No surprise today that GM and Ford followed Hyundai's Assurance program by making payments for new car buyers who may lose their job within 12 or 24 months of purchase. The one big difference is that Hyundai's program lets you return the car to the manufacturer without impacting your credit rating. Fortunately for Hyundai no one has had to use the program yet.
GM even created a whole new website for their campaign - GM Total Confidence. I'm really holding back on ripping on the 'total confidence' language from the company suffering a major lack of confidence, because I really like GM.
Ford did their own site too; though, the Ford Advantage Plan doesn't have the same absurd appeal of the GM program name.
BMW’s new Z4 iPhone application An Expression of Joy is definitely an expression. A joy? There are some moments. Mostly though the application is BMW speaking to itself, not to us.
The application is a very literal interpretation of the Z4’s campaign that features South-African artist Robin Rhode who used the car as a brush driven across a giant canvas. This was BMW’s role reversal concept where instead of BMW cars becoming art cars painted on by famous artists, the Z4 became the brush that drew the painting. It’s an interesting concept but I think the whole campaign is a bit esoteric, oh wait, that’s right BMWs are German, so maybe that is to be expected.
So taking this esoteric concept to the iPhone is rather boring. Guess what you can do in the application? You can drive a Z4 across a canvas using a gas pedal, brakes, change paint colors on tires, and using the iPhone’s accelerometer you can turn the car to drive around the white canvas. Okay, that was fun for one second.
Users stop using iPhone applications pretty quickly, with only about 1% of downloads resulting in long-term audiences according to Pinch Media. When do they become effective? When they meet the needs of the user. Granted, most branded automotive applications are an extension of the campaign website and that’s all. At least with the Z4 application, you can create art and even save it to your photo gallery on the phone to use as wallpaper (see my example to the right. I'm quite the artist, don't you agree?) After you’ve done that you are very likely to delete it like most iPhone automotive applications.
At least it’s nowhere near as bad as the Kia Soul application that only lets you change the car’s color. You shake your phone and the car changes color. Neato!
The issue with branded iPhone applications is making the applications relevant to the user, not the automotive company. BMW tried with this literal interpretation of their campaign and tried to make it playful and savable for later use through the game, but it really is all about the campaign finding a home on the iPhone and less about BMW finding long-term a home on your iPhone.
I always love hearing case studies. Really. Must be a sickness, but there is something very cool about seeing how effective or ineffective things are within the business world, that’s why I was very intrigued when I received an email from MediaPost featuring an article entitled, Nissan's Agency Details Online Branding Success.
The article discusses some great strides by one of Nissan’s ad agencies, Tequila USA, made with a very limited budget to promote the Nissan Rogue SUV. They went the viral video route along with a video game featured on the Nissan USA website.
Two viral videos were done called “Maze Master” that featured the use of a wooden tilt-board game that was also turned into an online video game.
What’s interesting about the MediaPost article are the success claims by Kristi Vandenbosch, president at Tequila USA. The numbers just don’t ad up.
The campaign's results were so successful they even surprised Vandenbosch, she said. In four weeks, the YouTube videos were viewed more than 200,000 times.
I went on YouTube this afternoon and both videos had about 25,000 views each, putting the combined total 75% less than the claimed 200,000 views. I’m guessing the 200,000 number includes views of the videos on Nissan’s own website which really isn’t that surprising when you consider their web site has traffic going to it from all of their spend on media and search engine optimization.
"Many car dealerships were starting to see waiting lists to buy the car, which they hadn't seen in quite some time," Vandenbosch said.
Really? The sales numbers reflect a pretty steady sales volume for the Nissan Rogue. This is a good thing in a down economy where a lot of products were taking double-digit year-over-year sales hits (the Rogue only had one negative month in November with a –2.8% sales that month.) So, it looks like the car was beating the industry trend, but waiting lists? That’s pretty hard to believe based on the sales numbers and no significant jumps in sales.
Sales numbers not matching up with marketing success claims certainly isn’t news. I remember a good friend of mine at the Michigan MBA program who once told our marketing class that marketers just round to the nearest million. I just wish marketing case studies given at conferences were more reliable with their results. I’m always suspicious just as I was reading the MediaPost article today. Oh well, at least I learned something about Nissan’s marketing efforts with the Rogue and played a decent automotive video game that wasn't your atypical car race game.
