Marketing (Used) Cars in 2017
The markets may not be eating the auto industry’s dust as far as new car sales go in 2017, but President-elect Donald J. Trump may have introduced more certainty into forecasts with the promise to rollback environmental regulation, according to at least one industry analyst. Time will tell if fossil-fuel using vehicles reverse the trend toward cleantech that benefitted companies like Tesla in Q3 over “the entire U.S. oil industry” in 2016, according to Electrek.
Americans will buy about 17 million new cars in 2017, but will purchase more than 40 million used vehicles, keeping auto sales steady for the third year in a row, says Steven Szakaly, chief economist of the National Automobile Dealers Association in an article published Tuesday by Automotive News.
“He said potential deregulation under the Trump administration could benefit the general economy and that any easing in future vehicle fuel economy standards could help the auto industry,” writes Jesse Snyder. “But he has concerns about rising interest rates, lengthening auto loan terms and higher vehicle prices adversely affecting auto sales.”
What Fred Lambert wrote for Electrek on Nov. 10, though, suggests a U-turn to higher gasoline sales may not be on the horizon. (Or of fossil fuels, in general.)
“While Trump’s deregulation of the oil and gas industry could certainly recreate jobs,” he writes, “we have to keep in mind that more investments don’t represent a guarantee that the companies will be able to handle price slumps like the one we saw last year, and continues now, without more government subsidies. Coal and natural gas are rapidly becoming less cost competitive to wind and solar power.”
Now What, Auto Marketers?
With that economic outlook in the back of their minds, auto marketers can steal smart from eMarketer’s research in the sector.
Globally, automotive marketers are sticking with traditional channels, says the Sept. 8 article titled “Industries Shift Spending to Digital Around the World.”
At the same time, Harley-Davidson’s New York City division is using lookalike modeling of its best motorcycle customers to create 40 percent of its e-commerce sales, reads an Oct. 26 post.
“Half of our leads now come from lookalike models,” Harley’s Asaf Jacobi tells eMarketer.
If some auto marketers do need to tighten belts as European auto manufacturers have done after Brexit, they may want to follow the lead of migrating more marketing to digital channels, says Jon Davie, chief executive of digital marketing firm Zone, according to the Sept. 8 eMarketer story.
“[Davie] told U.K. ad trade publication The Drum in June 2016 that Brexit could ‘accelerate the move toward digital in the medium term toward more accountable marketing expenditure. ... The digital sector didn’t really suffer the same dramatic impact as traditional media did after the financial crisis. I suspect the same will be true for us this time around.’ ”
Perhaps only the auto manufacturers, though, know what their marketing budgets can handle. According to Electrek, Ford and GM are cutting U.S. jobs. According to the New York Times, Ford is replacing jobs it’s moving to Mexico for light car manufacturing with truck- and SUV-building jobs in the States.
“G.M. is investing $5 billion to upgrade its plants in Mexico,” reports the Times on Oct. 18. “Toyota, Volkswagen, Honda and BMW are all adding jobs and new products at their Mexican facilities. And as with Ford, any manufacturing those companies keep in the United States will probably involve more expensive vehicles whose profit margins justify the higher labor costs of building them.”
What do you think, automotive marketers?
Please respond in the comments section below.