Marketing Automotive

Following a marked decline in the second half of 2008 and the first half of 2009, European* new car registrations picked up in the second half of last year, largely due to the impact of fleet renewal schemes in a number of major markets. In total, 14,481,545 new cars were registered in 2009; 1.6% less than in 2008 and 9.5% less than in 2007.

In December 2009, demand for new cars rose by 16.0%, amounting to 1,074,438 units compared to the same month in 2008.

See herewith the official EACA press release of January, 15, 2010

About 10 years ago, General Motors initiated a program to reverse the direction of its market share, which was decreasing sharply.
It set an ambitious goal of 29%, which it had not realized in several years. It started by offering strong discounts to buyers, and it kept the share of market goal in the hearts of employees by issuing gold lapel pins with the numeral 29.

The old GM was buying market share. And it didn’t reach the 29 % target. It came quite close in 2002 with 28,3 %.

But as good as goals may be for keeping people focused on a target, they can also backfire. In this case, General Motors itself seems to regret that it unleashed the incentive wars in the first place. “There’s lots of things I’d like to be a leader in,” says Susan Docherty, GM’s new Vice-President of Sales for North America, “and it certainly isn’t in incentives.” Lowering prices to sell a certain number of cars, she says, took employees’ focus away from profitability, customer service and product quality. “I’m not going to say that that goal was the origin of the entire downfall of GM,” says Lisa Ordonez, management professor at University of Arizona, who studied the case. « But obviously strict adherence to goals can cause these kinds of problems.”

Today GM claims another ambitious goal : « To make, build and sell the world’s best than anybody else ».

What is interesting with such a goal is that if they can do that, the market will grown and will reach high levels by itself and also that the real measure of success will be given by those who have the right do to it : the customers.

Umbrella salesmen do a very good business in Halle. The German city regularly tops the polls as Europe’s wettest city. Good weather for umbrella salesmen used to mean bad weather for those in the convertible car rental business, until now.

In a bid to promote rentals of their convertible car fleet, German car rental firm Sixt decided to bring some much needed sunshine to the soggy citizens of Halle. Using technology pioneered at the Beijing Olympics, the ever present rain clouds were dispersed and Halle’s motorists donned their shades and took to the streets in rented cabriolets.

In a technique called ‘cloud seeding’, silver iodide can be released into cloud formations and cause the clouds to increase precipitation and therefore quickly dissipate. This technique is widely practised to clear foggy skies surrounding airports.

Sixt has a strong track record of innovative campaigns, animated URL bars and ASCII art on google searches. Continuing their style of humorous creatives, this short film presents Lieutenant Colonel Sandro Wolf of Fighter Bomber Wing 37 as a man on a mission against the inclement weather. During July 2009, armed with his missiles of silver iodide, the Lieutenant took to the skies 109 times and dispatched any threatening rain clouds.

Sandro won many fans among the local residents who hailed him as a hero for and credit Sixt for their best July weather ever recorded. The unassuming Sandro is, as ever, philosophical about his work. “What Sixt has done in Halle is amazing,” he muses while smoking a cigarette on the tarmac “and should definitely set and example for others. . . I am honoured to have been a part of it.”

European automakers could suffer sharp declines in domestic sales in 2010, due to the closure of government “cash for clunkers” initiatives. The schemes offered state cash incentives for customers willing to trade in their old cars for a new model.

Car sales have been bolstered by government stimulus initiatives launched in Germany, France and Britain last year.

According to data from EACA (the European Automobile Manufacturers’ Association – www.eaca.be), 15 million vehicles were sold in Europe over January-November 2009, and 17m were sold over 2008.

Unemployment is predicted to remain high across the continent during 2010, while credit-crunched banks are forecast to maintain their restrictions on consumer lending.  This would impact on car loan availability and restrain demand in the property market, holding down house prices and leaving consumers feeling less wealthy.

Nick Reilly, head of General Motors’ European operations, sales in western Europe could be as low as 13m in 2010.  Meanwhile, Ford said sales in the 19 largest European nations would fall from 15.7m in 2009 to 13.5-14.5m.

In Germany, the continent’s largest economy and car market, December car sales dropped to their lowest level for two decades, following the closure of the nation’s scrappage scheme.

Everybody knows that the 2008 world financial crisis has had a very high impact on the car industry.

The American big three (GM, Ford and Chrysler) had to go through incredible difficult times. The first one was saved by the US government and abandoned famous brand names such as Hummer and Saturn.

Ford decided to sell several division to find enough money to save itself and Chrysler forged an alliance with the Italian group FIAT (or should we talk about a take over).

I never owned a Saab but it is with sorrow that I learned the end of its famous story. There are very few car brands originated from small countries left on the market.

What is interesting is to see how the Saab case is an example of why mergers and takeovers can be bad experiences. Before being bought by Ford, Saab made cool, idiosyncratic cars. Different cars compared to the competitors. Not only they were safe, solid, spacious, and ergonomic and enjoyed an image very different from BMW, Mercedes or Volvo.

Often, the SAAB drivers were doctors, architects, and university professors: nice and smart people. GM was simply unable to capitalize on these competitive advantages.

The first decision they took in Detroit was to base the 1990 new SAAB on the 1980 Opel Vectra! After that they stopped to update the car. In fact, GM did the contrary of what VAG group did by hauling AUDI out from the VW’s shadow. The smart SAAB drivers became slowly but surely AUDI drivers.

When finally GM understood the mistake, the SAAB 9-5 was 13 years old. The new 9-X was announced and is still not there. Good and nice concepts were worked out at the Ford-SAAB design centre, but in the meantime the Ford pockets were already empty.

For most of people around the world: Sweden rimes with design and just add to that, the fact that Saab’s Swedish origin had given to the brand a « green halo effect ». Strong points for a 21st century brand name!