Does Carsharing Threaten the Centrality of Design?

With Apple products leading the popular vanguard, the centrality of design has become a common theme in contemporary product development. As it says on the back of my Apple Nano, "Designed by Apple in California. Assembled in China." Let there be no

mistake—the added value (and presumably the reason that I paid more for the product than for a competing MP3 player) is in the design of the product. And let there further be no mistake—the design is that of Apple, in the heart of design heaven, namely California. As for "assembly" (what happened to "manufacture"?), that takes place anonymously (Foxconn?) somewhere in China. When it comes to the Apple Nano product (and presumably other Apple products), it is the design that makes the difference.

After all, didn't Apple's success last August in its California-based litigation against Samsung rest mainly on a finding of infringement of several of its design patents (even if the award of damages was later cut back by the court)? Further, didn't the European Union recognize a protectable right in an unregistered design, emphasizing the importance and prevalence of valuable product design in the modern world? Utility patents, with their steep costs and long and complex procedures for registration, might not be the regal pinnacle of IP rights, but the need for good product design (and presumably legal protection) is seemingly everywhere.

The importance of design did not begin with Apple or the consumer electronics industry. Generations before that, the automobile industry had turned design into the calling card of their products. Design, when intertwined with car performance, became the nexus between the brand and the customer. What better proof of the importance of design than the anti-design aura of the Volkswagen. At the end of the day, for the Volkswagen Beetle as for the General Motors's Cadillac, vehicle, the consumer was believed to put design (or anti-design) at the heart of his purchase decision. It was only when the U.S. auto industry decoupled design from acceptable vehicle performance that it began to lose the race with its German, Japanese and later Korean competitors.

Given the centrality of design in product generally, and the car industry in particular, it is hard to conceive of a situation in which car design might become less important. But such a possibility is being suggested by the increasingly popular phenomenon of carsharing. "Carsharing" is not "car pooling", the rite of passage that any parent goes through in getting their children to soccer/football practice or choir rehearsal. Carsharing (or "car clubs", in the UK), as defined on Wikipedia, "is a model of car rental where people rent cars for short periods of time, often by the hour. They are attractive to customers who make only occasional use of a vehicle, as well as others who would like occasional access to a vehicle of a different type than they use day-to-day. The organization renting the cars may be a commercial business or the users may be organized as a company, public agency, cooperative, or ad hoc grouping".

The Carsharing Association, here, describes "carsharing" further at carsharing.org as follows:

"Carsharing is defined by its environmental and social purpose, rather than business and financial objectives.

Carsharing is designed for local users in support of community transit and environmental goals. Its mission, vision and values lead to actions aimed at decreasing personal car ownership, reducing vehicle distance travelled, improving urban land use and development, providing affordable access to vehicles for all constituencies, as well as motivating residents to walk, cycle and take buses and trains, and decreasing dependence on fossil fuels while reducing the emission of greenhouse gases.

Carsharing is a membership based service available to all qualified drivers in a community. No separate written agreement is required each time a member reserves and uses a vehicle. All CSOs offer members access to a dispersed network of shared vehicles 24-hours, 7 days a week at unattended self-service locations.

Carsharing is primarily designed for shorter time and shorter distance trips as an extension of the transportation network, providing a public service designed to enhance mobility options. Longer trips may be available to further discourage car ownership. CSOs help members save money over the cost of individual car ownership by encouraging members to drive less often, plan trips more, use other modes of transportation more, and share fuel efficient vehicles when a car is needed."

What stands out from this description are the societal, communal and environmental underpinnings of the carsharing movement. These characteristics are almost antipodean to the notion of individual expression and identification with one's car, which serves as the heart of car design. "You", not someone else, "is what you (own and) drive". What happens, however, where the car becomes a commodity item, for use on "a need to need basis"? In such a situation, will those who become active members of the carsharing movement eschew design in favour of other considerations? This question was recently asked on Bloomberg radio of a former senior GM designer. His brief response was "no"; people will continue to place a priority on car design, even if their use is largely in a carsharing environment. Maybe yes, maybe no, with downside in the event that the answer is "no". If that occurs, we might see a potentially tectonic change in the relationship of car owners to car design, at least in those markets where carsharing reaches a critical mass.

How Does Design Impact on Car Branding: the Example of Kia

I have always been hesitant about commenting on matters of design. As hard as I try, I still find it difficult to articulate in an open forum the principled distinctions between registered designs, unregistered designs, petty patents, copyright, and three-dimensional marks. I suspect that the list could go on, but enough self-doubt for a single paragraph.

It is against this backdrop that I refer to an article that appeared in the May 31 issue of Bloomberg BusinessWeek. Under the by-line of Seonjin Cha, the article, "Kia Turns to Design in a Bid to Move Upmarket", discusses the policy decision by Kia Motors to improve the design quality of its vehicle mix and thereby to realize a greater price premium for its vehicles. In a word, Kia seeks to remake its image from what the summary tag line of the article describes as "long-known as a maker of low-priced utilitarian vehicles" to cars known no less for their distinctive design.

To accomplish this, Kia in 2006 hired vehicle designer Peter Schreyer, who had made a name for himself in connection with the "iconic" Audi TT sports car. Schreyer viewed Kia at that time as " 'just another Asian carmaker' without much character." Since joining the company, he has led the revamping of the product line, namely "the revamped Sorento sports-utility vehicle, the Seoul crossover, and the Forte compact", all characterized by "the tiger-nose" feature [can someone help me on what this feature is, please?]

But the current crown jewel is the introduction of the new Optima sedan (it also sports the "tiger nose" feature), which is intended to compete head-to-head with the venerable Toyota Camry and the Honda Accord sedans, but with a price that is $1,600 less than the perenially popular Camry. And so the question: what do we make of all this emphasis on vehicle design, especially against the background of Kia's results for the first four months of 2010. According to the article, Kia enjoyed a 44% increase in year-over-year retail sales. Is that impressive sales figure due to the improved design of its cars or are other factors at work? The article itself is ambivalent.

"Yes" suggests Schreyer, who describes the Optima as an "Italian suit", distinguished by its "simplistic elegance". A further "yes" comes from an automotive consultant, Eric Noble, who gushes that Schreyer has "transformed the company into an industry in design."

And yet, as the article observes in closing, other factors may be at equally, or even more, at work. Most notably, a Swedish car retailer opined that the main reason for the increase of sales of Kia cars is the seven-year warranty introduced this year, together with the seductive price. Maybe that view is unique to the Swedish market, maybe not. The article tantalizingly does not pursue the issue in other principal North American and European markets.

Branding Can Sure be Lonely Sometimes

The popular wisdom has seemed to be that the rise of the Korean car industry rests on the uber-branding of price and reliability, antipodal to the perception that negative features that seem to be hounding Toyota. Does rebranding, via an emphasis on design styling, ultimately serve the long-term interests of Kia? Rebranding on the basis of design might increase the feeling of passion for Kia vehicles, but passion has a way of both ascending and descending in rapid trajectory.

And so--maybe the answer is "yes". Spotting a potential vacuum in the more up-scale auto mark, the only way for Kia to go is to occupy that branding position, and the only way to do it is by matching or bettering their competition in styling and design as well.

But maybe the answer is "no". In entering the crowded market for the more up-scale vehicle, will Kia lose its ability to compete in emerging markets such as China, Brazil and India? Maybe the greater margins in the up-scale market will make up for a lesser position in this developing markets. Or maybe Kia will somehow manage to merge up-scale design with developing marketing, and manage to succeed in both markets. If so, that might be a world-beating branding strategy and a landmark contribution for the role of design in achieving this goal.