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In the period just before the pandemic struck, Australia had been in a rather interesting crossroads.
The market situation was being discussed and many concerns had been raised by the many speakers at the Automotive Marketing Summit held in Sydney and Melbourne by Mumbrella recently. The topics discussed had been many, ranging from manufacturing concerns, mobility brands, EVs, and many more.
Auto Punditz had already reported that the industry was already in the red. The sales figures for 2020 had registered a drop of 8%. The sales figures were the worst since 2011. The worry could be seen clearly in the car sales figures for 2020 being almost 100,000 lesser than that in 2018, just two years ago.
The pandemic had bled the Auto Manufacturers even as the disruptors were gaining ground, at their expense, initially.
In fact, 2020 was a tale of two halves, the first half comprising Q1, Q2, and Q3 and the second half comprising Q4.
In 2020, car sales declined by 13.7%.
However, in Q4, the sales saw a surge, as the country was getting inured to the new normal Covid19 times.
The pandemic had meant that the Car consumer had been forced to be cocooned at his home as WFH (Work From Home) became the norm. This necessitated renovations at home, for WFH. Also, the customer discovered that they could fit in another car, more suited to the WFH lifestyle.
April 2020, when the pandemic first struck, had registered a new car sales decline of 48.5% - the sharpest in Australian history. Also, it had been the 26th consecutive month when the sales had declined.
Q4 threw up interesting data. In November 2020, sales grew by 12.8% (over Nov 2019) and December 2020 grew by 13.5% (over Dec 2019). This is impressive considering Covid19 had not hit Australia in Dec 2019 yet, and 2019 had been a bad year as per normal conditions..
The pandemic concerns affected the Ride Sharing mobility solutions too.
IBISWorld has estimated its revenues to decline by 6.6% in 2020.
The Pandemic concerns have raised alarm in the customers about using the Ride Sharing platform, making them forsake it. This has put the manufacturers in an advantageous position as the customers preferring personal transport over ride-sharing.
They are however optimistic that the Pandemic concerns will get addressed and the Mobility and Ride Share will once again find favor.
Former Holden marketing boss Mark Harland believes that the mobility trends we were seeing previously will bounce back.
“The automotive market was depressed, it’s all been going backward for the last few years. But we will get back to those mobility trends – that’s the future still. They did go backward – people didn’t want to hop on a train or in an Uber, so people went out and bought a car, the industry had a blip, it (car sales) took off. But long term it’s different. This was a little blip, a short-term anomaly.”
The manufacturers could devise innovative marketing approaches to make hay, as it were, till the time the Sun is not shining bright on the Mobility Solution players. They need to make the most of this “blip” for the mobility solution and rideshare industry.
The marketing in the Automobile would need to reinvent itself as it addresses the unique challenges offered by the pandemic.
On the record, well-respected marketer Kevin Goult, the marketing director at Hyundai Australia, said at the Mumbrella Automotive Marketing Virtual Summit late last year, “we have to adapt to our environment. We’ve got to adapt. We’ve been restrained by this metaphorical straight jacket”.
He went further by saying: “We’ve been doing the same things over and over again. That’s just inherent by the design of the automotive industry. It’s what we do. We sell cars, it’s very traditional. We are at a pivotal moment now where the cars themselves have outpaced the way that we market them.”
Harland suggests the same as Goult. “They’ve got to differentiate themselves quite frankly. Australia was coming to this anyway, but I think the days of just saying ‘we’re on sale, it’s the end of the financial year, end of the calendar year,’ the same old, same old, were done. I don’t think it gets it done anymore. It’s just noise.
“The challenge for a marketer is, assuming you have a supply of a vehicle, how do you differentiate yourself? I think just screaming at people that you’re on sale is not going to do it. You have to start to pull out some messages that show how a particular vehicle resonates. How do I differentiate myself? How do I teach customers?”
Indeed, fresh ideas have been observed in the marketing sphere recently. For example, Jeep has come out with an innovative campaign for the WFH times, even as WFH is slowly getting reduced.
The year 2021 comes with its unique challenges, especially for the Automobile Industry. The biggest change observed is that the consumer has fundamentally changed.
Sam McOrist, director of strategy at Destination Group describes it eloquently:
“There’s the notion of the evolved consumer. Expectations continue to rise exponentially,” he says. “More customer experience touchpoints need to be understood. After-sales becomes a really key component of the business in terms of more opportunities to deliver value. We need to look at new ways of solving problems in this time where historic data may not be a good predictor of future behavior and trends. We need to look for collaborative problem-solving methods in human-centered design and innovation mindsets.”
