Don’t Expect a Marketing Blitz From Auto Brands on This Fourth of July

Generous April promotions and new inventory worries seem to have rained on the fireworks this year

car with American flags and fireworks
Customers expecting a host of sales blowouts this weekend may be disappointed. - Credit by Photo Illustration: Trent Joaquin; Sources: Getty Images, Unsplash
Headshot of Robert Klara

Key insights:

Two months ago, if you were looking for signs of just how bad things were for the automotive sector, all you had to do was wander over to the internet and marvel at the deals on offer.

Half a dozen makes, including Detroit’s Big Three, were advertising an unprecedented interest-free financing over seven years. These deals weren’t just for commuter crates, but for Corvettes and Mustangs. Brisk-selling pickups had rarely needed much of a pickup, but there were Ram Trucks and even Ford F-150s (America’s bestselling truck since 1981) available on no-interest terms. As recently as February, 0% financing was a relative rarity, accounting for only 3.6% of financed purchases according to Edmunds. But come April, those sweetheart deals accounted for over a quarter of all purchases. One dealer in Santa Monica, Calif., was even offering the Maserati Ghibli—an $83,000 dream with a Ferrari-built V6—at 0% for 84 months.

It was the Maserati deal (or was it the Land Rover or Jaguar deals?) that finally turned the head of Jessica Caldwell, Edmunds’ executive director for insights. “The incentives felt desperate,” she said, looking back at the whole thing. “It felt like automakers were trying to hang on to anything. And I thought, This is where we’re at right now.”

Indeed, where the auto industry was at in April was a nadir that rivaled the Great Recession, or any other recession. With a year-over-year sales plummet of 53%, the automotive industry was having what Edmunds announced as “the worst auto sales month in at least 30 years.”

In view of that mess, you might think that the July Fourth weekend would also see auto brands scrambling to make up for the losses, ordering their marketing departments to gin up the messaging in a breathless bid to lure buyers back, lest the bottom drop out of the showroom floor forever. But while the coming holiday weekend will certainly see its share of deals, Independence Day isn’t shaping up to be the marketing blitz one might expect. In fact, several major brands have nothing in the works for the Fourth of July at all.

Jeep's "No Small Freedom" will celebrate smaller, more personal liberties.
FCA

“We’re not planning a national campaign,” said Scott Vazin, group vp and chief communications officer at Toyota Motor North America. “We’ll still be running our hybrid and Supra offers, but that’s about it.”

“We don’t have any confirmed July Fourth promotions,” seconded Subaru of America’s corporate communications manager Diane Anton.

“There is nothing new planned in terms of advertising around the Fourth,” said Volkswagen of America’s product communications specialist William Gock. “But our current offers and incentives will be extended to July 6.”

Jaguar Land Rover, which had initially planned to kick off a “sales event” for the Fourth of July, decided last week to bump the effort until later in the summer instead.

For its part, General Motors would say only that it’s playing its July Fourth plans “very close to the vest” and preferred not to comment. Ford Motor did not respond to Adweek’s requests for comment.

Which is not to say no automotive brands will be doing any marketing this weekend—Jeep and Hyundai are still at work on special promotions—but it’s clear that this Independence Day’s pyrotechnics won’t include a lot of flash and bang from automotive brands. And why not? Quite a few reasons, actually.

Things are bad—but not awful

For one thing, the automotive sector isn’t praying for a July Fourth rebound because the rebound actually started several weeks ago. While April car sales were admittedly a disaster, the following month began to see consumers trickling back. The month of May benefitted from an extra weekend, and many customers used it to take advantage of the eye-popping offers many brands had already been advertising.

Which only makes sense. Shelter-in-place mandates may have kept people home for a stretch, but the virus did nothing to squelch the desire for a new car. According to research from ALG, 72% of would-be car buyers said that “their need for a vehicle has remained the same or increased due to the pandemic.” Stuart Schorr, communications vp for Jaguar Land Rover North America, attested that during “the latter half of May and into June, our sales picked up nationwide due to some pent-up demand.”

This was especially true during Memorial Day weekend, three days that saw the first major sales uptick since the virus took hold. A Cars.com survey found that a third of Americans in the market for a car said they’d be shopping on Memorial Day weekend. And according to the Pure Cars Industry Report released on June 4, Memorial Day auto sales were the strongest the industry had seen in months.

“Looking at a national perspective,” the report said, “the number of shoppers and sales rose steadily in the days leading up to the holiday weekend and peaked over the weekend itself. Overall, [it was] encouraging to see people shopping and buying.”

Taking inventory

Automotive promotions are often driven by the need to clear out excess inventory and, right now, many brands simply don’t have that because Covid-19 threw a wrench into so many assembly lines.

“Factories were closed for 10 weeks,” Caldwell said. “Some [brands] are struggling with inventory right now. And although they’ve restarted, it’s not all been that smooth. Quite a few brands could be struggling to get cars to dealerships. And because of that, you’re not going to see some of the good incentives you’ve seen in the past.”

Dean Evans, who enjoyed successful stints as the CMO of both Hyundai Motor America and Subaru of America before joining Cars.com as executive vice president last year, observed that Pacific Rim nameplates whose factories didn’t suffer the kind of curtailment that domestic makes did are likely to have more inventory they want to move this weekend, “so I don’t see the domestics doing a lot of Fourth of July razzle-dazzle,” he said.

