Volume 144: A Little Less Grey.

A Little Less Grey.

tl;dr: FIAT hides EV inferiority behind brilliant new branding campaign

I own a grey car. There, I’ve said it.

I don’t love that it’s grey, I don’t hate that it’s grey. It is, however, infinitely better to be grey than white. However, grey isn’t the color of emotion; it’s the color of compromise. 

Unfortunately, our previous car lived up to its name (Found On Road, Dead), which meant we were limited to taking whatever was on the lot (no luxury of being able to wait six months for us). We chose grey because my wife is pathologically opposed to owning a colorful car, believing that it’s “more likely the cops will stop you,” as if being grey magically renders a massive SUV invisible to the cops.

Anyway, I mention this because talking heads are, quite rightly, losing their minds over a new campaign from FIAT that centers on the idea that FIAT only sells color, not boring old grey. And I can see why they love it so. This post on LinkedIn doing a much better job than I of explaining why it represents such good branding.

Now, while it would be very tempting to ask the simple question of how car ads became so lazy that this single one stands out the way it does, I’ll refrain. 

Instead, I’d love to talk about the market conditions into which this ad is being placed and hence the specific importance to FIAT.

First, the car industry faces an imminent reckoning. For decades, it overproduced vehicles necessitating deep discounting, interest-free financing, and sweetheart lease deals to keep iron shifting from the dealer lots. Most of this was in the interest of volume and market share rather than profitability, which the industry has been historically poor at.

Then two things happened, electrification and Covid. Let’s take each in turn:

First, bizarrely, electrification appears to have caught many in the automotive industry napping, specifically FIAT owner Stellantis, which is way behind the eight-ball EV-wise. (I’ll come back to this later)

To fund the shift from cars that run on dinosaur juice to those that run on electrons, the focus on market share has been tempered by a new emphasis on profitability. Ford being a notable example: it massively slimmed its portfolio of gas vehicles and cost-engineered the crap out of what was left. (If you’re wondering why a Ford cabin feels so cheap and has such a poor new car reliability record, saving pennies to pay for the shift to EVs is why). 

Then Covid came along and put the kibosh on supply (first from locked down factories, then supply chain snafus, most notably, chips) at the same time that stimulus fueled consumers increased demand. This led to car companies doing two things. First, they maximized profits by only releasing fully optioned vehicles at top-end prices to their dealers. Second, they tried to reduce inventory costs by shifting people from the habit of buying a discounted vehicle from dealer inventory toward paying full price, sight unseen, and then waiting several weeks or months for it to arrive.

However, all good things must come to an end. Supply chains have largely come back to normal. New car inventory is spiking. High-interest rates are crimping demand. And, it’s very unclear whether people will continue to order and wait when dealer lots are full and discounting is back.

This means that while dealers could get away with charging over list for even modest family vehicles in the last couple of years, now they cannot. 

As a result, automotive companies find themselves in an increasingly tight bind. Expensive, fully optioned vehicles are piling up on lots. They need to shift this inventory, but they don’t want to go too heavy on the sales promotions because they need profits to help fund the shift to EVs and because Wall St. has become newly enamored of the idea of automotive profitability. And while a singular bright spot is that demand for EVs and fuel-efficient hybrids remain extremely robust, certain brands have been way behind in the development of such vehicles…namely, Stellantis, owner of FIAT, which the US EPA has labeled as having the worst fuel efficiency of any major automotive group, dependent as it is on some pretty ancient engine designs.

So, what do you do if you’re way behind on the technology that’s driving demand, find your brand (almost certainly) losing relevance as a result, yet don’t want to discount the crap out of your inventory because it would mean entering a downward price spiral that would trash your brand and severely crimp your ability to fund the shift to electrons that you’re already behind in?

Why you focus on color. Of course.

It’s a brilliant example of what I label “playing baseball while everyone else plays football.” (Insert sports of choice wherever you may be). What I mean by this is that instead of attempting to play someone else’s game that you’re not best suited to play, try and change the nature of the game instead.

In this case, if you don’t have decent EV tech to offer, then attempt to change the basis of consumer choice: Celebrating Italian-ness, bringing color to people’s lives, and proving it out by promising never to sell you a grey car. 

Brilliant.

And it’ll almost certainly work because instead of trying to duke it out on the marginal functional gains of a little more range here or a little higher gas mileage there, FIAT is going straight to the emotional cortex of the car buyer. 

This campaign isn’t asking if you want a grey car or a colorful one. It’s asking whether you desire a life with a little more non so che in it. And, within a desperately serious industry that’s spent years preening about being globally from nowhere, and where color options have become limited to white, black, and fifteen shades of grey. Well, I get where they’re going. 

So, yeah. This is a great campaign. Not just because it’s a great ad built atop an obvious-in-hindsight category insight (and obvious is not intended negatively here because it’s only obvious now somebody has done something with it) but because of the particular circumstances FIAT finds itself in where such a campaign has the potential to solve a genuine business problem.

It’ll be interesting to see how it does. I suspect it’ll make a meaningful difference in maintaining and possibly elevating market share while reducing promotional price pressure. And, if it’s successful and they stick with it (by no means guaranteed with a car company) and extend the idea further, it’ll likely do plenty to help once Stellantis does have the EV tech to compete.

Because, for once, we now have a car brand taking a position on something rather than blathering on and on about absolutely f’ing nothing.

Over to you, well, every other car company.