Auto industry stuck in neutral but ad dollars revving for return
Advertising departments should keep abreast of auto industry trends to capitalize financially on what promises to be “an exciting decade” for car manufacturers and distributors, Canada’s leading automotive industry analyst told members of the Canadian Newspaper Association.
According to Dennis DesRosiers, the Big Three North American automakers are preparing to reinvest in their products, meaning consumers can expect many new Ford, GM and Chrysler models to hit the roads in the coming years.
Dennis DesRosiers, Canada’s leading automotive industry analyst, says the next decade will be the most exciting in the auto industry since the 1960s, which bodes well for newspaper ad revenues. Photo by Priscilla Schneidersmann
“The launch of every new model comes with a media blitz,” said DesRosiers, explaining how newspapers stand to profit from this trend given most media outlets rely on dealers and manufacturers for much of their ad revenue.
Couple these findings with the fact most Canadian car consumers say their choice in car is influenced by reviews and ads in daily newspapers, and you have an optimistic outlook for automotive ad revenues.
“At a time when advertisers are focusing on new media, we really do believe it’s important for them to keep newspapers in mind,” said Aurelio Diluciano of Millward Brown, a large market research company.
When it comes to advertisements for the automotive industry, “newspapers do enjoy the second-highest level of recall (among readers or viewers) of all the medias that we track,” said Diluciano.
“When someone is close to purchasing a vehicle, newspapers become the most important.”
With this in mind, DesRosiers urged newspaper ad departments to keep abreast of what’s happening in the auto industry to better plan marketing strategies.
But what exactly is going on in the Canadian automotive industry?
Last year, some 1.65 million Canadians purchased a new car while 2.6 million others purchased a used vehicle.
More than half of all purchases were small, entry-level vehicles, with the sharpest sales increases occurring in the same months as the highest gas prices.
“Consumers must be really bummed when the gas price goes up. They must go home and say: ‘Honey, we gotta get one of those small entry-level cars,’” joked DesRosiers.
Roughly 12 per cent of Canadians purchased large, luxury or sports cars — a small but growing market that owes its success to the long-term strength of the Canadian economy.
Important to note is the sharp decline, or “collapse” as DesRosiers describes it, of the mid-sized sedan market, from 40 per cent in 1997 to 24 per cent in 2007.
DesRosiers also said that while the Big Three American manufacturers have been surpassed by import nameplates as the preferred brands of Canadian consumers, this trend might soon be reversed.
The rejuvenated Chrysler marque saw a 12 per cent increase in Canadian sales in 2007 while the embattled Ford Motor Company saw a 4.9 per cent increase the same year.
Compare that with a 4.5 per cent increase among foreign imports, and it would appear the troubles of these automakers may soon appear as but a blip in the rear-view mirror.
