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Is the Automotive Industry Recovery Under Way?

by | 2 minute read

Is it too soon to wonder if the automotive industry recovery is under way? Automotive dealers and manufacturers experienced a plunge in business during Q1 2020. And Q2 will likely show that consumers who were sheltering in place weren’t much interested in buying vehicles. As we begin to reopen the economy, some automotive groups are recalling furloughed workers. And some parts of the industry are showing signs of life.

New Consumer Interest in Vehicle Ownership

After several years of embracing public transportation and ride-sharing options, consumers may be changing their minds about not owning personal vehicles. Riding on a subway could expose us to a high viral load. We don’t know if the people standing next to us are asymptomatic carriers of the coronavirus. Similarly, we can’t be sure if the ride-sharing vehicle we’re about to enter has been disinfected. Ford chief Jim Farley says, “This pandemic could affect how customers live and work for many years to come, with zero-touch now as an integral part of their lives.” With so many consumers also wanting to take those old-school Sunday drives to get out of the house, a personal vehicle seems much more appealing as a safe travel option.

Financing Promotions

While automakers are shifting strategies about the kinds of vehicles they’ll be rolling out in the long term — fewer ridesharing options and more personal options — they’re enticing consumers with short-term promotions. Several companies are currently offering 90-day payment deferrals, loyalty cash and remote purchase options.

Luxury Segment

While financing promotions appeal to consumers looking at the lower end of the market, industry trackers are also seeing activity in the luxury segment. According to Cars​.com data reported on Mediaradar​.com, consumers have started searching for luxury brands. Searches in the past couple of weeks for cars that cost over $30,000 is much higher than normal. In addition, Alex Vetter, CEO of Cars​.com says, “We’re seeing that 20% of the people who don’t own a car are now considering buying one.” These consumers may still have jobs and are looking for safe ways to travel in the coming months. Also, analysts note that while luxury auto makers only cut ad spending by 16% between March and April, mass auto makers reduced it by 30%.

Automotive Industry Recovery

Luxury auto buyers may be returning to the market already. And, as consumers get called back to work, they’ll be rethinking the daily commute and personal safety. Auto makers that craft the right marketing messages can start to grow sales again. To learn more about consumers who purchase luxury automobiles, check out the AudienceSCAN profile available at AdMall from Salesfuel.

automotive industry recovery, Is the Automotive Industry Recovery Under Way?
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.
May 21, 2020 Media + Marketing