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Car Sales Climb As Auto Industry Prepares For Strong Rebound

October 6, 2020 Carolyn Harding

The automotive industry has been diligently working to adjust to consumers’ newly formed purchase patterns and priorities as a result of the pandemic. With so many people working from home, facing financial uncertainty and driving far less for leisure activities, earlier this year, automakers faced declined sales. Now, however, the auto industry is preparing for a strong recovery, with many analysts predicting a positive Q4 as lockdown restrictions ease and consumers set their sights on new car purchases. 

“September sales were boosted in part by the Labor Day holiday weekend, when many dealerships offer discounts to lure customers, but the overall performance points to strong underlying demand for new vehicles,” said Thomas King, J.D. Power’s President of Data and Analytics.

New Reports Reveal A Road To Recovery For Many Auto Brands

Shutterstock_1771930034 Young couple in masks selects a new vehicle and consult with a representative of the dealership in the period of the pandemic. Car sales, and life during the pandemic

At the start of the pandemic, new car purchases dropped a drastic 50% year over year (YOY). According to Experian’s recent Q2 2020 State of the Automotive Finance Market report, it wasn’t until June that new car sales began to slowly balance out, showing just a 10% drop in sales. Entering into Q3, as showrooms opened and shoppers became more lenient with their spending habits, automakers began experiencing increased sales. Experian’s report highlighted optimistic trends throughout the auto industry, stating that consumers now view cars as “safe spaces” when comparing the purchase of new vehicles to travel alternatives such as public transportation, flying or services like Uber and Lyft.

According to Elaine Buckberg, GM’s Chief Economist, “The pandemic has also created savings from foregone vacations, entertainment and restaurant meals that some buyers are applying to new car purchases. And some city residents have increased interest in owning a vehicle as some seek to move to the suburbs and others want to escape the city on weekends.”

Additional insights into the automotive industry’s recent sales spike:

  • The Wall Street Journal credits heightened interest in trucks and SUVs, more affordable car payment options and “an increase in urban consumers turning to car ownership” for the auto industry’s recovery.
  • Experian’s report identified full-sized pickups as the most in-demand vehicle, accumulating 16% of sales.
  • While overall sales still remain down YOY, Honda experienced a strong Q3, with sales rising more than 11% in September alone.
  • Subaru experienced a major bounceback, revealing that September 2020 was the brand’s “best September sales in history.”
  • Hyundai saw a 5.4% sales spike YOY in September and reported just a 1% drop overall in Q3. 

“COVID-19 has impacted the [auto] industry, but the data shows manufacturers, dealers and lenders have adjusted to the current landscape,” said Melinda Zabritski, Experian’s Senior Director of Automotive Financial Solutions. “For example, manufacturer incentives have helped new car sales rebound over the past few months. The more the industry can stay on top of the trends, the better positioned they will be to continue to boost sales and navigate the recovery.”

Major Auto Brands Begin Increasing Digital Ad Spend In Light Of Increasing Sales

As the automotive industry sees hope entering into Q4, many big auto brands have revved up their digital marketing efforts in order to reach consumers and capitalize on the current upward trajectory.

Hyundai Invests In Experiential, Pandemic-Friendly Activations

Promoting the new 2021 Elantra, Hyundai launched its latest digital campaign, “Unlock Better.” The auto brand kicked off the new multichannel marketing campaign with strategic ad placements during Sunday Night Football, highlighting Hyundai’s advanced technology in the 2021 Elantra. Next up, the auto brand partnered with LiveXLive for a pandemic-friendly virtual concert series featuring an inside look into the new Elantra leveraging real-time video footage.

Rounding out the campaign, Hyundai promoted an improved shopping experience for consumers with the creation of its new “Showroom Live” feature. Using augmented reality (AR) technology, shoppers can get an up-close view of the 2021 Elantra. Hyundai technology representatives and design experts will be “on-site” and allow consumers to view and customize the vehicles they desire. By expanding its reach with a multichannel media plan, virtual events and an immersive AR experience, Hyundai is positioning itself as a modern-day auto brand that is able to adapt to today’s evolving climate in order to reach potential customers.

Cadillac Taps Celebrity Influencers To Promote New Design & Technology

To introduce the new 2021 Escalade design and technology, Cadillac launched its “Never Stop Arriving” campaign, starring well-known actress Regina King. In addition to a partnership with Twitch for the “60 Second Docs” online series, the Cadillac Escalade campaign includes widespread “ad inserts,” which the auto brand labeled “The Roadblock,” across 1,000 different podcasts. 

According to Cadillac, the Escalade’s latest auto enhancements are reflective of the brand’s ongoing efforts to “regain leadership in the luxury full-size SUV space,” while the Never Stop Arriving campaign, specifically, is part of its attempts to “revamp its marketing strategy and adapt amid evolving market conditions,” noted MarketingDive reporter Tatiana Walk-Morris. Cadillac has launched additional campaigns in order to evolve its digital marketing efforts as of late, recently introducing virtual video sessions with Cadillac officials to give consumers an inside look into the luxury vehicles. According to WARC, the virtual videos service experienced a “50% increase in visitors once the pandemic started.”

Acura’s Multichannel Campaign Reaches Multiple Generations & Demographics 

Acura recently launched a multichannel campaign, “Break the Silence,” to introduce its new 2021 TLX sport sedan. Imitating an old-school silent film, Acura’s ad spots were strategically aired during NBA and NFL games, with the hopes of reaching a massive audience.

Acura included Mandarin, Spanish and Cantonese versions of the ads within its campaign, and according to MarketingDive reporter Robert Williams, is “running takeovers and editorial sponsorships for Hispanic Heritage Month and Latino Voices sections of the Huffington Post, and on Verizon Media's TechCrunch and Yahoo sites.”

“Inside Track” a new AR mobile driving game was also teased in Acura’s Break the Silence announcement. The interactive game will allow consumers to compete with the new Acura TLX in an immersive, multiplayer virtual racing game.

The versatility in Acura’s ad placements and media channels opens the door for the auto brand to expand its reach across age groups and demographics – potentially growing its customer base during a time when sales are crucial for major auto brands.

The automotive industry as a whole has effectively adapted to COVID-19 by offering consumers enticing financial incentives, experiential activations and seamless delivery options. Now, as pent up demand reveals itself throughout the auto industry, manufacturers, brands and marketers must respond to this sales recovery with safe, tech-savvy offerings that reflect the mindsets and demands of today’s consumers.

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About the Author

Carolyn Harding

Carolyn Harding is an Associate Manager of Communications at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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