Jaguar Land Rover is obviously not a domestic brand, but the U.K., where the company manufactures its vehicles, was hit hard by Covid-19. For the month of May, the country’s vehicle production fell by over 95%. Concern over inventory was the main reason why JLR decided last week to postpone its July Fourth promotional efforts. Now that its lines are up and running again, the company hopes that both inventory and demand will pick up by August and allow those plans to go forward.

But Hyundai, for its part, is ready to make some deals right now. For the Fourth of July, the South Korean make will be running TV and radio spots across the country, touting deals including 0% APR for 72 months plus 90 days of no payments on its 2020 Tucson and Santa Fe models.

“Our priority is maintaining our sales momentum and communicating about the tools we have in place to help keep shoppers and our employees safe,” CMO Angela Zepeda told Adweek. “In May, our retail sales were up 5%, and we gained more market share than any other car company. We also launched the Hyundai Clean Assurance program that provides guidelines for dealers to help safeguard customers and are offering digital retail and home delivery from most of our dealers.”

Adjusting the message

Evans also pointed out that Independence Day isn’t historically a make-or-break event at the dealership anyway—at least not compared to Memorial Day, say, or Presidents Day. “The Fourth of July is more wrapped around picnics than keeping commerce going,” he said. “It’s not a bang-up sales event, historically.”

This year, however, auto brands preparing Fourth of July pushes are finding that the holiday is giving them an opportunity to make subtle but critical adjustments to their brand messaging.

For example, until it held off on its plans, Jaguar Land Rover had aimed to host a summer sales event kicking off on the Fourth of July—except that there wasn’t going to be a mention of the holiday. The marketing team had decided to call the promotions the Land Rover Call to Adventure Sales Event and the Jaguar Resumes Play sales event. As Schorr explained, the latter name is “a little play on words borrowing form the cultural relevancy of watching things on Netflix. If you stop watching [a program], it will ask you if you want to resume watching.”

The names, Schorr explained, demonstrate the brand’s sensitivity to the times: The usual Fourth of July fare of marching bands, parades and parties didn’t feel right. Instead, the brand decided to think in broader terms. “Our plan for summer has been in anticipation of things inching their way back to the new normal,” Schorr said. “As we begin to live in a world with Covid, the next step is more positive and more optimistic.” Jaguar’s focus, Schorr continued, is that “a car is a fun place to do all the things you love to do,” the obvious implication being that the car is also a safe space that allows for social distancing.

The new patriotism

For its part, the Jeep division of Fiat Chrysler Automobiles will be going ahead with its Fourth of July Sales Event this weekend. And, much like Jaguar, the brand will be carefully adjusting its messaging to suit the times.

Fiat Chrysler CMO Olivier Francois said Jeep, by virtue of its historical associations with the U.S. Army, already enjoys an all-American image. It’s about “military, history, adventure and freedom, so here we are, tapping into the patriotic theme, which we’ve done many times,” he said. “We obviously have super-abundant footage of people celebrating the Fourth. But we cannot show that.”

Instead, Jeep has produced a variant of the traditional message it’s calling No Small Freedom. Rather than focusing on the big-picture freedoms one usually thinks about on Independence Day, the company will speak about smaller, more private liberties instead—things like walking your dog, picking up a delivered meal or, say, driving down a highway in a Jeep Wrangler with the top down.

“If there’s one thing these months have taught us,” the video intones, “there’s nothing little about freedoms. And right about now, they feel pretty big.”

Come down to the showroom—or don’t

Another reason many dealerships aren’t exactly staking their futures on customers visiting showrooms this weekend is that many of them have already learned how to sell cars without the showroom. The lockdown period not only forced manufacturers to gear up their online-sales functionality, many of them did it so well that there’s less of a reason to have a traditional holiday sale.

“That’s been one interesting pivot during this time,” Caldwell said. “A lot of dealers have successfully moved to that [online sales] model. It was either do that or don’t sell cars. They figured it out.”

It wasn’t all that long ago, Evans added, that only Car Max and Vroom allowed customers to purchase a car online and have it delivered to the driveway. Now, in the space of weeks, nearly every automaker offers some variant of the service. “You can test-drive it at home and, if you like it, click here!” he said. “There were hundreds of cars sold that way in March and April and, from an operational standpoint, that’s a remarkable feat.”

In May, as the country was still in lockdown, Jaguar tweeted a reminder that “there’s never been a more convenient way to purchase a Jaguar vehicle. Take advantage of our available online and remote shopping services for your convenience.”

For its part, Jeep’s website lets would-be buyers click on the model they like, choose from an array of nearby dealerships that stock the vehicle, and start the purchase process immediately. All the paperwork—including valuation of a trade-in—happens online. Over 95% of FCA’s dealer network now has these tools, and there’s no longer a need to set foot in a showroom at all.

None of which means headquarters still isn’t hoping the upcoming weekend won’t bring in customers, via the web or on foot. After all, the 20 million Americans who are still out of work have theoretically reduced the potential shopper pool by that much, and new-vehicle sales are still expected to be off by 19% for the year. So, Independence Day deals matter, no matter what they’re called.

“We all hope there is some pent-up demand and I think July Fourth will be a big test,” Francois said. “Hopefully, there will be this period of the market catching up and revenge purchasing after Covid. July Fourth is incredibly important.”


@UpperEastRob robert.klara@adweek.com Robert Klara is a senior editor, brands at Adweek, where he specializes in covering the evolution and impact of brands.
Publish date: July 1, 2020 https://dev.adweek.com/brand-marketing/dont-expect-a-marketing-blitz-from-auto-brands-on-this-fourth-of-july/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT