Today’s automotive industry is at a unique crossroads, marked by rapid technological advancements, shifting consumer preferences and unprecedented global challenges.
Amidst the electric vehicle revolution, increasing environmental regulations and the lingering economic impacts, car manufacturers and dealers face a landscape brimming with both opportunities and obstacles.
To help combat all of this, effective and innovative marketing strategies are more crucial than ever. This article explores a few aspects of the auto industry and underscores the need for a marketing overhaul to navigate and thrive in this dynamic environment.
It’s About the Economy
The current automotive shopper environment is characterized by a complex interplay of factors that are reshaping consumer behavior and market dynamics. Inventory levels have started to rebound, recovering from the supply chain disruptions and semiconductor shortages. Vehicle scarcity contributed to rising costs leading to average vehicle prices reaching all-time highs.
Compounding the issue, interest rates have been steadily increasing, making financing more expensive and further straining consumers’ budgets. The typical payment grew by 1.8% to $762, and the number of median weeks of income needed to purchase the average new vehicle increased to 37.7 weeks from 37.1 weeks in March 2024.
Consumers are taking additional time with vehicle selection, focusing on options that fit within their shrinking budgets. This includes considering nearly new and off-lease vehicles.
To help overcome these concerns, automotive companies need innovative marketing strategies. Effective marketing efforts can help dealerships highlight available inventory, offer transparent pricing strategies, and provide financing solutions that appeal to cost-conscious shoppers. By leveraging data-driven insights and personalized outreach, marketers can enhance customer experiences and drive sales despite the prevailing economic pressures.
The Growing Influence of Electric Vehicles (EVs)
The EV market is experiencing significant growth, but this year, hybrid vehicles are playing a crucial role in the transition. Year-to-date (YTD) sales of hybrids have surged, reflecting consumer interest in more sustainable options that still offer flexibility. Pure EV inventory levels have increased sharply, with unsold EVs piling up at dealerships. EV prices have dropped by up to 20% due to increased production, but consumers consider the pricing to be relatively high compared to traditional internal combustion engine (ICE) vehicles, with upfront costs typically about $10,000 more.
Automakers have responded to the market shift by scaling back their EV production plans. Companies like Ford, General Motors and Mercedes-Benz have either reduced production or delayed new model launches due to the competitive environment and lower-than-expected demand.
With EVs averaging over 100 days on dealer’s lots, manufacturer incentives for electric vehicles have also increased as automakers aim to boost sales amidst fluctuating demand. OEMs are now offering a variety of financial incentives, including rebates, discounts, and special financing options; this trend is driven by a need to move growing inventories.
Consumers are hesitant to buy EVs primarily due to range anxiety and inadequate infrastructure. Range anxiety — the fear of running out of battery before reaching a charging station — is a significant concern for 58% of potential EV buyers.
Additionally, 49% worry about the low availability of charging stations. The lack of extensive charging infrastructure exacerbates these concerns, making long trips and daily commutes potentially problematic for EV owners. High upfront costs and limited model variety also contribute to consumer reluctance to switch to EVs.
“As the industry inches toward mass consumer adoption, the main roadblocks to getting consumers behind the wheel of an EV are the continued shortage of affordable vehicles, charging concerns and a lack of knowledge regarding the EV ownership proposition, including incentives,” Stewart Stropp, the executive director of EV intelligence at J.D. Power, said in a statement.
Targeted marketing efforts that emphasize advancements in technology, improved infrastructure, new incentives, and total cost of ownership can help alleviate apprehensions and boost EV consideration at the showroom.
Data-Driven Marketing Is Key
The current landscape in automotive marketing presents several key opportunities for growth and optimization. With more consumers conducting online research before making purchasing decisions, effective targeting has become crucial.
Leveraging geo-targeting and keyword strategies can ensure ads reach the most relevant audiences. This is complemented by employing smart cross-channel and cross-platform marketing, which allows for cohesive messaging across various media such as traditional TV, streaming platforms and digital campaigns. This multi-platform approach not only broadens reach but also maintains engagement throughout the sales funnel.
Auditing and refining digital campaigns are essential for maximizing ROI. Regular analyses of ad performance and consumer behavior data help in optimizing strategies for better results. Additionally, the implementation of sales-based attribution models enables marketers to link marketing efforts directly to sales outcomes, enhancing campaign effectiveness.
By focusing on these areas, automotive marketers can better navigate the competitive environment by; better reaching an in-market consumer, and educating an information-hungry audience, engaging highly qualified shoppers and ultimately driving more sales.
More Resources for Your Auto Marketing
With this intel in hand, you should walk away with strategies to power your auto marketing efforts for the rest of the year based on shifting market forces and consumer behavior.
Check out these guides for more tips:
- Automotive Marketing Strategies for the Cookieless Future
- How Automotive Companies Can Improve Brand Loyalty With Different Generations
- OfferIQ®: The Missing Link to Supercharge Automotive Video Marketing Success
- The Automotive Purchase Funnel Reconsidered: The Stemless Martini Glass
Looking for a partner to help you drive car sales with automotive marketing? Get in touch.
Tony Smihal is a national account director at Goodway Group. He has over 15 years of experience identifying new partnership opportunities and developing strategic plans to help clients achieve goals. Tony’s expertise in the automotive industry gives him unique and valuable insights on how to maximize automotive brand exposure through comprehensive omnichannel marketing.