Thursday, 24 January 2008

Smart brand to rely on customer testimonials as major marketing strategy

With just about any new vehicle, auto dealers and manufacturers hope that positive word-of-mouth will contribute in generating sales. Smart USA, however, has a gone a step further and announced that customer testimonials will play a major role in marketing the new ForTwo microcar headed to the U.S. this year.

Dave Schembri, Smart President, told an Automotive News panel that, “consumer advocacy is most important right now. People love to discover new things and tell people about it." He went on to explain that Smart customers do not define an age range or demographic, but instead share sensibilities, attitudes and lifestyles. “Smart is the only car that doesn't define class,” he remarked.

It’s going to be interesting to watch not only the types of consumers purchasing Smart vehicles, but also how they go about spreading the word. Undoubtedly, the internet will play a huge roll in communicating the ForTwo’s virtues (and vices). Can we assume that Smart buyers are information-sharing types whose primary outlet for speaking is the web? Or will Smart cars operate as “rolling billboards,” generating buzz on the streets and initiating true word-of-mouth interaction? We’ll find out soon.

Source: Automotive News [Subscription required]

Posted by industry at 4:03 PM in Marketing strategy
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Monday, 21 January 2008

General Motors considering larger urban retail centers; would separate parts and service from showroom

At next month’s National Automobile Dealers Association convention in San Francisco, General Motors will reportedly detail a plan to consolidate major brands under single retail roofs in large urban areas. GM is concerned about maintaining competitive presence in cities, as some dealers have sold their businesses due to real estate values higher than the franchise values themselves.

The new approach would involve the consolidation of Cadillac, HUMMER and Saab into a core brand group, in the same way that Buick, Pontiac and GMC franchises have merged. Chevrolet and Saturn would continue to stand independently, leaving GM with four distinct product “lines.”

One drastic change could involve the separation of showroom and service center, as precious floor space would be used to display product. Service centers would presumably migrate to less expensive city outskirts – a phenomenon that has occurred in a few, albeit limited, markets. But would car buyers feel alienated by the dealers sending them down the road for oil changes?

Analysis: Combining GM brands may be sensible from a business stand point, but dealers should be wary about displaying different brands sharing the same architecture or platform next to one another.

Source: Automotive News [Subscription required]

Posted by industry at 8:11 PM in Auto dealer headlines
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Tuesday, 8 January 2008

Kia set to launch Certified Used program this year; last among full-line auto manufacturers

Sales of Certified Pre-Owned (CPO) vehicles across the industry have grown steadily year-to-year since the beginning of the decade. Customers are not only attracted to the comprehensive inspections and warranties, but also many of the financing incentives offered by manufacturers. Beginning this year, Kia will embark on selling Certified Used models, representing the last full-line manufacturer to embrace this new “type” of retail vehicle.

For a Kia to qualify, the specific vehicle must be no more than five years old and have fewer that 60,000 miles on the odometer. The Certified Used warranty is a 10-year, 100,000-mile deal, beginning when the car was first sold as new. Kia hopes to sell between 13,000 and 15,000 certified autos in 2008, potentially bumping up the residual values of models across the Kia brand.

Source: Automotive News [Subscription required]
Image: Kia Media [2008 Kia Rondo]

Posted by industry at 2:42 PM in Marketing strategy
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