Automotive: Driving a hard bargain

Forced into discounts, carmakers are trying to build brands.

Forced into discounts, carmakers are trying to build brands.

Christmas came in June this year for people thinking about buying a new car or truck. General Motors played Santa by extending its employee discount program to anyone who wanted to buy a GM product. While competitors scoffed, America went shopping.

GM's sales for June, once the discounts had kicked in, were 46.9% higher than sales for the previous June. Its market share jumped 6.9% to 32.8%.

Flush with success, GM extended its program into this month, and major rivals Ford and Chrysler were forced to introduce similar programs.

This discount-happy automotive market has consumers expecting deals when they shop for cars and light trucks.

"Everyone is in the incentive game," says Steve Harris, former head of GM communications and now chief communications officer with Clear!Blue, a Detroit-area agency that does work for Chrysler. "Customers know that there's cash to be had, and that's a reality that's going to be there for the rest of time."

Automakers have to talk about price, but they also want to go beyond that to remind consumers what their brands stand for. They are convinced that it will be strong brand identity that keeps customers for the long term. And once GM, for one, has cleared its backlog of older models from the showrooms, it has said it will not discount its new ones - although most of them recently have been repriced at a lower price point before even going on sale.

PR is being used to highlight brand attributes and to show how new models fit into brand strategy and positioning.

"We try to look for ways to creatively and effectively spotlight product benefits," says Gary Grates, former head of GM's North American communications and now a communications consultant to GM.

Focusing on value

Industry efforts range from GM trying to redefine brands, such as Buick and Pontiac, to healthier rivals like Toyota and Honda reminding people what they stand for and why their cars are worth more than rival products.

"We focus on the product, and the features of the product, and it works for us," says Joe Tetherow, Toyota's national field communications manager.

Toyota has sent its Tacoma pickup on an action sports tour, showing the truck to media and consumers a few days before the action events, explains Art Garner, a GolinHarris SVP in LA who works on the Toyota account.

Nissan also has been showing its trucks in venues that fit with its identity. From February through April, it held off-roading events for media to try a new model of its Xterra SUV, says Dean Case, Nissan North America product PR manager. It's had its newly redesigned Frontier pickup at beach volleyball and motorcycling events.

Nissan has reached beyond the traditional auto press - inviting editors of gaming titles to drive Nissans featured in popular racing game Gran Turismo. "The reaction from gaming outlets has been high," Case says.

Honda wants to be the car that consumers equate with safety and environmental issues, so its PR focuses on those topics. It recently held a press conference in Washington, DC, to announce it would begin putting crash-test results on car window stickers, says Andy Boyd, PR manager for Honda America.

In California, it searched for a family to be the first to lease a hydrogen-powered, zero-emissions Honda, and then held a news conference to announce its choice. Coverage from such places as noted that Honda's FCX is the only zero-emission, fuel cell car certified by the US Environmental Protection Agency and California regulators for daily use.

Hyundai has emphasized reliability, offering a 10-year warranty, but has also tried to reach out to niche markets for its products. Next month, it will hold its third annual event featuring its Tiberon sports car and tuners - people who customize their Tiberons in wild and unusual ways. "It appeals to the Fast and the Furious culture," says Curt McAllister, a VP with John Bailey & Associates, one of Hyundai's PR agencies.

Some manufacturers are focusing on particular models, expecting them to have a halo effect on their brands.

"Part of the objective is to maintain a level of interest so you don't fall off everyone's consideration list," explains Jay Amestoy, VP, public and government affairs, with Mazda USA. "The market is primed for fresh, new stuff."

Mazda has a new Miata and has sent it on its "Hot Streak Tour," visiting nine cities where it was shown on the back of fire trucks, as it had been in New York during the auto show earlier this year. Mazda called on Miata owner clubs to come out for the showings and set up parades in some locales, Amestoy says.

DaimlerChrysler's Chrysler division has been playing to its strengths by getting attention for its fabled Hemi engine. It sponsored a contest in February, "What Can You Hemi?" asking people to design things powered by a Hemi. The winner, announced in mid-June, was a Hemi-powered tricycle. Chrysler built the five finalist entries and showed them off to the media.

As engines go, the Hemi isn't much different than other large engines, but it has a consumer mystique and it is a unique Chrysler offering, notes Mike Hudson, consumer advice editor with, an auto website.

As far as Ford is concerned, however, Hudson thinks that it has a hit in its new Mustang, but its other offerings are lackluster, and its sub-brands, Mercury and Lincoln, have lost their way.

When Ford rolled out its family discount program at the start of this month, it strove to remind people that they were being treated as part of the Ford family, which still includes a Ford running the company, says David Reuter, public affairs manager for the brand.

In its ad and other communications efforts, Ford is working to drive people to its website, convinced that it's where consumers make their car-buying decisions. Ford research has found that 84% of shoppers who go to Ford dealers have already visited the Ford website. "It's the front line from a purely information standpoint," Reuter says of the web.

Ford will evaluate its discounts on a month-to-month basis. Meanwhile, PR has geared up for Ford's new model launches in the fall that include the midsize Ford Fusion, the Mercury Milan, and Mercury Zephyr, Reuter says.

GM's aspirations

At GM, Mark LaNeve, North America VP, vehicle sales, service, and marketing, spoke with thousands of dealers and roughly 300 media in a six-week period this summer, talking about where GM wants to be.

"Your brand identity is largely a result of your design equity, and a distinct design," he says.

GM has revived Cadillac with distinct designs and wants to do that for Buick, Pontiac, and Saab, he says. LaNeve was GM at Cadillac during its turnaround; his success there is credited with getting him the top marketing spot at GM North America.

As GM rolls out new models like its Pontiac Solstice in the fall, its messaging will focus on the value GM cars give consumers, LaNeve says. "The line between marketing and PR doesn't exist at GM; it's all a communications effort in the end," he says. "We're doing a lot more integration."

As part of this, GM is using product placement - to mixed results. It put the Solstice on The Apprentice last season, and "it was like a 40-minute commercial," he glows. Putting GMC vehicles on CSI has led to real-world police crime labs buying the vehicles. Giving away Pontiac G6s on Oprah, however, raised expectations for sales of that model too high, he says.

LaNeve sees fall launches for GM "going a long way to re-establish brand identities." Mark Hass, CEO of MS&L, a GM agency, agrees, saying "in GM's case, they're really going to have the product."

It'd better hope so. Discounting can only move product for so long, especially when competitors keep coming out with new products of their own. Brands have to establish and live up to distinct identities to get consumer attention in today's crowded - and discounted - auto market.

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