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For luxury car buyers, Christmas is the most wonderful time of the year — to gift a beautiful car. Many car dealers find that December is a banner month for gifting cars, especially high-end models. However, as auto manufacturers start to embrace digital advertising more readily, holiday marketing campaigns could be an opportunity to reach a wider range of consumers.
Are Consumers Actually Buying Cars As Gifts During The Holidays?
Yes, people are actually gifting cars at Christmas, particularly luxury cars. “Luxury sales throughout the year make up 12 to 13% of total vehicle sales, but around December that rises to 16%,” said Thomas King, Senior Vice President of the Data & Analytics Division at J.D. Power. According to the The New York Times, “[December] has been the best sales month for Mercedes, Lexus, BMW and Lincoln for three years running, and one of the best for Cadillac and Jaguar, according to CarSalesBase.com. December sales of those six luxury marques made up as much as 14% of each brand’s annual sales.”
However, there are a lot of other reasons people buy cars in December that just happen to coincide with Christmas. Holiday promotional sales, lease turnover – particularly with luxury brands – and a little extra hustle from dealers who likely have incentives are all contributing factors to the uptick in car sales at the end of the year. “Then, of course, you also have the question of wouldn’t it be nice to receive a new vehicle for Christmas,” said King. Adding, “Pull that altogether and what you get is a very busy holiday season.”
Online Car Shopping Slows Down At The Holidays, But Manufacturers Still Spend On Digital Ads
On-lot sales at dealerships that move out last year’s car models to make room for new inventory are another major reason for December car sales. Because of this influx of dealership activity, action on consumer car shopping websites goes down in December. Most car buyers have already done their research online by December and then go to dealers to take advantage of year-end sales. Regardless, manufacturers still make year-end pushes on consumer car shopping sites and across digital media, hoping to get one last shot at interested eyeballs.
Car Manufacturers Target Buyers Through TV Advertising
Car companies spend a lot of their advertising budgets on TV spots. In fact, 54.4% of total auto ad spend was directed toward TV advertising in 2018, which is quite a bit higher than the global average of 32.9% across all advertising categories. Conversely, car companies only spend 22.9% on digital advertising worldwide, compared to 40.6% across other categories. Car manufacturers enjoy television advertising because of its ability to convey emotional brand images. Certainly, during the holidays, car ads tug at consumer heartstrings with joyful commercials of snowy lodges stocked with luxury cars, and big-bow topped Lexus SUVs.
Car Companies Have Integrated Digital Engagement Into Holiday Campaigns
However, car companies are beginning to embrace digital advertising more fully, with the digital ad spend for car companies expected to grow to more than 24% of their total advertising spend worldwide. In the U.S., digital advertising from car companies accounts for 12.6% of all digital ad spending, second only to retail. When trying to reach younger consumers, some of whom are being lured away from car buying by subscriptions and car shares, a move into digital may be the right direction for car companies to engage in a very targeted and personalized manner.
Recently, many car brands have integrated hashtags and social media strategies into their popular holiday marketing campaigns, likely hoping to engage consumers who crave connections with brands before buying. Shoppers are already in the mood to buy – and connect – at Christmas, and car companies can effectively target those customers with the right kinds of digital engagement.