Marketing Forecast from Ad-ology

The earthquake disaster in Japan had profound effects on the U.S. auto industry earlier this year. But inventory levels are expected to return to normal this fall. This shift back to normalcy may also generate increased advertising as dealers will need to promote fresh inventory and position themselves favorably against the competition.

U.S. manufacturers have had a tough time competing in the subcompact car market. For the most part, major U.S. firms have struggled to build these cars with more expensive labor and production costs than their competitors. Some U.S. companies have tried to reduce costs by moving manufacturing to lower cost regions such as Mexico. But this year, Chevrolet plans to level the playing field in the subcompact car market with a new strategy.

One in four American drivers could not pay for a car repair of $2,000 if faced with one today, according to the results of a survey released by AAA. The survey also found one in eight would be unable to pay for a repair bill of $1,000. More than half of American drivers also said they are holding onto their older vehicle because they do not want the financial burden of a new one.

Earlier this month, I highlighted research showing the rise in consumer intent to purchase new vehicles (Ad-ology Research) and growth in ad campaigns by auto marketers (Borrell Associates). Automakers are taking no chances with their marketing strategy and are increasingly returning to sports sponsorships. This week brought news that luxury automakers are again sponsoring golfing events.

Auto dealers enjoyed strong sales in 2010 and several surveys have found that consumer intent to purchase an auto in 2011 is rising. To fuel these higher sales, manufacturers and dealers are putting money into new ad campaigns. Some research shops report that dealers are being particularly aggressive about the resources they’re putting into online advertising this year.

The July Ad-ology Marketing Forecast includes exclusive data on used car buyers, plus smartphones+online marketing and trends in fast casual promotions. The Ad-ology Marketing Forecast video briefing is designed for strategic marketers: Ad agencies, in-house marketers, media buyers+sellers, business owners. Every month it features industry forecasts and trends from a variety of top sources, plus exclusive data from Ad-ology Research.