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Auto Industry in the News

Auto Industry in the News

JPMorgan Study

JPMorgan Study: Consumers Spending Extra Gas Money

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JPMorgan StudyA recent JPMorgan Study revealed that Americans have not been particularly careful with the money they have saved since the major reduction in gas prices. Why? Well, it’s really an interesting phenomenon; something behavioral experts refer to as “mental accounting”. If the average American bought the same number of gallons of the same grade of fuel in the winter of 2014 as they did during the winter of 2013 when fuel prices were higher, they would have saved about $41 per month. Yet when everything was all said and done, the average consumer only saved about $22.

 

What happened?

 

First, Americans are choosing to drive more, because they think they can afford to. Second, many people are opting for SUVs and larger sedans that are much less fuel-efficient than the econoboxes they used to drive. Third, many people are upgrading to a higher-octane fuel, even though it can sometimes be a complete waste of money for the consumer.

 

More About the JP Morgan Study

As the JP Morgan study shows, when gas prices were at their highest, the average American’s monthly spend on gas was about $136. Now that the prices are lower, they are still spending $114. The end result is this: even though the prices have come down by about a third, the actual spending on fuel has declined by only about 16 percent. Many of these consumer decisions are made due to the “mental accounting” we mentioned earlier.

 

What does that term mean? If the consumer has become used to spending the $136 per month and they suddenly find themselves with a full third of that in their pockets, it’s easy to justify spending some of it, even if it’s for something that could be considered frivolous … hence, the term “mental accounting”.

 

A similar phenomenon happened in 2008, when gas prices came down markedly during the economic collapse … and it’s happening again here in 2015. And with prices at the pump projected to remain low for the foreseeable future, we can expect more of the same going forward.

 

JKR Automotive Advertising: We Move Cars.

Motor Trend Awards

Motor Trend Awards Announced for 2015

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Motor Trend AwardsThis year’s Motor Trend Awards have been released, and it’s a really good year for Chevrolet. The brand sporting the bowtie for its logo took home two of the three awards as the major automotive publication announced their favorite car, truck and SUV for 2015.

Winners of Motor Trend Awards

Car of the Year: Chevrolet Camaro

Judges chose the Camaro due to its lighter-weight design, and it’s just in time for its 50th birthday. The Camaro got the nod over finalists Audi TT, BMW 7 Series, Honda Civic, Mazda MX-5 Miata, Mercedes-Benz GT 5, and the hydrogen-powered Toyota Mirai.

 

Truck of the Year: Chevrolet Colorado

Last year’s winner takes home the hardware once again, besting the field for a second straight year. Finalists included the Chevrolet Silverado 1500, GMC Canyon, GMC Sierra 1500, Nissan Titan XD and Toyota Tundra.

 

SUV of the Year: Volvo XC90

The XC90’s new design and plethora of powertrain options made it the winner in a hotly contested field full of worthy candidates. Finalists included the Honda Pilot, Lincoln MKX, Mercedes-Benz GLE-Class, an Nissan Murano.

 

Do you think the Motor Trend Awards went to the correct vehicles?

 

JKR Automotive Advertising: We Move Cars.

 

Advertise On Radio

The Big Boys Advertise on Radio, Too!

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Advertise On RadioThe “big boys” advertise on radio just as the local dealerships do. As our last blog indicated, radio ads are one of JKR’s preferred ways of advertising; and if you read it, you can understand why. Today’s blog offers even further proof that radio is not only alive and well, it is the catalyst behind some tremendous sales numbers at dealerships across this great country of ours.

 

The automotive advertising category is radio advertising’s overall largest, and new numbers from JD Power show that we are on track for our best October in more than a decade. Detractors may say it’s because October is a five-week month this year (and that certainly does make a difference), but September sales weren’t too shabby, either, with more than 1.2 million new vehicles sold.

 

Advertise on Radio, Enjoy Benefits

The data clearly shows that many Tier One automotive advertisers are spending big dollars on radio. For example, Nissan’s Dealer Association has increased their radio spot volume by more than 250 percent over the first nine months of this year. Other major manufacturers spending more money over the first three-quarters of 2015 include Honda (up 43%), Toyota (up 34%) and Chrysler-Dodge Jeep (19%). Even the luxury brands are stepping up their radio game this year, as Lexus, Mercedes-Benz, Acura and others have significantly increased their radio ad spending.

