It’s been a turbulent time for the car industry lately and the press has been having a field day. From the Volkswagen emission scandal, to spontaneous combustions at Vauxhall, it’s been a tough couple of months. So here’s a rundown of the seismic shifts in the auto industry.
It’s about winning back customers…
“Volkswagen of America is offering a $2,000 customer loyalty incentive this month to keep buyers in the fold in the wake of a diesel-emissions cheating scandal.”
…and it looks like it’s working in the US.
The Verge was dumbfounded at the public’s inclination to forgive and forget and concentrate on the bottom line:
“Volkswagen of America just reported its October sales, the first full month of reporting since the scandal broke, and guess what? Sales are up 0.24 percent year over year, likely thanks in part to enormous discounts being offered to prop up volume.”
But Europe is a little more sceptical…
“Volkswagen’s emissions scandal broke in late September and didn’t have time to affect sales for that month, but the full impact on sales now seems to be hitting.
Volkswagen’s sales in Britain fell by nearly 10% last month, while sales of Seat, one of VW’s brands, dropped off by a massive 32%. Skoda, another VW-owned automaker, saw a fall of 3%. The only Volkswagen-owned brand to grow sales was Audi, up by 2%.”
It’s time to win back trust.
As Porsche became implicated in the scandal, Car Magazine looked at how the new group boss was trying to reassure customers and regain their trust.
Matthias Mueller said:
“From the very start I have pushed hard for the relentless and comprehensive clarification of events. We will stop at nothing and nobody. This is a painful process, but it is our only alternative. For us, the only thing that counts is the truth.”
… and that relates to Volkswagen staff too.
Quartz was also concerned about trust issues but within the company:
“Staffers with knowledge of the automaker’s emissions cheating have until November 30 to come clean to designated Volkswagen representatives in order to receive immunity, the company announced today (November 12), in a letter to employees. Those who tell all before the end of the month won’t be fired and won’t have damage claims brought against them by the company, but they could be transferred to another job.”
And the lack of trust has repercussions on the entire industry.
“Automakers are under pressure to hasten their recall processes after coming under fire for time lags between learning about potential flaws and calling back cars for fixes. The pressure has built following recalls by Toyota involving unintended acceleration and General Motors Co. for faulty ignition switches. A litany of carmakers also are repairing millions of air bags made by supplier Takata Corp. due to defective inflators.”
This Is Money reported on the effects of the scandal on sideline industries:
“AIM-listed Ubisense skidded 22.5p or 27 per cent lower to 60.5p on a profits warning. The board blamed it all on the emissions-cheating scandal. Car manufacturers such as BMW, Daimler and VW all use Ubisense’s location intelligence software.”
User-generated content came to the fore in reporting the scandal.
The Independent reported on cases of spontaneous combustion that were being talked about on Facebook.
“Facebook group Vauxhall Zafira Car Fires for owners of the model has more than 5,000 members – with several claiming their seven-seat vehicles had caught fire while there were children inside. Terrifying pictures shared on the group showed a number of vehicles ablaze.”
— Joe Noonan (@NoonanJoe) October 29, 2015
But user-generated content is also part of the solution…
There has been some good feedback from car customers on social:
— Social Bee NI (@socialBeeNI) November 9, 2015
Car manufacturers have also been forced to take stock on how they market their products, and on what kind of product they’re selling.
“The German automaker’s new top-of-the-line flagship 7 Series sedan won’t be available to purchase until Oct. 24, when it hits U.S. showrooms. However, Uber customers living in Miami, New York City, Chicago, and Los Angeles can take free rides in the 7 Series just by ordering it via the ride-hailing app. These free rides are one day only—Oct. 19—and will end by 8 p.m, just enough time to create some word on the street and social media interest as well as some media coverage (like here).”
While according to CNET, Ford is diversifying:
“The company that can stitch that together and make people’s lives easier will emerge as a winner,” Ford said. That’s why the company is hiring programmers and electronics engineers and why it has opened a Silicon Valley lab to arrange partnerships with startups.”
What’s sure is that there are plenty more twists and turns to come on this rocky road. Car manufacturers and their marketing teams are in for a bumpy ride.