, meet.

At the most basic level, there may be the unrecognised meeting of minds between 'poor' and 'rich' individuals who share similar responsibilities. Such as the African township mother who is able to feed her child, though only once a week, on the same branded high-nutrition baby-powder which her counterpart American suburban mother feeds her child three times a day. (Yes this is an overtly stereotypical picture, but still an unfortunate truth within our re-balancing world).

And in a very different realm, the ironic but mutually well recognised meeting of minds between two culturally very different persons who happen to share the same lifestyle. The up-scale shopping areas of most major city centres are typically inhabited by seemingly very culturally different but nonetheless similarly attuned wealthy people who share similar fashion and lifestyle interests. Herein, London's Sloane Street juxtaposes the ironic schism of inbound British weekend tourists with resident foreign Arabs and Chinese; and whereby the scantily dressed young Cheshire 'WAG' may covet the designer handbag of an older Saudi Arabian lady wrapped in full-cover dress. (Or indeed vice versa). For a time the social difference is diminished by the commercially generated shared interest.

The Car as Multi-Cultural Icon -

Similarly, a previous web-log looked at the broadly socially positive, but unfortunately neighbourhood negative, affects of what has informally become the spring/summer (arguably very cross-cultural) event that is the 'Arab Supercar Invasion'.

This effectively promoted by the younger sons of wealthy Middle-Eastern families who travel primarily to London and Paris for their more liberated summer vacations.

[NB Such individuals and families form a significant element of the British-Arabic diplomatic entente-cordial, which itself underpins the 'recycling' of the “Petro/Gas-Pound” into the services based sub-economy of SW3 and broader central London]

Though the arrival of the noisy cars invariably creates local tensions amongst residents (who do have good reason to complain) it is also undoubted that the free to view supercar show has undoubtedly become a significant part of the tourism draw. Even if not on the official sightseeing tour for visiting foreigners, it undoubtedly adds spectacle, and for many British tourist families added great excitement during their London visit. The visual and aural thrills of Bugattis, Lamborghinis, Ferrari's, Maseratis, Bentleys, Rolls-Royces, Aston Martins, Mercedes-AMGs, Porsches, McLarens and more - for good or ill – is as memorable (if not more so) than much of what is seen within the walls of near-by museums and galleries.

The cars viewed by the thronging crowds as modern mechanical marvels, as magnificent motorised masterpieces; and although there will invariably be unpleasant jibes about “the rich Arabs” by some gawpers, for a time the mutually shared interest in such vehicles eradicates the apparent gulf of supposed cultural differences between Anglos and Arabs

The high arts within the 'new religion' that is consumerism actually draws separate peoples closer together.

Back to the EM Populist Dream -

Although such marques and models represent the pinnacle of automotive engineering in a very specific social context of great wealth, and does promote the positivity of melded cultures, the global reality is very, very different.

Fact is, for millions of people living in 'the real world' within BRIC, CIVETS and lower league 'pioneer' countries, their dreams and aspiration centre around not around the perceived ridiculousness of hyper-cars or super-cars, but eventual ownership of four wheels which provides for family and commercial needs, functional safety and comfort, all within what to AM countries is considered a mundane vehicle, but life altering nonetheless.

Obviously as such economies continue to grow, weathering the slowed phases such as today, this offers an immense opportunity for those auto-makers that can create the right vehicles. As was the yesteryear remit of the Model T, Beetle etc, followed by the GOL. Today a primary strategic initiative for most auto-manufacturers: from TATA's seemingly the visionary Nano, to the many other domestic and foreign VMs which seek to (unlike Nano) typically incorporate their EM entry level vehicles into either their respective indigenous or global business models.

But identifying exactly the right fundamental DNA for the archetype 'glocal' vehicle' is a complex and hard task, made all the harder by the ever increasing PESTEL complexities inside EM and AM societies, as well as those that both conjoin and separate them.

To Follow -

Thus far this weblog has simplistically commentated upon: the increasingly powerful influence of EM countries upon multi-national companies, the basic corporate mentality toward creating a successful 'glocal' business model, the manner by which global economic re-balancing has and will further impact upon such conventional business wisdom (Route A), the need to re-think the very philosophy that is 'glocalisation' to create new multi-faceted merged opportunities (Route B), this set within the challenge/opportunity of increased cultural complexity as 'layered' personal identities emerge, the mention of just a few of the many social trends which re-make societies, the manner in which consumerism actually acts as far more of a social glue than has perhaps been recognised, highlighted by one specific and organically emerged social phenomenon, and how even that 'pinnacle' is but a drop in the ocean of consumer aspiration across the EM world.

In order to better understand how auto-makers might best approach the subject that is 'glocalism', the following Part 2 seeks to simplistically review the way in which auto-sector business and product strategy must evolve if it is to meet the 'glocalisation' challenge; as understood today and into tomorrow.

Providing insight into:

- Early era efforts of auto-globalisation

- Case studies of ill-contrived 'glocal' business plans

- The rigour of Japan's “deep knowledge” approach

- Examples of well-contrived new product development