The more we look down the road these days, the more familiar the landscape appears. Despite the focus of the Management Briefing Seminars on the future of the automotive industry, it was difficult to look to the future without considering the past, especially as news reports illuminated past challenges for the industry.
Oil prices continued to fall, ending Monday at $45 per barrel, and automakers reported sales figures showing consumers responded to those low oil prices by buying more trucks and larger vehicles but fewer smaller vehicles. It all sounded like a familiar repetition of the pre-recession high points of the auto industry.
General Motors’ Chief Economist Mustafa Mohatarem commented at the beginning of his presentation Tuesday morning in the Sales Forecast Workshop, “You have to assume history repeats; tastes don’t change that much.”
Mohatarem wasn’t predicting doom and gloom. In fact he was showcasing how the auto industry has outperformed other sectors during a very slow economic recovery. He also predicted bright times ahead resulting from a number of factors, including low oil prices and an improving employment rate.
Happy days are ahead, but how can communications professionals ensure they keep an eye on the future with a realistic view of the challenges the industry still faces?
Communicate the value of long-term technology investments
The technology investments needed for the automobile of the future are vast. Consumer expectations are changing rapidly and challenge the industry to bring technology to market faster. CAFÉ and GHG are staring automakers and suppliers in the face with “significant hurdles ahead,” according to Michael Robinet of IHS Automotive.
While many new advancements to meet these challenges have been displayed at auto shows and industry events, they were often presented without context of the challenges for fitting these advancements into existing manufacturing cycles. In an effort to show innovation, the industry has muddied consumer expectations. Communicators can help to alleviate that confusion and showcase how these investments build for the future within the context of the current state of the industry. And as margins continue to shrink, communicators can help to explain the true value of technology innovation for the future so investment in these key areas is prioritized.
Help the c-suite to truly understand the customer
Mohatarem showed headlines from past years that stated millennials weren’t interested in cars, but he exhibited how, as employment rates have improved with this group, they behave like previous generations and buy vehicles.
Steve Szakaly, chief economist of the National Automobile Dealers Association, highlighted the debt factor for millennials as a major barrier, though.
Communicators must resist the urge to stereotype the millennial generation, as so many already have done. They need to consistently provide an environmental scan with insights into the millennial shopper’s needs and challenges. They can’t ignore the debt factor and have to balance value messaging with the expectations around features.
Balance short-term and long-term communications
As automakers trumpeted sales figures, the more in-depth numbers told a different story. The industry is certainly responsible for hitting short-term metrics, especially for Wall Street, but it can’t wallow in the glory of short-term numbers without communicating long-term preparations.
Szakaly of NADA challenged that the industry has to measure itself beyond just sales and capacity. For the industry, the focus on these measures has meant a sacrifice in profitability.
Communicators can help to bridge the gap between celebrating short-term success and reminding everyone about a long-term vision that addresses the challenges of the future.
While good times are ahead for the industry, automotive communicators need to heed lessons from the past and keep an eye on the future.