Drew Smith: Hello and welcome to Looking Out where we connect the dots across Automobility, Design, and Culture.

Coming up in this show, we ask: 

• Why is it that Hyundai gives us reason to be hopeful? 
• What does it mean for design when design no longer matters to Apple?
• And what’s becoming of the small car market in Europe? 

I’m Drew Smith. 

Joe Simpson: And I’m Joe Simpson!

Drew Smith: Right! Let’s get this show on the road.

[00:00:33] 

Joe Simpson: First up, hopeful Hyundai.

In issue 29 of Looking Out, in the face of many industry headwinds and the unmentionable vile BMW XM, I walked through some reasons to be cheerful, highlighting some of the good we are seeing in the automotive world right now.

One of the references I made in that article was to Hyundai and specifically their Ionic 6. For those who aren’t familiar with it, the 6 is a mid-size sedan, the second car in Hi Hyundai’s electric ionic sub-brand. In contrast to the geometric Ionic 5 that came before it, the 6 is cast in the role of a modern streamliner: extremely smooth slicked back and really focused on aerodynamic efficiency. It has a class leading 0.21 coefficient of drag, and this results in a dramatic exterior design. So it’s an exemplar of a focus on efficiency. 

So why is this interesting? 

Drew and I met in person in Gothenburg recently, and when we sat down over a beer, I said to him, if you’d have told me 10 years ago that we’d be holding up Hyundai as a design leader, I’d have eaten my shoes.

So I think it’s worth exploring some of the things they’ve done and are doing to make this happen. Primarily it’s because we see Hyundai and Kia and Genesis putting design at the heart of the operation, right Drew? 

[00:02:16] 

Drew Smith: Yeah, absolutely. But I think one of the really interesting things is that if you look at the history of Hyundai, they’ve actually been at this game for a very long time.

Back in the 1970s when Hyundai was looking to produce their first independently designed and engineered car, they got in one of the all time greats of automotive design, Giorgietto Giugiaro, to come in and help sketch out the Pony, their first family hatchback. And as part of that contract, he also sketched something called the Pony Coupe.

Now, the Pony Coupe itself as a piece of design was lost to the annals of history for a period. But we actually saw its design then executed as the DeLorean, DMC 12, not much later. 

What’s really interesting about this is that it shows how an aspirational brand really did get a head start from bringing in external design expertise to give them that boost.

The same thing happened in the mid-eighties. The biggest selling car in Korea became the Grandeur. Now it’s not a particularly pretty car, but once again, Hyundai learnt from the best. They brought in Mitsubishi to help them develop the vehicle and ended up trouncing their home turf rival Daewoo in the process.

Now, as I said, there was a break, it’s fair to say, I think, from those early design successes. But if you look at what happened at Hyundai in the mid two thousands, I think it’s fair to say that we saw the same thing happening again. Right? 

[00:03:53] 

Joe Simpson: What happened was Peter Schreyer, who had been at Kia for a little while, and had been made president there really showing how Kia were putting design first and foremost took over as head of design at he Hyundai and he sort of starts to employ a playbook, which was first used at Audi. 

He brings in really big name great chiefs in the regions. He starts to do concept cars, which are really aspirational types of vehicles, which present a sort of halo image.

And really what’s happened is that that has been transitioned into the new leadership team with Luke Donkerwolke taking over from Peter quite recently and SangYup Lee being made head of Hyundai Global Design and then bringing in great designers, people like Simon Loasby. 

And I think what’s happened with that team is that they’ve done a series of jobs to realize the value that Genesis could have in being a premium brand and evolving it, and really playing with the Hyundai design language, using new technology, using the culture of Korea and really sort of riffing off Korea’s leadership in technology, Korea’s current intersection as a world junction of pop culture. 

There’s a great article by Christopher Butt over on Design Field Trip talking about how really Hyundai are the only brand that are really understanding the current sort of cultural zeitgeist and riffing off that you know. He talks about it as this idea of the legacy remix and how the Ionic 6 and the 5 are representations of that. And I think there’s point about consciously managing and holding up heritage, which is sort of where you came in on this, drew, right? 

[00:06:12] 

Drew Smith: Yeah, absolutely. And I think it’s worth just circling back to where people like Luke Donkerwolke and Saangyup and Simon have come from because before they joined the Hyundai group and that Hyundai Group includes the Genesis brand - it includes the Kia brand as well - they held some pretty interesting positions at interesting manufacturers, right? 

