Upcoming Auto Industry Share War Means More Advertising

The earthquake disaster in Japan had profound effects on the U.S. auto industry earlier this year. But inventory levels are expected to return to normal this fall. This shift back to normalcy may also generate increased advertising as dealers will need to promote  fresh inventory and position themselves favorably against the competition.

Amy Wilson and Donna Harris, writing for Auto News, point out that several factors will converge to boost auto dealer ad spending. First, inventory levels will stabilize as shortages of Japanese vehicles and parts end. Also, new vehicle models will be delivered to dealerships. In addition,  dealerships and manufacturers that reduced marketing expenditures earlier this year need to meet sales target and will roll out more advertising to do so.

Look for Japanese auto companies to roar back into the market. Following the disaster, their share of the U.S. market dropped 6.7 points. And their loss was a big gain for Chrysler, Ford, GM and Hyundia-​Kai. The industry in general, experienced sales rates in May and June that would translate to an annual total of 12 million units. The December pace may be closer to 14 million annual units.

For the most part, manufacturers will be promoting cash rebates and incentives. Analysts believe that many incentives will be advertised as year-​end clearance offers. Providers of both traditional and new media should benefit as auto makers and dealers boost advertising for the rest of the year.

[Source: Wilson, Amy and Harris, Donna. The coming year-​end share war. Autonews​.com. 1 Aug. 2011. Web. 22 Aug. 2011] 
Kathy Crosett
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.