In Tomorrow's Market, Confidence Will Be Only a Starting Point
By Michelle Krebs January 7, 2009By Dale Buss
Americans will reenter the car market in significantly higher numbers if and when a certain measure of confidence has returned to their financial outlook.
But that will create only the potential for a revitalization in auto sales. It will be up to carmakers to figure out how to tap effectively into a consumer psyche that likely will emerge as one very different from how Americans have operated in the marketplace for the last several years.
For one thing, some marketing experts suggested, automakers can forget about turning the sales spigot on and off with mere incentive programs as they have in the recent past.
"In this new environment, consumers are learning that we can always get something for much less," said John Grace, a branding expert and president of Brand Taxi LLC. "And it's going to be years before we work our way out of that mentality. It will become a badge of identity that you got something major like a car for half-price."
Concomitantly, consumers could demonstrate a desire for more simplicity and less flash in the autos they do buy. "There will be more of a focus on quality and practicality," suggested Lincoln Merrihew, senior vice president of automotive for TNS, a Boston-based consulting firm. "Even if they can afford the car, consumers may not want to flash it.
"You may see more subdued colors, less chrome, a change in ad tactics: 'A smart car for these tough times' and 'built for the long haul.'" Merrihew also predicted that automakers and dealers would boost free service options -- "anything," he said, "that makes consumers more at ease and entirely eliminates possible costs down the road."
Grace also foresees the necessity for auto brands to become "totally transparent and honest about what they do and how they perform and what they provide." Cynicism exacerbated by developments last year including the election cycle and the federal bailouts will demand this approach, he said.
So, for example, instead of just boasting in an advertisement that a car is faster zero to 60 than a couple of competitors, Grace said, automakers may have to start "also saying that our car is slower than three others in the class."
On the flip side, the branding guru said, consumers' intensifying demands for more information about potential big purchases "will create huge opportunities for places like Consumer Reports and Edmunds.com, parent of AutoObserver.com, because consumers will read more of those things than they have in the past."
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