[00:06:36] 

Joe Simpson: So we had, you know, We had Luke Donkervolke who was, you know, at Lamborghini and Seat, and held senior positions within the Volkswagen group. Ssangyup Lee was at Bentley. Simon Loasby was a Volkswagen in China, and I think really understands China and that market really quite well for someone from the west 

[00:07:03] 

Drew Smith: And what I find fascinating is if you think particularly about Luke’s period at Lamborghini, he designed one of the most iconic, modern Lamborghinis in the form of the form of the Murcielage, SangYup while he was at Bentley was basically part of the reinvention of a brand that had become quite staid, quite moribund into something that was far more attractive to a much younger audience.

So we’re talking about some real heavy hitters in terms of the positions that they’ve held, but they’re also people who have a deep understanding for or sensitivity to heritage, or as you say in the case of Simon for picking up on those cultural hallmarks that exist within you know, Korean culture or Chinese culture, perhaps when he was at Volkswagen and drawing them into a meaningful sort of automotive design expression and I find that really fascinating. 

[00:07:57] 

Joe Simpson: Absolutely and I think it’s what we see, or what I enjoy is how they’re consciously managing this heritage. You know, these retro cars, retro plays on like, you know, the grandeur, the, you know, the N 74 and but they’re , they, they’re clearly having fun. 

So in a world which feels in some ways so tortured and so frankly, a little bit sad in the automotive world right now, they’re clearly having some fun and being original and I think putting design at the center has been key to that. 

But as we’ll discuss, next design is not in a great place everywhere we look and that’s got us a little bit worried. Hasn’t it drew? 

[00:08:46] 

Drew Smith: It does indeed.

[00:08:51] 

Joe Simpson: What does it mean for design in general when design no longer matters to Apple? 

Over the past month, Drew and I have been batting about a question of almost existential importance. The conversation was prompted by the departure from Apple of Evans Hankey, the second design chief. The company has lost in three years.

In an article on Bloomberg covering the story, which we’ll link to in the show notes, there’s an interesting analysis of the demotion of design at Apple and how it’s causing the company to lose its edge. 

So why is this interesting? 

Well, both of us are in the business of design and for as long as we’ve been working, Apple’s design driven success has been central to our arguments and advocacy for the importance of design driving commercial success, shifting brands’ reputations and projecting their values out into popular culture in a way that’s meaningful to consumers. 

But as Apple’s product strategy becomes more confused, their formal design language stagnates, and they make continued unforced errors in service and user experience design, who can we turn to for design leadership?

Drew, any thoughts? 

[00:10:25] 

Drew Smith: No! I’m really feeling this so acutely. And the funny thing is I think particularly as we head into a global slowdown and we see many organizations starting to make calls around where to invest their money, I think there’s a risk that we will see a continued scaling back of organization’s investment in design, right, and the proximity, they allow design to have to the very top of the decision making tree, which is the C-suite. And, you know, I think really what this comes down to is what are the priorities of, of the organization? What are the priorities of the CEO? And I think the big question Or the big indicator of the value that organizations place on design is where design reports into. 

Now, of course under Steve Jobs, Jonathan Ive reported directly into Steve and they were a phenomenal creative partnership.Under Tim Cook’s Reign design actually reports into the chief operating officer. So design is essentially subservient to operations. 

When you look at Tim Cook’s legacy within Apple, that makes sense because Tim was an operations guy and doing a double click on that, I think it is important to realize that Apple would not have had the success that it did had it just been Steve and Jony. They needed Tim as the operations guy to help them to execute. 

But what Apple is now lacking it seems, is that CEO with taste, who has the ability to act as the arbiter between operations and execution the design team and there was this brilliant little quote that I picked up from Marco Arment on Twitter, and he’s a very well known independent Apple developer, and he said: 

Tim Cook is a good business person, Tim Cook does not have good taste. We all want this to not be true, but we know that it is, 

And I think this is something that I see time and time again when it comes to being able to push through radical innovations or new approaches to design the CEO, as the final arbiter of what the company’s doing and what it projects out into the world, really has to get it.

