Car Marketers Challenged By Lower Sales, More Models

LOS ANGELES Automotive marketers may face a difficult year as sales continue to drift downward and the number of models increases.

Those were a few of the issues raised Thursday by Thomas Healey, partner of J.D. Power and Associates’ media, marketing and image practice, during the firm’s 16th annual Automotive Marketing and Advertising Issues Briefing, held at the Marriott in Torrance, Calif.

Healey noted that the “Big 3” automakers are continuing to lose share in light vehicle sales, dropping from 62 percent last year to 60 percent as of February 2003. Import sales have increased from 19 percent in 2002 to 22 percent. Healey’s forecast also noted that while the North American market for light vehicles continues to shift away from cars, that trend is slowing, and the Japanese “Big 3” will continue to gain share as they attack the truck segments that were once the strength of the North American “Big 3.”

This will be another boom year for model introductions, with 28 redesigns and 23 new entries, Healey said. An increase in prices at the pump may also change the nature of the cars people drive, he said. “Hybrids are going to really take off,” said Healey. “It’s an area that makes a lot of sense today.”

Healey added: “Brand building might become very difficult in the future. There will be a loss of ability to launch brands and evolve brands.” Factors contributing to this include too many vehicles, too many different models, too many similarities between cars and media fragmentation, he said. That should benefit strong, established brands, he said.

With the quality of commercial slots down due to clutter and an erosion of ratings due to the volume of channels available, Healey said solutions include target-audience relevant packaging aimed at producing efficient and effective units, possibly using a media broker, or using spot TV or ad hoc networks. While he pointed to supplements to media advertising including in-program and in-movie placements, celebrity tie-ins, special appeals to sub-targets and event tie ins, he said that advertisers must determine if the involvement is consistent with the brand and unique to the brand, if there is a possible backlash, if the involvement is too intrusive, the program is sustainable and the program is substantial.