The idea of
being able to buy a Car online is itself too pathbreaking for many marketers.
The complexities involved in the manufacturer/dealer relations have got increasingly blurred, with the online shopping experience for the customers. The impact of online shopping, even for cars, should have been possibly forecast by the marketeers long ago but was necessitated due to the pandemic.
As per Diana Di Cecco, former marketing boss of GPC which includes brands like Repco and now the CMO of 8-Star Energy, many manufacturing marketers may have already let go of the opportunity to spot this potential.
She says: “I do wonder what some [automotive marketers] have been doing, I know that sounds particularly awful, but you’ve got to think about it, what have they been doing, have they been sitting there twiddling their thumbs? If you’re not in the consideration set, you’re already 10 steps behind. I haven’t really seen manufacturers take a stand for who they are and what they are trying to be.
“If they are going to capitalize on COVID, they already should have started to do it. You can’t start at the end of COVID.”
All this has left the Australian industry in a rather piquant situation.
While the cars may have advanced technologically, the marketing has possibly not. Marketing communication and customer engagement have not been able to keep pace with the technological advancement of cars.
What’s the answer? It’s simple to say, hard to do. Goult says. “You could argue that the car itself is probably 10 years ahead technologically in advancement terms but our marketing is still behind. What we have to do is fast-track the way we go about marketing, the way we communicate, the way we reach out to our customers and engage with them.”
But some of the manufacturers have been trying to be different in their marketing in tune with the times. Here are two.
Lexus
has recently begun to focus on after-sales experience as opposed to simply shifting to a new model. It has taken the advice of Harland, Goult, and McOrist and differentiated significantly. The latest campaigns have been focussing on the Lexus Encore – perhaps best thought of as the Frequent Flyer scheme for the Japanese brand.
There are now tiers, experiences, exclusive events, rewards, and much more. When a customer buys a Lexus, he buys into the brand. It envelops him from a range of different angles – the customer is forced to think but that he is a little bit special. Sure, a bad experience with the car will wipe out all the good work, but assuming the vehicles do what they say, the owner isn’t just driving a Lexus, he is now living a Lexus lifestyle that makes them feel warm and fuzzy.
Volkswagen’s AR campaign
Volkswagen has taken another approach.
It has focused on used cars too. This possibly had been, possibly, been thought of long before the pandemic struck, but the timing has suited it.
It is delivering care plans for the used Volkswagens.
The customers can purchase certified, pre-owned vehicles, which most manufacturers do, but Volkswagen has gone one step further with the 4Plus Care Plan.
If you have a Volkswagen between 4-15 years old, the customer will be eligible to purchase a two or four-year 4Plus Care Plan. This gives the customer great confidence, over other brands, to make a more confident second-hand purchase in the automotive market.
As Volkswagen’s PR and brand experience manager, Kurt McGuiness, explains, it was simply about capitalization. “From a marketing and communications point of view, the real key to understanding or influencing any sort of market trend is to actually capitalize on opportunities. Speaking from a Volkswagen Group Australia perspective, we really just got down to the business of distilling what was important in terms of what we delivered to stakeholders and customers.
“We’ve spent quite a bit of time developing our used car program,” McGuiness adds. “We wanted to bring some of those new car elements into a pre-owned program. So we have a certified pre-owned program that’s largely marketed through the dealer network and again, you can buy online and add in service plans.”
During the height of the COVID, the company had run an innovative campaign: the World’s Smallest Dealership campaign which was AR-based.
With the disruptors themselves being disrupted by the pandemic, it is reiterated, the manufacturers have now been served a golden opportunity, on a platter. But not many seem to know how to grab this godsend opportunity. And, with rapid developments being made in vaccination and control of the virus, the opportunity window might close fast.
The weakening of the competition from the disruptors could be however provide an opportunity for another disruptor: the EV option.
The EV platform has generated a lot of interest but has not been to translate this interest into sales, as yet.
The Pandemic offered the customers the time to consider the EV option and weigh its pros and cons.
The customers are actively weighing whether to consider the EV option over the fuel-guzzling ICE option.
Many manufacturers too had an interest and shown an inclination to invest in the EV sector, as another flank in their product mix.
The marketeers of the manufacturers will need to back up this sector and come up with innovative pathbreaking communications to attract the customers and gain from this situation.
The pandemic has altered the ground realities. It has led to a new evolved customer, new evolved market realities, new market challenges, new evolved market opportunities, and now, possibly, the new evolved marketers (of manufacturers) too !