Selling new cars has never been tougher. Where the used-car
salesman once had a dodgy reputation, it is the new-car companies that
the British no longer trust. In turn, car marketing and promotions are
Agencies are having to find new ways to help car-makers attract
It isn’t easy. Consumers are worried about rip-off prices - and they
have good reason. UK consumers buying V-reg cars last August paid pounds
1bn more than if they had bought the same cars in continental Europe,
according to the Competition Commission report published in April.
The report also shows that prices in the UK are 10% to 12% higher than
in similar countries in Europe. That means the consumer is paying pounds
1100 too much for the average car.
A survey by the Chartered Institute of Marketing found that 92% of
consumers believe manufacturers and dealers are ripping them off.
In June, Stephen Byers, trade and industry secretary, made some initial
moves to bring down car prices and pledged to make it easier for dealers
to buy cars from abroad.
But the real shift will not take place until European Union legislation
that perpetuates the system of tied dealers - known as the Block
Exemption - is challenged. The report advocates major changes, which
could see new car supermarkets in Britain displaying every make and
model of car side by side. This would enable consumers to compare prices
’There is a huge amount of speculation and analysis about the future of
dealer networks,’ says Phil Bourne, managing director of KLP Euro RSCG,
Peugeot’s sales promotion agency. ’The retailing landscape for car sales
is going to be dramatically different. Car companies are under scrutiny
about prices and customers are less dependent on dealers. People are
better informed and are using the internet to find out more.’
So where does that leave the car marketers and their promotions? Can
incentives or competitions convert cynics into customers?
’Traditionally, promotions in the car industry have been about driving
traffic to the dealers,’ says Bourne. ’Now the primary role for sales
promotion is to infiltrate other environments and forge new
This means taking the car to the consumer, rather than trying to entice
the customer to the car.
Recent Peugeot activities have included a joint promotion with bra-maker
Gossard to reinforce the brand positioning of the Peugeot 106.
KLP Euro RSCG put together a campaign targeting young, independent,
fashion-conscious women, which ran in 740 UK retail outlets.
The incentives included a chance for Gossard purchasers to win a Peugeot
106 GTI and there were in-store promotional teams in four cities.
’We used the promotion to collect data and drive traffic,’ says
’It is about getting direct access to the right prospects, outside the
traditional car territories. Many women do experience anxiety when they
visit dealerships. They think they are going to be patronised or given
the hard sell.
’The promotion gave us wide exposure and, in some stores, Gossard sales
were up 50%,’ says Bourne.
Although the promotion was a hit for Gossard, its impact on car sales
was unknown as Peugeot did not measure the results. Yet car-makers are
using more sophisticated promotional techniques.
’The role of promotions within the car industry has changed
significantly over the past five years. There are far fewer sales
promotions operating in isolation, which is a good thing. Promotional
techniques are being used more intelligently and strategically and they
are an integral part of the brand building,’ says Bourne.
Integration is vital, says Keith O’Loughlin, client services director at
The Russell Organisation, an agency with automotive sector associations
and whose clients include BMW, Volvo and Honda.
’Sales promotion and advertising must go hand in hand. You can get lost
at a local level if you haven’t got a recognisable brand and product
strategy,’ says O’Loughlin.
Charles Endacott, managing director of Endacott RJB Marketing, another
automotive specialist, agrees: ’Historically, most promotions have been
stand-alone campaigns designed to drive traffic into the showrooms,
where sales staff were expected to close the sale,’ he says.
’Sales promotion needs to be seen as part of a cohesive marketing and
sales process that starts with identifying the target audience and what
turns them on, but then continues through to after-sales service to
generate maximum brand loyalty,’ he says.
Selling cars calls for a 360-degree marketing strategy, says Tim Groves,
account director at Interfocus.
’The style, tone, approach and identity of the brand or marque must
remain as a constant seam in the work,’ he says. ’Brand values must be
upheld in any activity, no matter how small. If this isn’t done, it can
be self-defeating or, even worse, damaging.’
Interfocus is responsible for devising and implementing an integrated
campaign for Lexus.
’Luxury vehicle launches often involve extensive and costly national
track days, golf days or dinners, while volume marques can only really
afford to offer this to fleet buyers and key driver,’ says Groves.
The agency came up with a promotion to increase Lexus LS400 test drives
and sales, which featured a year’s National Trust membership as part of
the test drive invitation package.
’The focus was very much on brand values and being environmentally
responsible,’ says Groves.
’It provided purpose and interest to the test-drive, had lasting value
for the customer and also encouraged use of the car’s navigation system
to locate Trust sites. The initial mailer contained a Trust handbook, so
even if the test drive was not taken, this would still generate
Of course, there’s a world of difference between an expensive executive
car and a hatchback.
’Manufacturers of luxury and super cars need to look for a match between
the values inherent in their brand and the event,’ says Graham
Singleton, senior consultant at brand strategists,The Value
But he warns: ’Luxury and super sports car manufacturers have to be
aware that the people who value promotional material are often the
people who do not own, and have no chance of ever owning, the car
With mainstream cars, he says: ’The brands that have the most consistent
and focused advertising have the most consistent promotional events. So
Peugeot is offering cruises, with the core values of freedom and escape,
whereas all Rover offers are cash-backs and roll backs.’
