Cars that still sell, despite the fear and loathing: Hyundai, Kia, Subaru...Jeep? #cars #marketing

I can't verify this statement for accuracy, but here it is, from Forbes mag: A handful of car models, such as the Jeep Wrangler and the Smart, are maintaining their sales despite the general auto collapse. But the only full-sized companies that are holding their own are Korea's Hyundai and Kia, and Subaru. I think he's looking at the US market, but let's look more widely at why these brands are successful.

First up, the Smart makes sense in these difficult times, although I do wonder which model is holding up best. I suspect it's the tiny, cultish FourTwo. It's both an economical, sensible city car and a niche hit. Just search YouTube for the whacky variations and mods you'll find for that diminutive sub-compact. Because it's a bit - or a lot - different, it stands out in the market - whilst garnering some respect via owner Daimler. And it doesn't hurt that it has green cred attached to it, either. If you drive one of these cars you are definitely making a statement, like it or not. Although it's had a rocky road at times, it's now doing exactly what the brand was created to do. It could be a car for the times.

Of course the Jeep Wrangler is another cult hit in a niche market, albeit a very different one to the Smart. Indeed it's almost exactly the opposite in every aspect, with street cred based on roots going back 65 years or so to the original general purpose vehicle. It thus couples a spared-back historical military style (think 'MASH') with a go-anywhere, thumb-your-nose-at-climate-change sort of "freedom" feel. Again, it makes a clear statement about you and your beliefs, or so we may think. Whilst it may not be the most economical car in the world it has a style and a practicality about it that has led to a self-perpetuating following.

On the other hand Hyundai and (Hyundai-owned) Kia are upstart Korean mass producers of a range of increasingly well-built but clone-like cars with little innovation in style, packaging or performance. Like the Smart brand they were created as a product line, rather than evolving out of the bicycle or horse-driven coachbuilding industries, car racing or from post-world-war reconstruction like many 'traditional' European (and Japanese) brands. As such, being late to the party as it were, they have leveraged the manufacturing lessons (and technical input) of companies like Ford and Mitsubishi and designers like Giugiaro to create a line of carefully targeted, inoffensively-styled lower-cost cars. They have also got a sizable local market to fall back on (something the Aussie car makers can only dream of). Whilst they lack the street cred of more traditional brands, their lower unit cost of production has meant that they can sell harder to gain market share, at times burdening each individual vehicle sale with thousands of dollars worth of advertising. To the company's credit they have continually reinvested in quality, style and dynamics, largely closing the gap on the class leaders whilst maintaining their cost advantage. So they have achieved market visibility, acceptance and a lower price point against their competitors. No wonder they are holding their own - surely they are now 'stealing' market share from Toyota, GM and the like.

Which brings me to Subaru, famously the 'ugly duckling' of Japan's auto industry. Subaru does have a legacy (US-market pun intended!) to draw upon, having evolved out of Fuji Heavy Industry's history of aircraft and motor scooter production. In many ways the company has paralleled the traditional car makers with their deep technological and evolutionary roots whilst keeping themselves firmly rooted in the "but strangely different" category. They have also indulged in some 'cred-creation' via motor sports, especially rallying. However their main claim to differentiation has been their strangely awkward approach to exterior car design and their dogged determination to hang on to horizontally-opposed 'boxer' style engines. Coupled with the more recent leveraging of their rallying heritage via a marketing-lead commitment to all-wheel-drive, Subaru has ended up making a name for themselves across a range of seemingly opposing niches. For example their WRX model achieved notoriety both as a world-class rally winner and the car of choice for Australian bank robbers; whilst their Outback model leveraged quirky styling, solid reliability and a bit of Aussie bushbashing charm. (Australia being both a key test market and the source of Paul Hogan, an advertising hit for Subaru in the US.) And as the Forbes article states, it helps sales in snowy or slippery climes if you offer traction built-in. In all, a strange brew.

There is a common theme to all of these brands. Firstly, none are the market leaders, although each may have a model in the top 3 in a segment, somewhere - so they are the underdogs in a way. (People like underdogs, generally, as long as they deliver.) Secondly, they successfully occupy - perhaps dominate - one or more sizable niches. But can they maintain these positions during challenging times? Indeed it will be interesting to see how the car market evolves over the coming months and years, given the spectacular changes afoot. This is a time of financial drama coupled with a game-changing conversion to alternative fuels. Whilst we may get another 50 years out of petrol, we will see increasing opportunities for new players to come in and undermine both the current oil-based fuel refiners and the current vehicle manufacturers. Hybrids and electric cars are just the start. Deep pockets will be needed to fund this shift.

Likely as not we will see struggling companies like Ford, Chrysler and GM partly consumed by - or partnered with - competitors like FIAT, Toyota and VW. And we will doubtless see the rise of Indian and Chinese manufacturers, playing a similar game as the Korean makers have done, leveraging huge local markets first before staking global claims. Whilst the big fish like VW and Toyota will probably maintain their overall positions, the niche players will be joined by companies on the way down, looking to hang on - somewhere, anywhere - and newcomers on the way up. Will trendy quirkiness be enough for Subaru and Smart? Will the up-to-now agile and lower-cost Korean makers cement their current Top 5 position and move up, or will upstarts like India's Tata consume the ground underneath their metaphorical feet?