[00:13:00] 

Joe Simpson: Yeah. And I think that famously, Jobs used to spend afternoons in the design studio with Ive, as you said, they walked lockstep on this stuff, and I sort of wonder how does design show up when we are looking at a time when companies are gonna be under pressure, when we’re in a global slowdown, when inflation rates are running out of control, when material costs are going through the roof and there’s pressure to deliver profit and shareholder value. Sometimes it can be very, very difficult to make design clearly sort of show up. “If we make this decision now, it’s definitely gonna have impact X in so many years time”. That’s just really hard to do in a concrete way. 

[00:14:01] 

Drew Smith: It is really hard to do, and I think it’s a question that designers have always struggled to answer within a business business context, right? What is the value of our work?

But you know, I think if you look at people like Chris Bangle at BMW, he very effectively advocated for design at the board level. Look at the run of Bruno Sacco at Mercedes-Benz. He also clearly had an incredible amount of sway at the board level in order to be able to develop such a distinct and consistent house style. I think it’s interesting if we think about our previous topic of conversation: at Hyundai. Luke Donkerwolke reports into the CEO of Hyundai. So, if you want to know which organization’s value design, look at the proximity of design to the CEO.

[00:14:51] 

Joe Simpson: And I think as a final point on that, I just wanted to add something that had popped into my mind as we were preparing for this show, which is that one of the unique things that Ive did was act in a role, both as software lead and hardware lead. And what Apple have done in this new structure of having design report to the COO is they’ve had Hankey as the hardware and Dye on the software side reporting to the COO, and I think it asks a question about the role of the head of design and heads of design tend to either be from a UX side or tend to be from a hardware side. There’s a need for design leaders to be able to bring those two houses together and symbiotically manage them to create an experience, which really both the digital and the physical together.

And I think that is gonna be a key skill for design leaders of the future. And I don’t see many design leaders out there right now who have that. 

[00:15:57] 

Drew Smith: Yeah, I was just gonna say, I mean, based on my experience of the automotive industry it’s still a real challenge to discuss anything related to digital experience design with the vast majority of senior design leaders in the organization.

And I think that would be a great topic for us to do a deep dive into in a future episode. But coming up next on this episode of Looking Out we ask what’s to become of the small car?

With news that Ford has canceled the Fiesta after an incredible 47 year run and Volkswagen openly mulling the death of the Polo, things are looking grim for the European small car. Blame the high cost of electrification and more stringent EU seven emissions regulations, which are due to be implemented in 2026.

It’s these new emissions regulations that Volkswagen claims will add EUR5,000 to the price of a EUR15,000 Euro Polo, making it all but unsalable. 

Now I can see where Volkswagen’s coming from. The internal combustion engine is a dead man walking banned from sale from 2035 onwards across Europe. So why sink money into its continued develop?

And currently Volkswagen can’t produce an EV cheaply enough to keep the Polo nameplate and its presence in the subcompact B segment alive. 

So why is this interesting? 

Well, in the last episode of Looking Out - The Podcast, we talked about the hollowing out of the city car A-Segment where you’ll find the likes of the Polo’s little brother, the Up, the Toyota Aygo and the Hyundai i10.

We pondered the question of what happens when people who can’t afford a bigger car, a locked out of the auto mobility market with the death of the Fiesta and potentially the Polo? That question and its answer starts to impact a whole new group of customers. 

What do you think, Joe? 

[00:18:05] 

Joe Simpson: I mean, this feels like a another existential crisis for the industry.

Let’s just take a look at some of those prices. You quoted a Polo as costing 15,000 euros, but cars have got a lot more expensive. I went onto the German Volkswagen site before we recorded the show. Cheapest Polo: 19,925 Euros. 

If you want to go for a cheap EV, a Renault Zoe, the smallest electric Renault: 36,800 Euros. 

A Renault Captur, which is a B-Segment, small suv, if you want a hybrid plugin, hybrid version of that, not even fully electric, 30,000 Euros.

And a Volkswagen ID three, which is a car you’ve referenced and is the cheapest electric car Volkswagen makes starting from 38,000 Euros. 

So really we are talking about prices that feel all but out of reach to, you know, the average person on the street. 

Now, the way that people have started to buy cars is very different. A lot of people now buy on finance and that’s a whole different topic. But I think there’s a few things at play here. What’s gonna be the impact of Chinese manufacturers coming in. When we met up in Gothenburg, we talked about how we could see that the EU was making moves towards being somewhat concerned that be an influx of Chinese EVs.

