Archive for the ‘Retail’ Category

17 Million in sales predicted for 2015, here we go…

Friday, December 10th, 2010

Things have been looking up in the US market for the automotive industry lately.

Sales have been improving.  November was strong with most companies showing significant gains and one, Hyundai, blowing past everyone else with a +46% increase over same period year ago.  Some marques like Audi are predicting that they will achieve new sales records in 2010 and break the 100,000 unit mark for the first time.  It looks like we’ll finish the year at about 11.5MM units, up about a million over 2009.  Next year sales are expected to improve to 12.8MM.

The LA Auto Show was up beat; there were a number of new and exciting products shown (my personal favorite was the Audi quattro concept).  The sense of the industry moving forward was palpable; it was good to be there.  Then of course there’s GM’s successful IPO, where investor interest was so strong that the share price exceeded everyone’s expectations.

Even more important, the industry has made important progress during the worst recession within memory.  Given the widely held view in 2008 that we were entering a “new normal” with significantly lower industry sales, manufacturers took steps (some with taxpayer help) to reduce production capacity, which has led to dramatically lower inventories at the dealer level.  In turn, lower inventories combined with better product quality have led to lower incentives and higher margins.  Some manufacturers (BMW, Fiat) are even attempting to encourage consumers to order cars and wait for delivery as Americans become accustom to lower inventory levels and the idea that the car they want won’t be on the lot.

Sales on the rise, higher margins, lower inventories, Americans ordering cars, what’s not to like?  Nothing, all good news, until… (more…)

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Posted in Auto manufacturers, Retail, Strategy | 4 Comments »

Ford, with Mike Rowe, gets Tier 2 retail right.

Friday, October 1st, 2010

Anyone who has worked in automotive marketing knows how tough it is to do really good Tier 2 advertising.

Here’s the issue.  Tier 1 is funded by the manufacturer and is often referred to as the “brand” communications.  Tier 3 is the communications funded and executed at the local level by individual dealers.  Tier 2 is caught betwixt and between.

Funded in part by the manufacturer and in part by the local market dealer groups.  Tier 2 must serve two masters.  The manufacturer wants to be sure that the work reflects the brand and makes the doors swing whereas the dealers are understandably concerned with just making the doors swing.  Just to make it more difficult, the manufacturer’s marketing team and the dealers often have a different points-of-view about what will make the doors swing.

Tier 2 is where the brand versus retail discussion often gets very heated.   It is very tough to find a balance between the brand and retail messages.  More often than not, you end up erring toward the retail.  We all know what this formula looks like.  The TV commercials are visuals of the vehicle on the road, held together by a litany of product features in the copy and you tie it up with a bow…the deal.  The newsprint is a visual of the car, a couple of sentences covering key features, the deal and some legal disclaimers.

This leads to a sea of sameness when it comes to Tier 2 communications.

But it doesn’t have to be that way.   (more…)

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Posted in advertising, Auto manufacturers, Automotive Retail, Retail, Uncategorized | 6 Comments »

Reaction to the White House’s new vehicle sticker proposal: “If we get below a C do our parents have to sign off on it?”

Tuesday, August 31st, 2010

So said my 24 year old son when he saw the announcement that the White House/EPA was planning a major overhaul to the window stickers that appear on new cars to include a grade based on fuel efficiency and emissions.  To be fair, the EPA has put forth two proposals, one without a “grade:”

and one with a grade:

According to the EPA’s website the “EPA and the National Highway Traffic Safety Administration (NHTSA) are updating this label to provide consumers with simple, straightforward energy and environmental comparisons across all vehicles types.”

Fair enough, after almost thirty years with very little updating, it’s probably time to make some improvements to the industry’s new car stickers.  I’m all for providing consumers more and better information to enable them to make the vehicle purchase decision that is best suited to their needs and desires.  I doubt that anyone in the industry would disagree.

Here’s the rub, the option with the letter grade is a not too thinly veiled attempt on the Government’s part to pass a value judgment on your decision to purchase a vehicle. (more…)

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Posted in Communications, Government regulation, Retail | 1 Comment »

Responding to Toyota’s troubles. With incentives!!??

