The automotive industry is in a state of flux, challenged by both internal and external factors. As a result, brands and retailers have been met with unprecedented challenges when looking to reach, and convince, consumers to purchase a vehicle in the short term. Furthermore, those still in the market for a vehicle may be met with further barriers related to availability – pushing them to consider postponing their purchasing plans or opting into other offerings.
This ultimately raises the question of how brands and retailers can reach consumers while the sands continue to shift. Here are three ways auto brands can resonate with consumers:
1. Go beyond vehicle offerings to improve perceptions
Brands and retailers must go beyond the vehicle to improve perceptions. In September 2023, United Auto Workers union members at Ford, General Motors, and Stellantis began their strike. While this is likely to have negative implications related to the affordability of new and used vehicles, it may push consumers away from considering these brands; as over a third (37%) indicate that bad publicity or unethical practices would make them avoid a brand. As consumers take a holistic view of the brands they are considering, it will be critical for automakers to ensure that they are addressing the issues consumers care about – beyond their vehicle offerings.
2. Generate short-term sales through targeted marketing
The majority (67%) of consumers plan to purchase a vehicle within the next three years. However, only a third of consumers are interested in purchasing within the next year. When looking to navigate the current market and generate sales in the short term, brands and retailers should look to deploy targeted marketing efforts to reach those most interested in purchasing currently – such as multicultural and younger consumers.
Despite near-historically high prices consumers face in today’s automotive market, brands and retailers must continue to find ways to establish perceptions of value in an effort to drive interest and appeal among these consumer segments. This can take the form of highlighting warranty coverages, flexible financing options, or promotions.
3. Empower consumers to do their own research
As the majority of consumers do a degree of research online, brands and retailers have an opportunity to leverage emerging technologies such as artificial intelligence (AI), augmented reality, and virtual reality to assist consumers in their vehicle research. AI has the power to extend reach among consumers, providing them with on-demand access to a wealth of information in a low-pressure environment. This integration could also provide them with a highly personalized experience, providing suggestions based on their budget, needs, and preferences. While consumers still call for some in-person experiences, augmented and virtual reality technologies may help further bridge the gap for consumers during the research process – especially if the specific vehicle they want isn’t on the lot.
What we think
The auto industry may continue to stumble before fully recovering as negative internal and external factors continue to impact the market. It will remain a challenge to convince consumers to purchase a vehicle in the current environment unless they are in immediate need of a vehicle. When highlighting offerings, brands must focus on aspects of availability and affordability to those still listening, while also finding ways to reach them where they are by leveraging emerging technologies.
Moving forward, building brand perceptions beyond the vehicle will be more important, showing measurable impacts as consumers become increasingly conscious of what they buy and who they buy from – especially when making larger investments, such as a car.
Are you interested in learning more about Mintel’s consumer data on the auto industry? Reach out today and someone will be in touch!