Some of those Chinese brands are government-backed, they won’t have the same profitability challenges that an independent car maker will. And as you said, Volkswagen has quoted that adding 5,000 euros to the price of a Polo makes it a unsalable proposition.

So I think this is a bit of a zero sum game. It’s a really tricky one for the European Union and the European Commission.

What do you do? You wanna move to a situation where you have zero emissions vehicle? They have said they’re gonna ban internal combustion engine vehicles by 2035. Some markets, like the UK have said they’ll go sooner, 2030, so you’re gonna get these decisions from the established OEMs and. 

I think the Chinese makers will step in with affordable propositions, the MG4, which is a lot bigger than something like a Renault Zoe is gonna start from around 29,000 Euros roughly.

MG is now owned by SAIC. It’s a Chinese brand, so, I think there’s some really interesting stuff at play here, and one of the things I wanted to ask you, Drew, is what you thought to what this does to the bottom end of the market. 

Will we see new types of proposition pop up that maybe wouldn’t today be classified as a car to fill the gap that might sort of work with some of the regulations around what classifies as a car and step in to fill that mobility void that some customers might find?

[00:21:42] 

Drew Smith: Yeah, sure. And you know, it’s interesting in the time that I’ve been living in Amsterdam to see how the number and the style and also the, the price points of Quadricycles have proliferated. 

Once upon a time, if you came to Amsterdam, you’d find these funny little sort of naughty cars called Cantas. They sound like a lawn mower. Because they’re powered by a lawn mower engine. They run in the cycle lanes, and if you’re on a bike, you should be absolutely terrified of these things because they’re typically owned by somebody who’s a little bit older and with terrible eyesight because you don’t need a driver’s license to drive one of these things. 

But what you are now starting to see in the wealthier districts of Amsterdam are things called Biros, which are much more expensive, they’re beautifully trimmed, quilted leather interiors you know, docks for your phones and Bluetooth speaker systems and what have you. And they’re driven by young, extremely stylish people. They’ve become an aspirational product and in between the Biros and the Canters, there’s a whole new range of of, of quadricycles coming to market.

That’s before you even look at things like e-bikes and the impact that e-bikes are having on the low end of the automotive market. So I think that’s probably an interesting angle to explore. It’s an interesting angle to look at this from. 

But you know, we have become so used to the idea of cheap cars. We’ve become so used to a set of well established price points that have positioned, you know, smaller vehicles right down at the end of the market where, where pretty much anybody could, could afford to get into one. And that’s just not going to be the case moving forward.

Joe, any final thoughts on the topic from you? 

[00:23:30] 

Joe Simpson: I wonder whether this might cause some radical thinking about what constitutes a car and some push around legislation. 

What we’ve all got used to as consumers is cars, which are fundamentally, amazingly better than they were 25 years ago. Cars that work all the time, cars that you can crash at really high speed and you won’t die in. Cars that are incredible in terms of what they adhere [00:24:00] to and what they can do and where they can be driven and what they allow you to do.

Every car has a level of comfort, convenience, safety, environmental qualities, which are astounding in many ways. But we’ve got used to having a lot and that costs a lot. And if we’re gonna put better powertrains in that are zero emission from the car, what would we be willing to give up.

I wonder whether there’ll be a exploration by some OEMs, maybe like the French, maybe like the Citroen Oli, about what you actually need in a car. If you fundamentally just want mobility, what do you actually need? And therefore how much can you take out? How much cost and weight can you take out?

And do any of the established automotive OEMs go into that space? I don’t know. It’s a really interesting one to ponder. And I think the other thing is, as you say, I think we’ll just see people replacing second cars, older cars with, you know, e-bikes and cargo bikes instead of another car. Which might have a positive effect on cities.

Who knows? 

[00:25:05] 

Drew Smith: Well, you know what they say, constraint is the source of creativity. So it, I have no doubt it’s gonna be a really interesting space - what constitutes a car - to explore going forward. 

That’s it for the headlines for this show. 

But Joe, what else have you found interesting of late?

[00:25:24] 

Joe Simpson: You mean other than Elon musk trying to destroy Twitter?

Drew Smith: Oh God. We’re going there, aren’t we? 