Thursday, February 11th, 2010

Toyota has been very successful in the US and has undeniably eaten Detroit’s lunch. Now Toyota has stumbled and you can hardly blame its competitors for attempting to take advantage of the situation.

That said, it’s a good time to pause and take a deep breath, because as so often is true, it’s not what you do but how you do it that matters.

Today’s New York Times has an article headlined: “With Toyota in trouble, rivals gain.” Manufacturers are offering incentives to encourage Toyota owners to come in their stores, trade-in their Toyota for a new whatever. Supposedly these incentives are not being widely advertised and dealers are being encouraged not to “try to take a predatory stance in this type of environment.”  According to GM and others, their dealers have requested incentive support.  Of course they wanted incentive support, there’s blood in the water.

There are a couple of good reasons to push back against this knee jerk reaction to offer incentives. (more…)

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Posted in Auto manufacturers, Automotive Retail, Branding, Retail, Strategy | No Comments »

Do you know what your automotive brand’s promise is?

Tuesday, January 26th, 2010

There’s an interesting piece in this week’s Adweek by Dean Crutchfield, Chief Engagement Officer at Method: “A Brand by Any Other Name…”

He posits that one of the issues with “branding” as a marketing discipline is that we lack an agreed-to definition, which subjects it to interpretation based on circumstances or agendas.  He closes by saying that agencies and marketing services firms need to more tightly define branding:

“If we don’t address this, we could be perceived as an industry made up of people who don’t know how to define what it is they’re not supposed to do.  As Grouch Marx would have told us, ‘These are my principles; if you don’t like them, I have others.”

Leaving aside the issue of agency credibility, the automotive industry needs to dedicate itself to building or re-building its brands. Manufacturers who do will succeed in the hyper-competitive “new normal” automotive marketplace, while those who don’t will languish.

The automobile business has traditionally had a shaky relationship with the idea of “branding.”  Programs designed to define or position the “brand” are often perceived as the “soft” part of automotive marketing.  This perception is in contrast to the marketing specifically designed to drive traffic to the stores or in industry parlance “make the doors swing.”  Often manufacturers feel that they have to choose between “branding” and “retail” and more than often than not they choose retail.

I think that part of the problem with the discussion of “branding” in the automobile business is that it most often devolves into a discussion of advertising, as in “this is a brand ad, that is a retail ad.” Brand ads are the ones that attempt to speak to a company’s “values” whereas retail ads feature “product, place and price.”  This either/or conversation is specious and has led the industry to it’s current situation, products that are perceived more like commodities and customers who focus on pricing.

Let’s be clear, in the “new normal” automotive market the traditional brand vs. retail discussion is a path to commodity status, decreased sales, decreased profitability and the loss of already weak brand equities.  The truth is, every successful automotive competitor will do both jobs, build brand leverage and make the doors swing.

The marketing conversation needs to start in a different place and I agree that it needs to start with a definition of what we mean by “brand.” (more…)

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Posted in advertising, Auto manufacturers, Automotive Retail, Branding, Communications, Retail, Strategy | 18 Comments »

“Cash for Clunkers”- Fodder for the Spin-Meisters

Tuesday, August 4th, 2009

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Here’s what Robert Gibbs had to say about Cash for Clunkers:

“It’s good for dealers and auto manufacturers, it’s good for our energy security and our environment.”

Like most “spin” there is an element of truth in all these claims but not as much as the claimants want us to believe.

Let’s begin with the environmental claim and the inference that the Cash for Clunkers program is making headway in the fight against global warming.  Yes it is true that a few relatively “dirty” vehicles are being taken off the roads and replaced with new “cleaner” models.  This is surely a good thing to do, but it has virtually no impact on the environment and it certainly has no impact on global warming.  The number of vehicles being traded in is a drop in the bucket.

I’m willing to give the spin-meisters the fuel efficiency claim.  It is certainly true that relatively inefficient vehicles are being traded in for more efficient models.  Of course that was the requirement to get your fellow taxpayers’ $4500, so let’s hope that it was accomplished.  That said, the “energy security” claim is pure political BS.  Again, too few cars, with too little efficiency gain to reduce our consumption of foreign oil in any meaningful way.

(more…)

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Posted in Automotive Retail, Retail, Strategy | No Comments »