The nation’s largest used car dealer, AutoNation, is adopting a Hyundai Assurance like program that alleviates some of the uncertainty people are having about their jobs. Hyundai pioneered a program that would let laid off consumers to return a car back to the manufacturer within the first 12 months of ownership, provided three months of payments were made first and a maximum of $7,500 in losses were covered.
The AutoNation program will do something similar. Under their program, monthly car payments up to $500 will be covered for six months if the buyer becomes unemployed. The buyer must at least make the first three payments; the offer expires within 12 months of purchase, and the insurance only covers up to $3,000 in losses. The other big difference is that the Hyundai program doesn’t hurt one’s credit. The AutoNation program can negatively affect one’s credit if, after six months, the person still cannot make payments.
What’s interesting about all of this is that even used car dealers are realizing the impact the original idea from Hyundai is having on the American psyche. So, why not help used car shoppers by easing their confidence issues?
I’m beginning to wonder if this isn’t the new way to buy any car? Also, the bigger question is does this type of program bring more buyers into market? Or is it just helping usurp buyers from other brands in the existing market? My guess is that it is bringing more buyers into the market, as there are probably a lot of potential sales sitting on the sidelines as people assess how severe the downturn will be.
The good news is that the stock market is thinking it may have hit bottom last week and Ben Bernanke’s recent interview on 60 Minutes gave the nation a relief when he said the recession would end in 2009. All of this is helping to build confidence and programs like Hyundai’s and AutoNations’s are just helping bringing people back into market earlier as they are able to worry less about job security in the near term.
Chevy launched the new Camaro web site today. Unfortunately, the cost cutting at GM is crippling assets as the team had to recycle videos from the upcoming Transformers film so they would have more than one video in their gallery. The one original video for the launch also suffers from some poor computer graphics (CG) development. Too bad, because the Camaros are showing up on the roads here in Michigan and the car looks amazing.
There is also a link called "Global Development" that lets you see where in Japan the body seal testing occurred. What?! Huh? Yes, if you care, you can learn how the car is a global development effort. Seems like an odd thing to share when GM is doing its best to say it is an American car company that needs to be saved. Not that global manufacturing is any secret, it just seems very disconnected to the brand of the Camaro -- a classic American muscle car. I'm just going to assume the inclusion of this content was not strategic, but rather an attempt to get some content added when budget is scarce.
The best part of the site is the well executed Compare page. It gives you a list of various direct and indirect competitors and lets you see how the Camaro is a better choice. Of course, it is your typical compare from an OEM website. So, the 0-60 times compare the Camaro against a model with the less powerful engine (eg BMW 328i instead of the twin-turbo 335i.) Comparison cherry-picking aside, it is well executed and also continues Chevy's tradition of adding credibility to the compares by including the Polk Automotive (third-party) logo.
The biggest gap in the execution is a lack of sharing. There is no way to share photos, tell a friend, all types of content extension are missing from the site, which is very odd for a passion product like Camaro. Though I did, after looking at the site a third time, notice you can share the videos but it is not very intuitive.
Chevrolet Volt is scheduled to launch on 2011, this cool car is able to travel 40 miles on a single charge without using any gasoline or emissions. Chevrolet Volt also has an electric motor powered by a 1.4-liter four-cylinder flex-fuel engine as a backup, this motor will take over when the car goes beyond the 40 mile range.
Chevrolet Volt concept has a sophisticated design, the design and engineering is a result from collaboration between GM designer and GE Plastics. Their technology make the exterior appearance of the Volt become more bold and futuristic. The Interior of this concept car is ergonomic and futuristic.
Kia lanched their new Scion xB and Nissan Cube competitor with a cutesy TV spot -- complete with furry little creatures and a hip-hop dance track. While everyone else is rolling along in their hamster cages, Kia Soul drivers are bouncing along in their shiny metal box.
My apologies to Sting and The Police, but all I can think about watching the new Kia Soul commercial is a line from Synchronicity II:
Packed like lemmings into shiny metal boxes Contestants in a suicidal race...
