The new vehicle market has been showing a steady decline over the past three years, and sales in 2016 reached a record low. There are a number of reasons why the market finds itself in this challenging position, not least the fact that consumers are faced with the double whammy of increased interest rates and higher prices. Redzone spoke to executive business director for the Toyota SA account at FCB Jo’burg, Reagan Kok, about how this decline has affected advertising in this space.

Kok reports that not only did the automotive market continue to shrink during 2016, it also became extremely competitive. “We’ve seen various strategies by different automotive brands over this time, based on the decline,” he says, adding that the greatest shift has been towards using international advertising. He says this is sometimes adapted, although often not, in a bid to save on production costs. There’s also a new focus when it comes to strategies, he says. Some brands pick a hero model and focus on that, while others have picked up the trend away from sedans towards smaller SUVs – a focus that he believes will continue during 2017.

For consumers in this market, top of mind when it comes to cars is value and quality. Consumers are holding on to their cars for longer before replacing them – which means that brands delivering on durability are an attractive option. People also want to feel supported by the brand they have chosen, and many brands have aggressively pursued this need in order to move their stock. 

“Value and quality have been at the heart of most of Toyota’s strategies, but we have now taken a more aggressive approach to ensure that we maintain our share of voice,” Kok reports. He says being top of mind is critical at times like this so that your brand is the first one consumer’s think of when looking to replace their vehicles. FCB, he adds, constantly examines the split between traditional and digital media to ensure reach within the desired target market for each model, as well as the split between media spend and production spend to keep production costs as low as possible, without compromising on quality.

Kok believes 2017 will be no better than 2016 for automotive brands – this will be yet another challenging year, with aggressive competition in the market and key players doing whatever they can to move stock. Exchange rates may have a role to play once again, particularly if global markets continue to react to SA’s political environment.

However, people will always need to buy cars – even if they don’t replace them as quickly as they have in the past. Every vehicle brand in SA is talking about the millennial market; this is the largest growth market and penetration into this market is critical to the success or failure of car brands, says Kok. “The biggest opportunity here is being relevant, with localised work that resonates with the market you’re planning to attract. Doing things differently to stand out also won’t hurt.”

The big take-out: Vehicle brands have suffered a market decline over the past three years and 2017 looks to be no different. FCB’s Reagan Kok believes the key is providing quality and value for car owners, as well being relevant within the desired market, with a key focus on the millennial market.

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