GENEVA — Could costly crude be good for auto aesthetics? As the latest spike in oil prices sends buyers in search of cars that are smaller and more fuel efficient — and less lucrative for automakers — companies are looking for ways to defend their profit margins. One solution is to make compact cars cool enough to command a premium price.
Design, always important in the car industry, is becoming even more essential, auto executives said at the annual Geneva International Auto Salon, which continues through March 13.
“Design is the No.1 factor in the purchase decision,” said Norbert Reithofer, the chief executive of Bayerische Motoren Werke, whose Mini and 1 Series vehicles are two examples of small cars that buyers are willing to pay substantially extra for.
“Brand image is becoming more important and one of the key elements is design,” said Joachim Schmidt, head of sales and marketing at Daimler, the maker of Mercedes cars.
Car companies have always earned more money with big cars. But high fuel prices not only skew sales toward less profitable smaller cars, even buyers who choose to stick with larger cars may opt for smaller engines — a six-cylinder in their Mercedes, for example, rather than a V-8. That also hurts profits.
“We see a danger of downsizing,” Mr. Schmidt said.
Even without more expensive fuel, carmakers have been under pressure to make better-looking cars. For the premium carmakers, design is one reason that a buyer should pay more for a Lexus or a BMW. As Thomas Weber, the chief of research and development at Daimler, points out, you can buy a watch for $50 that tells time with the accuracy of an atomic clock. Design is what makes people pay thousands for a high-end Swiss brand.
Mercedes, once seen as rather staid, now considers it important “not only that a car looks good, but also that it looks cool,” Mr. Weber said.
But design has also become more important for mass-market automakers. “Today, if you make small cars you cannot make poor cars,” said Luca di Montezemolo, the chief executive of Ferrari and former chairman of Fiat. “Even cars that are not expensive are making a big effort to present nice, good design, with accessories and color.”
Pierre Loing, vice president for product strategy and planning at Nissan in Europe, said improved design had helped the company reverse a decline in market share that threatened to make its models irrelevant in Europe.
Mr. Loing, a former executive at Renault, recalled that when the two companies joined forces in 1999, Nissan designers had such low status that executives of the Japanese company had trouble remembering the name of the head of design.
Now Nissan’s design studios in Japan, San Diego and London are equal in the corporate hierarchy with engineers, he said. Design chiefs like Shiro Nakamura at Nissan and Adrian van Hooydonk of BMW are well known in the industry, and design and engineering are often intertwined, for example in the glass roofs available on some Mercedes cars that turn opaque in bright sunlight.
In Europe, Mr. Loing said, Nissan decided several years ago not to try to compete in all segments of the auto market and concentrated its design resources on two new models, the Qashqai and Juke crossover vehicles. The Juke is essentially a compact hatchback, but with the muscular look of an S.U.V. and four-wheel drive as an option.
With a starting price of about €18,000, or about $25,000, the Juke commands much more than many cars its size. “There are people who will pay decent money for a small car,” Mr. Loing said.
Design helped the Juke and the Qashqai, a larger station wagon with S.U.V. profile and features, to capture 20 percent of the market for so-called crossover vehicles in Europe, he said, compared with a 3 percent share overall for Nissan.
The trend toward stylish small cars is most advanced in Europe, where costly fuel has been a fact of life for decades. Design is less a factor in emerging markets, Mr. Loing said, where having any car is status symbol enough.
But U.S. carmakers are also trying add more cachet to smaller cars, with models like the Ford Fiesta and Chevrolet Cruze. Fiat is beginning to export its spiffy 500, a hit in Europe, to the United States via its cooperation with Chrysler.
In Geneva, Ford displayed a new vehicle, the B-Max, that shares some design features with the Fiesta but also minivan-type design elements including rear passenger doors that slide rather than swing open. Ford plans to start selling it next year.
Design, always important in the car industry, is becoming even more essential, auto executives said at the annual Geneva International Auto Salon, which continues through March 13.
“Design is the No.1 factor in the purchase decision,” said Norbert Reithofer, the chief executive of Bayerische Motoren Werke, whose Mini and 1 Series vehicles are two examples of small cars that buyers are willing to pay substantially extra for.
“Brand image is becoming more important and one of the key elements is design,” said Joachim Schmidt, head of sales and marketing at Daimler, the maker of Mercedes cars.
Car companies have always earned more money with big cars. But high fuel prices not only skew sales toward less profitable smaller cars, even buyers who choose to stick with larger cars may opt for smaller engines — a six-cylinder in their Mercedes, for example, rather than a V-8. That also hurts profits.
“We see a danger of downsizing,” Mr. Schmidt said.
Even without more expensive fuel, carmakers have been under pressure to make better-looking cars. For the premium carmakers, design is one reason that a buyer should pay more for a Lexus or a BMW. As Thomas Weber, the chief of research and development at Daimler, points out, you can buy a watch for $50 that tells time with the accuracy of an atomic clock. Design is what makes people pay thousands for a high-end Swiss brand.
Mercedes, once seen as rather staid, now considers it important “not only that a car looks good, but also that it looks cool,” Mr. Weber said.
But design has also become more important for mass-market automakers. “Today, if you make small cars you cannot make poor cars,” said Luca di Montezemolo, the chief executive of Ferrari and former chairman of Fiat. “Even cars that are not expensive are making a big effort to present nice, good design, with accessories and color.”
Pierre Loing, vice president for product strategy and planning at Nissan in Europe, said improved design had helped the company reverse a decline in market share that threatened to make its models irrelevant in Europe.
Mr. Loing, a former executive at Renault, recalled that when the two companies joined forces in 1999, Nissan designers had such low status that executives of the Japanese company had trouble remembering the name of the head of design.
Now Nissan’s design studios in Japan, San Diego and London are equal in the corporate hierarchy with engineers, he said. Design chiefs like Shiro Nakamura at Nissan and Adrian van Hooydonk of BMW are well known in the industry, and design and engineering are often intertwined, for example in the glass roofs available on some Mercedes cars that turn opaque in bright sunlight.
In Europe, Mr. Loing said, Nissan decided several years ago not to try to compete in all segments of the auto market and concentrated its design resources on two new models, the Qashqai and Juke crossover vehicles. The Juke is essentially a compact hatchback, but with the muscular look of an S.U.V. and four-wheel drive as an option.
With a starting price of about €18,000, or about $25,000, the Juke commands much more than many cars its size. “There are people who will pay decent money for a small car,” Mr. Loing said.
Design helped the Juke and the Qashqai, a larger station wagon with S.U.V. profile and features, to capture 20 percent of the market for so-called crossover vehicles in Europe, he said, compared with a 3 percent share overall for Nissan.
The trend toward stylish small cars is most advanced in Europe, where costly fuel has been a fact of life for decades. Design is less a factor in emerging markets, Mr. Loing said, where having any car is status symbol enough.
But U.S. carmakers are also trying add more cachet to smaller cars, with models like the Ford Fiesta and Chevrolet Cruze. Fiat is beginning to export its spiffy 500, a hit in Europe, to the United States via its cooperation with Chrysler.
In Geneva, Ford displayed a new vehicle, the B-Max, that shares some design features with the Fiesta but also minivan-type design elements including rear passenger doors that slide rather than swing open. Ford plans to start selling it next year.
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