Catchy Sting lyrics aside, the Soul campaign -- "A New Way to Roll" -- is a nice lighthearted spot that appeals to people who love furry animals and cute babies in ads. The Kia TV ad doesn't go after the mod happy Scion xB consumers who are all about customizing their Scions.
The website takes a more direct shot at the Scion consumers. Included is a Design Your Own Artistic Soul" showroom that let's the user customize their Soul with aftermarket looking wheels, body kits, or steel pedals.
At the Detroit Auto Show in January, I saw how cheap looking this car is making it a tough sale for Kia. The Soul will ultimately be a bargain basement xB or Cube. Though neither the xB or Cube are pricey cars, so it makes you wonder how many shiny metal boxes the market can handle, especially a depressed market? For now, Kia is debuting the Soul with a whimsical, likable TV spot that people are enjoying, provided the comments left on YouTube are representative of the general population's impression of the commercial.
Now that the word bailout has been replaced with the friendlier stimulus word, marketers are ramping up on their messaging to work stimulus into their ads. Hyundai and Volvo are the first automakers to adopt the term.
Volvo is running Tier 2 TV spots for regional dealerships with the language “Stimulate Your Stimulus”. Not sure what that means since no one is really getting a stimulus unless you are AIG or a major financial institution, that issue aside, it does seem like a very weak message. They are also using the phrase in their email marketing efforts.
Hyundai is simply adding some stimulus language within their online media efforts to promote their well-received Assurance program.
Unfortunately, there is a logic issue with the stimulus language for marketing purposes. The stimulus effort is a policy effort to help stave off unemployment and foreclosures. Adding a car payment to one’s financial situation is counterintuitive to the whole concept of a stimulus. Of course, I understand the language in the ads is to promote cost savings by putting money on the hood and reducing financing rates, but with so much contempt for buying big ticket items it seems attaching the word “stimulus” to your message to get people to spend $20,000-$40,000 is not a compatible concept.
I’ve been a big fan of Hyundai’s Assurance program from day one. To me, it was a compelling, unique idea that squarely deals with the elephant in the room – confidence.
The problem with the program is that it will attract copycats which will eventually lessen the benefit for Hyundai as other automakers follow suit. It is a classic temporary first mover advantage, because the concept is easily replicable by competitors. GM is the first to announce their copycat strategy. I’m sure others are not far behind.
Hyundai will eventually stop bucking the trend of drastically down sales, as they are currently acquiring customers from brands currently not doing an assurance program. But once others do the same program, the impact of the program lessens for all brands, since fewer people will defect to competitors for the reason Hyundai is now getting conquests. It no longer becomes a competitive advantage for anyone if all automakers end up doing an assurance insurance.
For example, if Chevrolet is willing to pay my payments, if I'm worried about losing my job and I wanted a Chevrolet to begin with, I won’t consider Hyundai as the only alternative. Eventually the conquests Hyundai is getting today from a very nervous, confidence-stricken auto buyers will decrease the huge boost Hyundai is getting from the assurance program.
The great news is that Hyundai Assurance is working. The bad news is that everyone else in the industry can copy the idea with little effort.
From the Wall Street Journal, Sales of Used Luxury Cars Rise: “Demand for used luxury cars is remarkably strong compared to the wilting new vehicle market. The trends suggest affluent car buyers aren't paralyzed. But they are searching for a new balance between saving money and hanging on to the lifestyle to which they became accustomed in better times.”
So who is pushing certified pre-owned (CPO) in their marketing? BMW, who is mentioned in the article, is running a promotion for 0.9% financing. Lexus is doing a 2.9% promotion n the RX model. Other brands are also providing financing incentives across their CPO fleet.
I did a quick survey to see how the luxury brands promote CPO on their homepages. Of luxury brands in the USA, 77% have CPO links on their main navigation. Some brands make it a bit more difficult to locate pre-owned models. Mercedes-Benz is one who does not include a link to CPO from their main navigation; though, they do promote the content using a link from the main image on the homepage (it’s a simple small-font text link.)
Bentley actually makes the most prominent promotion of their used-vehicle offerings. There are two prominent access points to used car listings. Bentley suffered a new vehicle sales drop of 20% for all of 2008, so moving product, even used is imperative to keep sales going in this economy.
