Vehicle marketing trends in the face of declining sales

In a third successive year of declining sales as a result of a weak economy and burgeoning interest rates, SA’s automotive industry is facing a tough time. Domestic passenger vehicle sales are predicted to drop 9% to 10% this year.  What are major vehicle brands doing to counteract the trend? We asked two companies for their views.

“During difficult times, customers tend to resort to brands they are able to rely on,” says Mercedes-Benz Cars’ marketing director Selvin Govender. They look for brands that offer competitive residual values – particularly in a depressed market – as well as technical and safety innovations, improvements in vehicle performance and energy-saving measures, he says.

The luxury segment is one that could logically be expected to experience a dent as a result of increased pressure on consumers’ pockets. Mercedes-Benz has worked to offset the decline by shifting its marketing focus to ensure that it remains customer-centric and its products add value.

“We listen to the needs of the customer and tailor products and services to these needs. Our latest Agility finance product, for instance, has recorded a significant increase in finance penetration over the past two years,” he says. The Agility programme offers consumers a lower monthly repayment due to a flexible deposit and a guaranteed future value on the vehicle.

Carla Wentzel, Volkswagen SA GM of sales and marketing for passenger vehicles, says a focus on build quality and product intrinsics enables the brand to remain competitive across all segments, as do strong resale value and total cost of ownership.

With the fight for market share set to intensify across all segments, she says, manufacturers are likely to place strong focus on retail-driven as opposed to brand-building advertising. VW uses 360-degree marketing initiatives to appeal to various sectors of the market and ensure that all channels are utilised to drive the best return. “We will continue with both [retail-driven] and brand-building advertising, while using traditional channels such as television and targeted magazines to increase our presence in the digital space.”

Vehicle brands are going to have to keep adjusting their marketing approach to take current economic conditions into consideration. “The present outlook indicates that the market will readjust to this lower level for the next two years or so and then show gradual improvement, but no dramatic growth,” says Wentzel.

The big take-out: With a depressed automotive market, car brands will have to prioritise customer-centricity and will need to tailor products and services to meet customer needs.