Cheap Jacob as a star salesman

Car marketing Because demand is weakening, new cars are currently being sold primarily on price. Customers are happy, dealers less so.2003 was not an exhilarating year for the car industry. Only 27,1541 new cars found a buyer, 8 percent fewer than in the previous year. A small consolation: compared to other European consumers, the Swiss are willing to pay a little more for their vehicles, investing an average of CHF 35,000 in a new car. The winners among the car models last year were the small and the luxury models. Two outsiders made strong inroads: Daihatsu sold 51 percent more cars and the Korean company Kia, which has only been active in Switzerland for ten years, almost 70 percent more. With less than 2000 cars sold, however, this is a comparatively easy success to achieve. With almost 10,000 cars sold, Citroën's result is even more impressive: the French company sold 23 percent more cars. Disappointing, on the other hand, were the high-volume players VW and Opel, as well as Ford and Mercedes: practically all the big players performed worse than average, with sales down by more than 14 percent. Some of the aristocratic luxury brands, on the other hand, were delighted: Lamborghini, for example, achieved its best annual result ever with 1304 cars sold. How much the entire car industry turned over last year has not yet been definitively determined - but one thing is certain: it is likely to have been around 70 billion Swiss francs in 2003. The industry is cautiously optimistic about the current year. They believe that there will soon be an upturn, albeit a modest one. Stefan Lüscher, editor-in-chief of Auto-Illustrierte, believes that there may well be a good dose of optimism of purpose behind this: "If you add up how many new cars the importers want to sell this year, skepticism is appropriate. Forecasts assume 380,000 to 400,000 sales, while the reality is more likely to be around 280,000 to 300,000 new cars." When asked about their advertising budgets for this year, the marketing managers of the major brands were cautious. "The same" or "an idea lower" were the vague answers. The unanimous tenor was that they would have to wait for the motor show. Renault advertising manager Anne Thorens explains: "The strategy is constantly being adapted, so everything can change very quickly." However, it is to be expected that the downward trend of recent years will continue to be reflected in the advertising budgets. While CHF 290 million was invested in advertising in 2002, according to calculations by the AG für Werbemedienforschung Wemf, the figure for 2003 was CHF 275 million. Nevertheless, the slowdown in car advertising is less pronounced this time than in the previous year, when the decline amounted to 40 million. The winners in the race were once again print products, which accounted for 69 percent of all advertising expenditure. "From the roadside to the street" - advertising managers are convinced of this: slightly more was spent on poster advertising (CHF 38 million compared to CHF 34.7 million in the previous year).
Concert at the car dealership
According to the automotive industry, it is basically up to the manufacturer or importer to promote the brand. The 5400 or so garages operating in Switzerland - small, medium-sized and large brand dealerships and independent businesses - which were involved in 2002 with
39500 employees, are pursuing a different goal: they mainly want to publicize their own name. Advertisements in local newspapers, radio advertising and special events are therefore the means of choice. For large car dealerships, regional trade fairs are also a must. The Zurich Motor Show alone attracts 60,000 interested parties to its halls every year.
The company also comes up with a number of ideas to attract customers to its own showrooms. The Basel-based Kestenholz Group treats its customers to classic car tours, skill tests in the snow of Les Diablerets, a customer magazine and an exclusive theater performance. The Mercedes and Mazda dealership with 260 employees in five branches generates an annual turnover of 260 million francs. One million of this, explains marketing manager Ursula Imber, goes into the advertising budget. According to Willy Egger, section president of the Automobile Trade Association (AGVS) Canton of Zurich and owner of the car dealership of the same name, the rule of thumb is that around one percent of a car dealer's turnover should be spent on advertising. However, he admits that smaller dealers are neither able nor willing to invest that much in the current situation.
In the rain: The small traders
Car shows, customer trips, glossy magazines - smaller companies can only dream of these. "Advertising is incredibly expensive for small businesses," says Guido Suter, AGVS section president for the canton of Zug, who relies primarily on radio advertising, a few advertisements and, above all, the spring exhibition in his own showrooms for his own garage. "Nothing else is of any use to me."
