Fewer showrooms, a sleeker brand image than in the past and a larger team to optimally serve all niches of the market. Large dealer groups are gaining ground through smart takeovers and are thus developing into large multi-brand clusters where economies of scale generate turnover and it is easier to market new mobility services.
Volume and professionalization are the magic words in all this. The business must become larger, more professional, more sustainable and less dependent on the economic situation.
The sacred scale to keep the automotive business model future-proof. But what do these increasingly larger dealer holdings actually mean for marketing? Time to take a look at how dealer land is changing at a time when marketing is becoming increasingly important.
Same battery platform
Stellantis, the new automotive giant consisting of Peugeot, Citroën, DS Automobiles, Opel, Fiat and Alfa Romeo, was in the news last week because the group canceled all existing European dealer contracts as of June 1, 2023. The next two years will be used to determine which brand dealers will also receive a dealer contract after this date. According to the group, this is a necessary development because the number of individual brand dealers carrying one or more Stellantis brands is too large to be able to continue in a healthy manner in the future. The higher goal is to be able to implement the scale that the group itself has now achieved at dealer level as well.
Better business, lower costs and an optimal customer experience. A clustering that makes sense, because in the coming years the models of the brands within the group will be produced on the same technical bases, so maintenance and parts supply for models in the same segment will be almost identical. An Alfa will soon be on the same battery platform as an Opel.
Marketing, design, branding and experience will make the difference and appeal to the different target groups.
This ensures that the activities of the different brands can easily take place next to each other. An additional advantage of the exercise is the possibility to take the standards to the next level. In this way, the group will soon offer the customer an even better experience.
As the new season of the Effie Awards, the most prestigious advertising award, kicked off this week, the kick-off session had an interesting story about the importance for brands to keep their digital innovation in order. Brands must start thinking more from brand preference and ensure that customers or prospects no longer search for generic terms such as ‘new car’, but invest in their brand awareness in such a way that consumers search specifically for ‘new Peugeot’ or ‘new Kia’.
Regardless of whether it concerns Voice search, Google search or YouTube search. Higher standards, brand guidelines and sales via large über-professional parties help with brand awareness. Only by taking brand preference seriously in marketing can car parties already attract consumers to their brand at the front of the funnel and thereby immediately eliminate competitors. Marketing 2.0 is therefore also of relevant importance for large dealer groups. This development in consumer media behavior requires dealers to further professionalize their marketing machine, which requires scale (or collectivity).
It is priceless to be able to properly manage the current marketing landscape as an individual village garage.
Once the dealer on the corner could manage with a line between owner and local newspaper, today’s dealer holdings need (inhoused) specialist teams that understand the socials, manage data themselves, optimize it and ensure that search volumes lead to business without exception. Switching to marketing is necessary for this, the manufacturers themselves know that and that is partly why larger and ‘high-tech’ dealers are needed. Parties that continue to invest heavily in digital marketing. Apart from the advantages for marketing, clustering also yields many other gains for the manufacturer.
The corona pandemic has further accelerated the need for efficiency and digitization of the industry. More than ever, the need for an E-business alternative has become topical. Car dealers must be visible via a smartphone or iPad and must be findable on all channels. And that applies to both the car brands carried and to the dealer’s own mobility brand. After all, without a search result there is no reach, there is no interaction and no business is created.
In that context, the manufacturers themselves are increasingly working on awareness and are increasingly leaving the step from lead to sale with the dealer companies themselves.
The dealer has to organize those last phases in the customer journey (digitally and without errors), otherwise it costs sales. The approach of a number of new players on the market is also very interesting. Can a new (Chinese) car brand without any brand recognition succeed in becoming sufficiently visible in a landscape of powerful dealer holdings and media-pumping volume brands that consumers actually come to the brand store in the city center to purchase a car or car subscription? In terms of marketing, this contrarian direction becomes a major challenge even with an army of specialists. Firstly, it takes years for brand recognition to reach the level of the Peugeot 308 or Volkswagen Golf, secondly, with the volume brands you see that the sales and marketing role of a professional dealership is desperately needed to be able to structurally negotiate the deal. Close. Few people order a car without any guidance on a random Monday afternoon.
The purchase of a car or car subscription is usually preceded by a months-long online process, and the seller often still texts intensively in the conversion phase before the car is sold. And all the while, relevant marketing prospects must be optimally kept on board.
People at the center
Back to the starting presentations at the Effie Awards. Another story was about putting people at the center of marketing. A successful marketing funnel must follow the human behavior, this second argument was loosely translated. And that is of course more than true.
Every good marketing campaign is in line with the expectations of the target group.
First of all, there is an awareness process. You should know that a particular car model exists at all. The message, usually broadcast by the manufacturer, should appeal to you, be relevant and present on the media you use. From there, as a consumer, you develop knowledge about the (car) proposition and, if the car brand does well, you also develop a strong brand preference. Only then does the consumer start looking for his or her new car, and the buyer then expects content that informs, inspires and advises. Car brands that optimally organize this together with their dealers, keep the consumer on board. However, setting up this funnel that makes sense for people is a challenge in the current media landscape and requires priority from every dealer management.
Hundreds of solutions have to be optimally managed before the customer signs the order and the entire marketing process requires many more car companies than in the past.
Professional support is therefore necessary and that requires not only economies of scale, but also opportunities to make investments, in-house skills and specific technology. Enough arguments in favor of working with professional parties, because they can (should) take that step in the coming years.
But are there no pitfalls in the search for scale? Sure there are. The advantages of the current development are great. Not only for the manufacturers themselves, but also for the consumer who has less and less time. In that context, shopping a car at a multi-brand dealer under one roof is useful. You don’t have to go through many showrooms, you can see all brands together and certainly if the digital preliminary process is arranged nicely, you also have all the knowledge at hand. In addition, economies of scale and joint components also bring cost benefits. Very welcome to consumers after a time when car prices have risen sharply.
So many advantages, but at the moment the pitfalls are mainly in the after-sales service. For a new car, consumers still want to drive a bit after an online exploration, most people do not leave their village for maintenance. Collection and delivery services or special after-sales outlets can maintain customer satisfaction here. The manufacturers themselves may also have to pay attention to their reorganisations. Aren’t their main dealers getting bigger and more economically powerful than the brands themselves? Large dealer holdings are without exception impressive companies, with many employees, their own dealer brand policy and often a lot of influence in the market. This chemistry results in a different kind of coordination between importer and dealer.
Nevertheless, the trend of working with fewer but larger dealers shows that the advantages for the manufacturer still outweigh the disadvantages. In an age of tech, data and specialisms, only scale can provide returns, better dealer marketing and the best customer experience. And successful marketing simply remains a message that touches people. That scale is therefore absolutely sacred for adequate dealer marketing.
Jos van den Bergh (1973) worked for almost 20 years in various PR & communication positions in the automotive industry and now advises automotive and media parties with his company MediaMondo in the field of marketing communication, PR and media. He is also a dealer marketing advisor to BranchePartners in Houten. For MarketingTribune he critically follows developments in the automotive world. Also need marketing advice? Mail Jos without obligation at firstname.lastname@example.org