Brand Power

My recent China trip, which was super fruitful from the company's business perspective, also inspired me to make some more general observations.

One area, in particular, is the development of the Chinese automotive industry. Which has clearly been accelerating to claim the global pole position, dethroning Germany, Japan and America. The Chinese cars, in short, are just amazing. From both the design, technology, and - of course - price level perspective.

The cars become increasingly popular in Europe, where some re-branding is in place. For example when you rent a car in Spain, chances are it will be a DR, which simply is an Italian sticker on the Chinese Chery. But actually in China the dominating brands are completely alien to a Western visitor. But then there are also the well known Western and Japanese brands present (albeit the vehicles are not that prominent, not really standing out).

On the other hand, Chinese love premium brands. Louis Vuitton (Europe's 2nd largest company by the time of writing) is everywhere. Even on things like premium wines. Brand licensing is clearly a big business on the Old Continent. Which brings me to an interesting view: will Mercedes, Porsche, Audi and other premium European car brands join the licensing business? There is clearly less and less technological appeal in the German automotive products: they are expensive and look dated. Perhaps time to close all those factories and start extracting the pure ip business?

Finally there is the elephant in the automotive room - Tesla. A phenomenally successful brand with astronomical value. And just as we speak it is being destroyed. Not long ago owning a Tesla was a symbol of progressive thinking and spoke very positively about the owner. No longer. In many countries it has just become socially unacceptable to buy a Tesla. The tide has turned almost overnight. And it does not look like it will turn back again anytime soon.