Joe Simpson: We are going there. We couldn’t do this episode without talking about it. No, because actually, actually I have been on Twitter since 2007. 

Drew Smith: We met on Twitter. 

Joe Simpson: We met on Twitter. We are sort of a, a product of Twitter to some degree.

Twitter I feel has helped me get jobs. Twitter has connected me and helped me meet people who’ve really influenced my life and the trajectory of my career. So please forgive me if for a moment I sound slightly sad by the concept that it might go away. 

I am fascinated by what Musk is doing.

I think what he’s done in terms of leadership of a group of people who work there and the lack of care he’s had for that, their livelihoods and, and what they’ve done is horrendous and has interesting sort of secondary effects. You know, if I’d have ever considered buying a Tesla before, I definitely wouldn’t now because of that sort of behavior. 

But I’m also curious, I have started to read articles popping up saying, actually this is the Musk way. And it’s like: nearly kill it to actually reinvent it and bring it back for life. And so, you know, while it’s still there and while it’s not totally falling over, I’m curious to see how and in what way it might get reinvented. Does it get reinvented if it doesn’t? And it if it did die? It’s almost unthinkable, but it seems a possibility. Where and how do I take the network that I’ve built up and, and where do we build that somewhere else because I don’t really want to lose that. And some of those connections, which I think are really important.

[00:27:15] 

Drew Smith: Is there maybe a lesson in the burn it all down and rebuild it approach to things for the automotive industry?

Joe Simpson: I feel as, as someone that, you know, some might accuse of being part of the problem. I, I probably can’t comment on that. I’ve spent 15 years of my career supporting and consulting to automotive firms and now work for one. So I, I don’t know.

[00:27:40] 

Drew Smith: I think there is something really interesting in that point about centralization and the concentration of control, which is what people like you and I unwittingly did when we signed up for Twitter, right?

We, we, we basically handed Twitter control of, of our, our social graph, all of the connections [00:28:00] that we have. You know, for my part, as soon as I saw what was happening, starting to happen I, I revived a long dormant Mastodon login and managed to transfer all of the contacts that I have from Twitter onto Mastodon.

But what’s really interesting about Mastodon is that. No one entity owns control of my social graph. It’s stored in a common format, so if I want to take my social graph and use it on another service, which uses the same open source underpinnings as Mastodon does, I’m free to do that. I can, I can move around.

So we have the tools, we have the opportunity, I think now to be able to release the grip of centralized control over our online presences. The challenge is that there’s an adoption curve, right? It’s gonna take people time and the energy, if indeed they can find it to unplug from an old model and get to grips with a new one.

And, and it remains to be seen how many people will actually want to do that and, and will a service like Mastodon actually reach the critical mass that it needs in order to a legitimate replacement for Twitter? 

[00:29:11] 

Joe Simpson: I should ask at this point, if people want to find you on Mastodon how, how would they do that?

Drew Smith: @drewpasmith@mastodon.au. 

Joe Simpson: There we go. You can now go and find Drew. I mastered on. 

So Drew, what have you been looking at interested in and keeping you intrigued this kinda last month or so? 

[00:29:33] 

Drew Smith: Well it’s interesting that we started talking about social networks because I’ve been looking into some theories behind the growth of social networks to understand just how successful or otherwise Mercedes much-criticized $1,200 annual subscription to a performance upgrade will be. 

So for listeners who aren’t aware, Mercedes recently announced that if you buy an EQE, an EQS or the large EQS SUVU, which I think is the EQS SUV, 

[00:30:08] 

Joe Simpson: that’s also the EQS SUV or the EQE SUV.

Drew Smith: Not confusing at all. If you buy one of those vehicles, for the princely sum of $100 US a month, you can upgrade the performance of your vehicle by 0.8 to 1.0 second over the 0 to 60 mile an hour sprint, or the 0 to 100 kilometer an hour sprint. So that means over the course of a year, you are paying 1200 bucks to have this performance upgrade.

Joe Simpson: so this is basically, this is basically a software unlock that gets you extra horsepower and extra talk. Right? 

Drew Smith: Right. Because the vehicle already has the capability to accelerate that fast from the factory built in. 

So for your, for your 1200 bucks annually, you’re not getting any different hardware. You’re just having the crippled hardware that you’ve bought uncrippled. 