In fact, Rover is doing surprisingly well in a year that has seen the
dramatic demise of its relationship with BMW and a takeover by
Its success seems to boil down to some rather old-fashioned sales
Rover began the year with a prize draw that offered an opportunity to
spend a week on Richard Branson’s Necker Island in the British Virgin
In April and May, however, Rover opted for a series of cashbacks of up
to pounds 2,000 and other finance packages. The result was that Rover
enjoyed its best April ever and sold 20,000 cars.
The Rover 25 achieved 9910 sales, compared with Rover 200 sales of 3442
in April 1999. The April 2000 sales figures made the Rover 25 the
best-selling car in the UK, a position it has not held since December
Now, new Rover chief executive Kevin Howe has vowed to slash the
company’s above-the-line spend and concentrate on below-the-line.
Rover’s experience reveals the potential power of sales promotions to
sell cars. ’It is all about driving traffic and ultimately about driving
sales,’ says Anya Tinklin, account manager at agency IMP. ’The
above-the-line campaigns drive awareness but then our activity goes
right to the heart of the hot prospects.’
IMP handles below the line for Fiat, working with sister companies
D’Arcy and MediaVest which look after Fiat’s advertising and media
’Fiat is all about being bright, new and fresh. As a marque it stands
for safety, reliability and Italian flair,’ says Tinklin.
In February this year, IMP promoted the new Fiat Punto. ’The new Punto
launched in November 1999. We wanted to drive footfall to the
dealerships and increase test drives,’ says Tinklin. Aimed at 18- to
26-year-olds, the campaign, ’New Punto, New You’, centred on a
competition to win pounds 1000 of new clothes.
’There was massive point-of-sale in all 220 dealerships, with entry
tickets and a tie-breaker question - ’Why do you want a new you?’ ’ says
The event attracted ’a staggering response’ and the judges had to choose
ten winners from 5000 entries.
Fiat then turned its attention to its family car, the Multipla. IMP took
the car to its target audience of young families by creating special
Multipla Worlds at Chessington World of Adventures and Alton Towers.
’We wanted to capture young families when they were having a good time,’
says Tinklin. ’We approached people who seemed interested - we didn’t
want to do a hard sell.’
In both amusement parks, IMP constructed a blue dome to house the car
and featured incentives including competitions to win a Multipla and
also to win a family holiday for six. Inside the blue dome, there were
attractions for children such as Multipla Scalectrix and goody bags.
The Multipla has an unusual appearance, due to the fact that it was
designed from the inside out. As a result, its advertising theme is
’Makes sense on the inside’.
At Chessington, 60% of those that took the courtesy car entered the
competition, while 30% of the 11,000 that visited the blue dome also
entered. More than 300 people signed up to take test drives.
Although Fiat took its Multipla promotion away from the dealer
environment, the dealer network is still important to Fiat, says
Tinklin. But, he warns : ’The internet is having a growing impact on the
market and there are going to be a lot of changes.’
Thousands of car-buyers are using the web to gather information and many
are buying at sites such as autobytel.co.uk and oneswoop.co.uk.
As competition hots up, the role of sales promotion could become more
important. A well-targeted promotion that fits the car brand may well
become the deciding factor between two cars with similar price tags.
- New car sales to private buyers fell by 11% in January 2000, due to
allegations of ’rip-off’ prices in the UK.
- 1999 was the first year since 1991 to see a decrease in new car
- 58% of ABs have purchased a new or nearly new car, of which 39% were
bought from a franchised dealer, 26% from an independent used car dealer
and 26% from a private seller.
- 16% of consumers would consider going abroad to buy a car, while 15%
are delaying purchase in the expectation that prices will fall.
- Only 5% of consumers would currently consider buying a car through the
HONDA CASE STUDY
Honda uses sales promotion strategically to match the audience to the
’The key to sales promotion is the detail,’ says Stephen Hollings, head
of marketing at Honda. ’If you get the detail right, the timing right
and the dealer commitment right, then sales promotions can be very
Despite the gloom in the car industry this year, Honda has been able to
announce that another Honda model is to be made in Swindon. ’The basis
of the Honda business is UK manufacturing,’ says Hollings. ’Honda has
got a lot going for it and we have been able to send out the ’Built in
Britain’ message. The April promotions have been very successful.’
The three April promotions were aimed at different target audiences and
each had distinctive creative approaches.
The first was a used-car promotion put together by its below-the-line
agency, The Russell Organisation, and backed by local ads devised by
’The promotion was based on an incentive to win back the value of the
car you were trading in,’ explains Keith O’Loughlin, client services
director at The Russell Organisation.
’Honda sold 1500 used cars against 800 on the same weekend the year
before. They were very pleased with the results in what was a difficult
The second promotion focused on the latest Honda recreational vehicle,
the HRV5, which has seen widespread exposure thanks to the ’Five Go Mad
in Newquay’ ad campaign.
’This was a test-drive incentive backed by a competition offering a
series of lifestyle prizes which you could win for a year - including an
HRV5, a Nokia phone and membership to a David Lloyd health club,’
’It was very youth- and consumer-oriented and the network were very
pleased with the response.’
The third weekend was aimed firmly at families and was themed around
motorsport, as it took place over the weekend of the British Grand
A straw poll of the dealers revealed that the promotions had a dramatic
effect. According to Hollings, several dealers described it as the ’best
used-car weekend ever’, with one selling 23 cars.
’We wanted to be positive and create some energy as we came out of a
tough March,’ says Hollings. ’We wanted to generate a buzz and
excitement at a time when the motor industry was doing a lot of
navel-gazing and getting a bad press.’