I was listening to yet another radio discussion on France INFO about the Salon d’Automobile that is on in Paris at the moment. It’s actually called the “Mondial d’Auto” but nostalgics still refer to it with the original name. Listening to the experts debating the dwindling fortunes of the European auto mobile industry in these times of crisis was very revealing. One word that kept cropping up in the discussion was “la classe moyenne” (the middle class) – the main reason being that this was the social class that was most hit by the economic crisis and that risked changing its purchasing habits.
The vehicle industry turns out to be an interesting laboratory for assessment. Vehicles are either a utility or a luxury depending on how you see them but in any case, the vehicle industry needs to get a good feel of its clients and their needs if they want to keep selling new models. The first interesting observation I noted was that when clients buy a car they do not give price the highest priority. There’s a load of technical details that come before the consideration of price.
There’s that and there’s the very remarkable statement regarding the fad retro models – from VW Beetle to FIAT’s 500 to the Mini Minor to the new 2CV Citroen that is being launched at this year’s salon. According to one of the speakers the kitsch attraction of these cars allowed manufacturers to price them way above the actual cost. The 500 for example costs very little to produce and the final sale price is nowhere near the original production cost. Yet people rushed to buy these cars – and it seems that they still do.
Then there was Renault and their subsidiary Dacia. When Renault bought the Romanian company Dacia their intention was to sell these cars in Eastern Europe. The line of Dacia cars is basic and their entry price is very accessible. What Renault did not expect is for Dacia to do very well in France and Europe. Exceptionally well. Which would seem to contradict the fact that clients will not give price much consideration unless you also consider that the Dacia line seems to guarantee a sturdy reliability at a good value. All the marketing experts at Renault failed to predict the success of this car – they failed to understand what the middle class really wanted. In the case of the Dacia the success came more of a hindsight than as an inspired marketing move.
What about the middle class then? Well the middle class is in trouble all over the place. The middle class in Europe was sold a dream that fit cleanly into a mixture of consumerism and government cushioning. The key to the growth of the middle class was linked with more spending and a constant pressure on one’s conception of “status” – what Alain de Botton famously described as Status Anxiety back in 2004. It is a bit worrying then that the classe moyenne – a preferred target of the automobile industry in times of recession – is in more than a bit of status crisis itself.
Which makes it all the more baffling that the very notion of “middle class” is being sold as something to aspire for by at least one of our political parties for the next election. Go figure.