Now that is reason enough for, for many people to be up in arms. But the thing that I’m curious about is whether this is actually gonna work as a business model.

Because we’re seeing this right across the industry and you and I have talked about how automakers are essentially going for a revenue grab wherever they can because they’re losing margin left, right, and center because, the cars are much more expensive to produce. They have much more expensive technology in them. So, recurring revenue from subscription services seems to be the way out that they are now exploring to try and increase the margin and, and the revenue from their vehicles. 

So what I’ve been looking at is a way of assessing, and I’ll write about this in the next edition, of Looking Out, a way of assessing both the utility of these sorts of upgrades but also the social capital that they give the owners, because you could argue that as a utility boost to the vehicle, 0.8 to 1.0 second in the grand scheme of things is gonna make faff all difference to the day to day life of owners. 

[00:32:17] 

Joe Simpson: Right. I mean, they’re not exactly slow cars in the first place. For people that don’t know these are several hundred horsepower vehicles that’ll do a 0 to 60 mile an hour sprint in, you know, five seconds, maybe even slightly under five seconds already.

Drew Smith: Right? So let’s say you’re doing it in five seconds. You’re now gonna be doing that in four, right? And, and, and the practical difference of that in day to day life is nil, right? 

So you then start to look at questions of social capital. Does this upgrade allow you to signal in a legible, obvious way to other people that you have a better vehicle?

Now, historically, when you’ve done that, if you’ve wanted to signal that you’ve got a better class of Mercedes to other people, well, you bought the AMG, right? 

It had a different engine, you know, upgraded suspension, bigger wheels, fatter tires a really loud exhaust. It was really, really obvious to everybody that you’d, you’d bought this performance upgrade.

Then Mercedes did something really smart. 

They introduced something called the AMG-Line, which meant that. Could spend a fraction of the amount that you would spend on buying a full-blooded AMG car, but get something that to the uninitiated looked like an AMG. 

So you got some bigger wheels, you got a slightly nicer interior, you got a r steering wheel and, and, and a more aggressive grill.

So the social utility of the AMG-Line concept is, is actually really high because other people think that you’ve got a fancier car with the upgrade, right? 

We’re talking about adding 1.0 second or 0.8 of a second, but nobody can tell that you’ve got it. So if it’s not improving the, the utility of the vehicle and you are not able to demonstrate to anybody in an obvious or, or legible way that your vehicle is now better, why the hell would you buy it?

[00:34:18] 

Joe Simpson: So maybe you don’t wanna spoil what you’re gonna write in the next issue, but I mean, this is about bragging rights. Do you think it’s a , you know, the in British, in England, we’d say the, the pub brag, you know, I’ve got this and mine’s faster than yours. You know, it’s there’s a metaphor there.

Drew Smith: There is. Yes. But the beauty of something like the AMG or an AMG-Line car is that it brags to everybody without you having to say anything, 

Whereas with this performance upgrade, you have to say to somebody, well, I’ve paid 1200 bucks a year to get one second off my 0 to 60 time.

And then somebody might well say, say, well, okay, prove it. Well , 

Joe Simpson: or might say, why on earth have you done. 

[00:35:09] 

Drew Smith: You knob. I haven’t finished writing the piece yet. I haven’t grounded it out, but this is what’s been grabbing my attention for about the past 48 hours.

Joe Simpson: It’s a fascinating subject cuz as you say, there’s much of this going on, so I think it’s one that will run and run. So I’m very curious to see and follow this.

[00:35:30] 

Drew Smith: Well, that’s it for this third episode of Looking Out. It’s been a pleasure to have you with us. If you like the show, hit the subscribe button and if you know someone who might like it to please share it with them.

I, for one, am going to be winding down my presence on Twitter, and Twitter has actually been one of the greatest channels for sharing this show. 

So we’re gonna rely on the kindness of strangers - you folk who are listening to pass the parcel. And if you found this show good, then then share it with others who might like it as well.

For more about the topics in the show, please visit our website lookingout.io. That’s lookingout.io where you can sign up for the Looking Out newsletter. And you can also now grab the transcripts of our shows. 

Looking out the podcast was written and presented by Drew Smith. 

[00:36:25] 

Joe Simpson: And Joe Simpson 

Drew Smith: with Sound and Production by Chris Frith.

This is Drew Smith and thank you for listening.