Marchionne is on the move once more. The car industry’s favourite restless iconoclast and deal-maker, the boss of Fiat Chrysler, Sergio Marchionne, is shouting from the Detroit rooftops that any fool can see General Motors should agree to merge with his Italo/US outfit.
Marchionne is a very serious player. One of the most effective bosses in the global car industry. He played a blinder acquiring Chrysler in the first place and can now persuade sensible people to spend £18,000 on one of his Cinquecentos. Nobody dared dream he might give Luca Di Montezemolo - the boss of Ferrari and Italian royalty down to his Gucci loafers - the boot in such unceremonious fashion. And there are rumours that a Ferrari SUV may be on the way, a thought to make purists shudder but which could produce a lot of nice margin, Range Rover and Porsche Cayenne cash.
But all is not rosy in the car garden. I met a senior UK executive from a global car giant last week. He was fairly chipper as sales are currently breaking all rules. But he’s very concerned about engagement levels with cars generally, especially among the young. Car makers are finding it harder and harder to work out how to get through to potential buyers via their marketing. (Where have we heard that before?)
The outcry from middle aged blokes from Clacton over Clarkson’s Top Gear defenestration notwithstanding, kids are just not left dewy-eyed by four wheels and an internal combustion engine in the way they were in the old days. Neither do complex electrical hybrids float their boats.
Metropolitan high-achievers these days prefer Uber to car-ownership (or if they do drive they use clubs like ZipCar). Cars do not drag them away from vodka binges, PS4s and Tinder, and the cash that once would have been earmarked for four wheels is now required for the croesan expense of getting inside four walls. (Top Gear, by the way, amused many who have no interest in cars whatsoever. And whether it will continue to do so minus the Unholy Trinity is open to question.)
These shifting attitudes are well understood by some car makers - BMW’s Ian Robertson told MT his views on the matter last year - but not all. General Motors had a shocking global financial crisis. Its products are worthy but largely unexciting. How many 14 year old boys - or girls - do you know who lie awake in their beds at night day dreaming about Vauxhall Vectras? Or Corsas? These days I’m interested in cars in a cerebral rather than an emotional way. But when I was doing O levels I can recall being hugely impressed by the Triumph TR7 and even the Rover 3500 - both total dogs, as it turned out - whereas our family’s Ford Escort estate was a source of mild embarrassment. The young don’t seem to feel cars in the way they used to. They are largely indifferent.
It could be that the West Coast disruptors - Apple, Google, Tesla - will seriously shake up an industry that has been short of ideas and pizzazz in recent years (although MT's resident contrarian Alastair Dryburgh might disagree) Jobs knew - and Ive still does - how to make folk really really desire one of their objects. I can see how an Apple car might get more than a few tragic fanboys interested in test drives again. Although being from Cupertino it’s unlikely to cost less than £90k, will require new software every 18 months when it refuses to boot up and its battery will have run flat by mid afternoon.
The car should be the ultimate consumer product as our contributing editor Stephen Bayley argued recently. In terms of outright cost it still is, although trophy Riverside flats in London bought by Russians and Chinese are running it close. And they don’t lose 30% of their value as soon as they drive off the forecourt.
In the meantime many company drivers choose their vehicle via spreadsheet, as mandated by the fleet manager - comparing monthly leasing costs with an eye on CO2 emissions per kilometre travelled rather than whether owning a particular machine might make their heart sing. So if a Marchionne-led Fiat/GM merger can re-ignite those young buyer's yearning for four wheels, it should get the green-light from all concerned.