I can list at least eight luxury car brands that have long aspired to topple the Big Three from Germany, Audi, BMW and Mercedes-Benz.
Try as they have, and despite rich histories, Alfa Romeo, Cadillac, Lincoln and Jaguar Land Rover have not yet put even a tiny dent in the German armour. And Infiniti, Lexus, Acura and now Hyundai’s Genesis are Asian luxury upstarts that remain also-rans compared to the Germans.
Now of those eight, I’m betting that one of will separate itself from the pack: JLR. Why? Let’s start with a little history.
In the late 1950s, BMW AG was on the brink of bankruptcy, with Daimler-Benz poised to scoop up its Bavarian rival until the Quandt family stepped in. BMW has remained independent and family-controlled to this day.
BMW spent the 1960s as a small, aimless automotive company producing a hodgepodge — from the tiny one-door Isetta runabout to the V8 507 sports car. This confusion was a prescription for failure for a company with annual sales of 140,000.
Even a nearly-blind Herbert Quandt could see this when he turned over the CEO reigns in 1970 to a relatively obscure Prussian engineer named Eberhard von Kuenheim. Armed with ambition, discipline and vision, von Kuenheim led the creation of a new BMW. That company would simply be “the best.”
BMW lacked the resources to become a big volume automotive player, so von Kuenheim’s team committed to premium cars that would dominate niches by investing richly in engineering, manufacturing and supplier relations.
The goal was to have the best technical content, the best chassis, engine and handling. BMW’s plants would become famous for efficiency and flexibility. By 1972, von Kuenheim had wooed a young sales and marketing whiz named Bob Lutz to re-fashion the sales organization, too. By the late-1970s, BMW had established itself as uniquely premium automaker.
This brings us to today.
Von Kuenheim, in various interviews over the years, has laid out the exact strategy the eight aspiring luxury brands should follow if they hope to mount a challenge to the Germans. It starts with the teamwork of a dynamic group who make quick decisions about how to fashion excellent, ground-breaking products and services.
“Strategic decisions are never one man’s decision,” he told Automotive News Europe. “There is a chain of decisions, and the strategy is the sum of them. The important thing is to get up and act a bit earlier than others.”
Perhaps most important of all, this strategy demanded that BMW think and act bigger than itself – to think globally.
“We were very provincial,” von Kuenheim told Automotive News. “Not a European company, not even a German company. It was a Bavarian company.”
So here is the template for how any one or all of the eight wannabe-big luxury brands goes forward:
- take decisions quickly
- act boldly;
- bring in young, dynamic and fearless talent;
- act independently;
- pioneer and dominate niche segments, loading up with the best technology.
That formula, followed over a multi-year commitment, backed by a strong board, will deliver great products, built in efficient, flexible plants, delivered through a world-best sales organization.
Of the Gang of Eight, JLR has the best chance of doing truly startling things. Jaguar Land Rover may be owned by Tata, but the Indian parent has used a guiding hand to write cheques when needed. Jag, underpinned by its excellent plants and the ability to act independently of Tata thanks to its modest size, is steadily moving into new segments with bold designs and fantastic technologies.
The rest? Well, Alfa Romeo is owned by Fiat Chrysler, which lacks the resources to set Alfa free. FCA needs Alfa to be a profitable success, and soon.
Then we have Cadillac and Lincoln. Both are owned by Detroit-based parents who seem incapable of leaving either one alone, completely free to be great or a disaster. Cadillac is the more independent of the two and might yet surprise us. But the new Lincoln Continental rides on a longer, wider, taller version of a CD4 platform shared with the Ford Fusion. Enough said.
Infiniti? Too many broken promises. Lexus is interesting in that Toyota is very rich and committed, but Toyota’s shadow complicates matters. Acura continues to make up-market Hondas and Hyundai’s Genesis is unformed and quite obviously a work in progress, designed to distance Genesis as far from Hyundai as possible.
If I were a betting man, I’d put my money on JLR, whose top leadership, by the way, is German.