The retailers in Willy Egger's Zurich section are skeptical about events and the like because their success cannot be measured directly. "What's more," says Ursula Imber, "the cheaper items have long since become stale, but customers are now very spoiled. You have to be very creative and come up with better and better ideas."
Jürg Zryd, a car dealership architect and consultant from Aargau, doubts whether events such as classical concerts in the sales hall are of any use at all, quite apart from the fact that "the acoustics are usually miserable". In his opinion, many car dealership owners forget what they actually want to sell: "Namely cars and not lighting concepts or glazed high-tech palaces." What is more important is what directly serves the customer: "A little more hospitality would go a long way, and three marked and free customer parking spaces are better than any spectacular showroom." Willy Egger also relies on a good personal customer relationship, which he achieves primarily through telephone sales and intensive support: "The best advertising is the daily commitment to the customer."
Large car dealerships such as Egger and Kestenholz, as well as smaller dealers such as Suter, agree on one thing: they would like more support from the importers. Willy Egger explains: "Especially when it comes to individual campaigns. Importers tend to lump the whole of Switzerland together, but what works in Lugano,
perhaps not in the Bernese Oberland."
Downward price spiral
The car trade is fundamentally unhappy with discount campaigns dictated by the manufacturers.
"Prices that make us cry" - Nissan's ironic slogan in the campaign for business cars is likely to hit a sensitive nerve in the car industry. The question is, who sheds more tears? The manufacturer or the dealer? Discounts of up to 5,000 francs for the discontinued Opel Astra model, 0% leasing, free maintenance for three years - who can really make any money? The manufacturers only partially subsidize such campaigns. Dealers can make up for the discounts with sales bonuses - provided they meet the sales targets, which is currently rather difficult. Industry insiders suspect that such campaigns are an attempt to bring older models to buyers, while manufacturers such as Citroën see them as an investment. For the PSA Peugeot Citroën Group - Europe's second-largest producer with a market share of 15.6 percent - the calculation has probably worked out. After posting losses in 1998, the turnaround appears to have been successful thanks to last year's aggressive pricing policy. Citroën alone increased its sales by a whopping 23.6 percent.
Nissan also has little cause for tears: after a below-average 2003 (+0.3%), sales rose by 58 percent last month thanks to the business car campaign. However, it remains to be seen at the end of the year whether this does not simply anticipate a considerable proportion of future purchases. And it is also questionable whether customers will abandon their cherished habits in the future: once a discount, always a discount!
New models need advertising
Compared to the automotive industry, the advertising sector has more reason to be happy. There will be no shortage of new launches in the coming years. The pressure on manufacturers to launch more models is increasing because the average age of the vehicle range is one of the critical success factors in the automotive industry. According to a sector study by Bank Leu, only 13 major model launches were reported on the overall car market in 2000 - in 2003, 25 were already announced. Chrysler alone plans to launch 18 new models in Switzerland over the next three years.
Competition is intensifying in two segments in particular: minis and sports cars. And for both, innovation and image aside, price is the trump card.
Daihatsu has obviously understood this. "Bigger is stupid", claims the small Japanese company brashly, whose appearance and price-performance policy almost invites comparison with Ikea: the bare essentials at fair prices. The Cuore model attracts young newcomers in particular. The minimalist economy car, which consumes 4.6 liters per 100 kilometers, has it all - for around 11,000 francs. Fiat is likely to target the same driver segment with the new Fiat Panda. Just like its future owners, it has only just grown up: "Just don't call me baby!" It remains to be seen whether the low-cost all-rounder will fulfill Fiat's hopes, whose sales figures shrank by 6.6 percent in 2003. Mazda, on the other hand, seems to have focused on the right horsepower last year, both in terms of model and advertising. "Zoom-zoom-zoom" is annoying, but obviously works: 15.8 percent more vehicles on the road.
Car advertising is becoming less and less image-driven: Instead, massive discounts and tempting cash payment conditions are very popular.
Renault "Wind": The inflation of concept cars demonstrates the pressure to innovate in the industry.
Katrin Piazza