 

You, too, can see higher sales numbers at your dealership, on a local level. Just ask our clients who advertise on radio; they’ll tell you! Once you’ve refined your ad rates, target audience, reach/frequency and creative, you’ll be amazed how quickly your marketing campaigns improve – and you will understand why radio advertising is a great option. To find out more about how we do these things for our clients, give Eric Tigner a call today at (321) 397-0777. JKR offers a free automotive marketing review … let us show you how we’ll improve your marketing campaigns.

 

JKR Automotive Advertising: We Move Cars.

Transactional and Relational Advertising

Transactional and Relational Advertising … You Need Both

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Transactional and Relational AdvertisingDo you know the difference between Transactional Advertising and Relational Advertising? While everything an auto dealer does from an advertising and marketing standpoint is done with the ultimate goal of gaining customers and increasing the bottom line, the way one achieves that goal can vary greatly from dealership to dealership. In case you don’t know the difference between the two, we give you the definition of both terms.

 

Transactional Advertising focuses solely on making a sale as quickly as possible. There must be some kind of short-term benefit in the ad to cause the consumer to buy. In the case of a car dealer, that might be a great sale, a tremendous credit hook, a low down payment, or some other incentive. In short, anything that would bring forth an immediate sale.

 

Meanwhile, Relational Advertising has a completely different goal. Its focus is to create a relationship between dealer and customer, thereby developing brand loyalty. When done effectively, a customer won’t think of going anywhere else but your dealership to purchase their vehicles.

 

So … with that in mind, which of the two is most important? Trick question! You need both to be a highly successful automotive dealership. You want to make as many sales as possible today, but you also need to remember it costs about 10 times as much to get a new customer as it does to retain an old one!

Role Reversal

 

Put yourself in the shoes of a consumer, and it’s very likely you’ll realize you do a great deal of both Transactional and Relational shopping yourself! For some things, you will spend hours looking for a great deal; and when shopping for other items, you’ll immediately head to the one place where you know you’ll be making the purchase. Shopping for a car, though it’s a much more big-ticket item than most, is no different. Some people will shop around for sales or service and buy where they can find the best deal; while others will go directly to “their” dealership (hopefully yours).

 

Let JKR Automotive Advertising help you find the perfect mix of Transactional and Relational Advertising. Give Eric Tigner a call today at (321) 397-0777. For your efforts, you’ll receive a FREE Advertising Review. We’ll take a close look at your media market and your competition, and provide you with a report that will be of great value to you whether or not you ever become a JKR client (but we think you will).

 

JKR Automotive Advertising: We Move Cars

 

High April New Car Sales

Industry Boasts High April New Car Sales; What About You?

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High April New Car SalesThe preliminary numbers are out, and the forecast calls for high April new car sales. According to this article from Automotive News, new vehicle sales in the United States will finish at their highest April level in 10 years. Further, projections show the best four-month start overall since way back in 2001. Major prognosticators speculate a year-over-year increase between 5.2 and 6.1 percent, which would yield a return of about 17 million units, a number not seen since 2001.

Part of the high April new car sales is due directly to increased numbers in the light truck segment. Overall, sales of compact utilities are expected to rise about 11 percent, while sales of midsize utilities should go up 9.6 percent; and full-size pickups are projected to see a 6.3 percent jump. Conversely, midsize cars – usually a strong segment – are projected to fall 3.1 percent.

Of course, the low gas prices are helping persuade people to purchase a larger vehicle … and as long as the prices at the pump stay down, this is good news for auto dealers. Simply put, stronger truck sales mean better profit margins! It’s no wonder that JD Power, the nation’s leading independent research company, estimates that automotive transactions are on pace to set a new April record. Last year’s then-record transaction price was $29,948, while this year’s projection eclipses that number at $30,680.

How Were Your April New Car Sales?

How did your dealership do during April? Did you have big sales numbers? How about high profit margins? The fact is, you can have both; you don’t have to sacrifice one to get the other. There are a number of factors that ultimately determine an auto dealer’s profits, many of which you may not even be considering at the moment. JKR Automotive Advertising can show you what they are, and get you on the right path to success. Take the time to make one simple phone call that will change the direction of your dealership almost overnight. Get the wheels in motion today by calling Eric Tigner at (321) 397-0777.

JKR Automotive Advertising: We Move Cars.

 

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