Auto Dealers Need Help to Conquer Competitive Market in 2020

BY Kathy Crosett
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U.S. automakers are preparing their 2020 strategic plans as they continue to face a competitive market. They're adjusting the models they offer in order to gain market share. And they're reviewing their ad strategy. While they’ve been adding digital media spending at a healthy pace, automakers still buy traditional advertising. Here’s what you need to know to help your auto dealer clients next year.

Model Mix

In response to the big consumer interest in SUVs and crossover SUVS, some U.S. automakers have cut back on the sedan lineup. As a result, reports Edmunds, Ford is losing favor with consumers who need to replace their sedans. Analysts note that Chevrolet is facing the same issue. The compact car market amounts to about 9% of total new vehicle sales. About 33% of compact owners typically replace these models with a similar one. When they can’t find what they want in the current brand lineup, they defect to other manufacturers.

While manufacturers worry about vehicle size and model mix, they’ve got a bigger issue to tackle: electric vehicles. Some analysts predict that EVs will account for 10% of new vehicle sales by 2020. As younger consumers, who know climate change will be the major issue of their generation, begin to look for vehicles, they’ll be seriously considering the more environmentally-​friendly EVs. Automakers are listening. By 2023, GM expects to have 20 new EVs available.

Advertising Plans

As we reported previously, automotive advertising is expected to drop by about 7% this year, to $34.4 billion. While media spending, on both traditional and digital formats, may decrease, auto dealers need help with digital marketing services. And, on a bigger scale, iSpot​.tv reports that automakers are still willing to spend on traditional 30- and 60-​second TV spots. Live sports programming and audience favorites like The Voice, generate the kinds of impressions that automakers need in the competitive marketplace. Local dealers can tie into the ads campaigns to drive foot traffic.

Auto dealers can also get creative with advertising by tapping into the co-​op advertising funds that auto makers have established. Co-​op ad support for digital formats is increasing. For example, some manufacturers reimburse dealer expense for chat/​text website tools and Wi-​Fi marketing. Other manufacturers now approve marketing expenses for live events.

If you’re selling to the automotive vertical, start talking with local dealers about how they can attract more consumer attention and business in 2020. Check out the Co-​op Intelligence Reports available on AdMall from SalesFuel to learn more about the financial support your clients and prospects can expect from automakers.