LIFE AFTER ECO
HOW THE AUTO INDUSTRY WILL COPE AFTER THE COVID-19 GLOBAL PANDEMIC
Once all the lockdowns caused by the COVID-19 global pandemic are lifted, many have come to accept that the world will never be the same again.
As economies of nations around the globe struggle, a cloud of doubt is hanging over the auto industry. Although the figures for the first quarter for car companies have not fallen by much, the second quarter figures is forecasted to be much worse.
What would be the new normal for the auto industry once our own ECQ is lifted?
Until a vaccine or a cure for the virus is found, activities we consider normal will either be highly regulated or even banned both by the government and society in general. Social distancing will dictate much of what kind of strategies car companies will do to recoup the losses they incurred and regain market demand for their vehicles.
Here are some changes we might see in the near future.
Auto Shows
The immediate future of major car shows is a now big question mark. Worldbex Services International announced the postponement of the annual Manila International Auto Show (MIAS) just days prior to the announcement of ECQ. The MIAS is a venue where car brands get to launch the latest car models for the year and it is a great selling event for the brands as well. While car brands seemed to be eagerly awaiting its return, Worldbex has no definite date yet on when it can hold the country’s biggest annual car event, packing over 142,000 visitors last year. If ever there will be held later this year, expect visitor figures to go down significantly since it will be expected to duly comply with social distancing measures. Another popular annual car show the Transport Show scheduled this May will be postponed to July. But its organizer, Tradeshow International added a caveat that if the situation is unfavorable, it will merge the event together with the popular Manila Auto Salon scheduled later part of 2020. The Manila Auto Salon is the go-to event for aftermarket and custom car enthusiast while Transport Show caters to the vintage and classic car aficionados. When these shows resume, expect car and car accessories companies to support them since these events continue to generate a lot of interest.
Since the malls and commercial centers will suffer from weaker foot traffic, we will probably see a number of community-based car events being held in these parking lots. These neighborhood car shows will be organized mostly by car clubs and supported by car brands as well related businesses eager to spruce up their sales and marketing efforts. We will see a number of these events do “swap meets” as well. These swap meets are informal gatherings where participants get to peddle their goods, mostly from the informal market and personal items car geeks have collected over the years and needed to dispose of them. Why? Because they need to raise funds to buy more stuff for their beloved cars. It is also a good side business to be in.
Car launches
There will be a new normal in launching new models for car companies. Marketing campaigns will be tweaked to handle lesser crowds and more intentional target audiences. Because of budget cuts, most likely it will also be less glamorous and offer a lesser degree of oomph and pageantry. But expect these exciting new models still to crowd the market. We also expect more virtual car launches done thru live streaming and on social media, similar to the ad hoc presentations by some brands when the Geneva Motor Show was abruptly cancelled. These so-called virtual car launches will be reinforced with a number of special effects and high production value videos and gimmicky superbowl-like quality viral video ads.
POS and effect – Grab mentality
Because of social distancing, POS (point of sale) efforts will be more challenging for car dealership showrooms. Walk-ins will be much lesser and car brands will resort into offering test drives with “Grab” mentality. Grab has brought to us a whole new world of convenience by bringing foodstuff and other products to our very doorsteps. Why not cars for test drive? Brands like Subaru PH have already begun doing this campaign just before the announcement of ECQ. Another innovative campaign is Subaru’s virtual test drive, which can be done by viewing the brand’s social media site. But knowing the Filipino market where the customer experience has to be real and visceral, I think the former would yield far more sales conversion success.
Mall tours and buying bargains
This practice has been going on for quite some time, so expect this to continue. Even if malls might experience lesser traffic right after lifting of ECQ, it should rebound sooner than later. Expect more aggressive promotions, pricing discounts and freebies from car brands jockeying for sales. Don’t just pull out your checkbook yet. Wait out a few weeks after ECQ and watch out for bargains out there. Sales of pre-owned vehicles will drop so the brand new car market will expect more selling pressure from this sector.