On Retailing

Tuesday, October 2, 2001

Car dealers shift strategies

Advertisements take on a patriotic theme

As car sales slumped in the weeks following the terrorist attacks, commercial messages were often replaced by patriotic themes. Much money was spent on messages that seemed to sell no particular product at all.
   Vista Automotive Group let Lamar Outdoor Advertising use a billboard it was renting for a "United We Stand" image that didn't mention Vista. The cost to Vista of the two-week message is about $1,500, said Bill Pettus of Pettus Advertising Inc. in Corpus Christi, which handles Vista's advertising.
   Love Chrysler's Marion Luna Brem put out a television advertisement that speaks mostly of American unity and spirit with the ambiguous inclusion of the company's slogan: "Love keeps you going.'' Love Chrysler's general sales manager, Brannon Brem, said the ad cost several thousand dollars but he didn't want to get specific.
   Now, as many economists predict a recession, car dealerships are getting back to their regular appeals, this time with the subtle hint that consumers need to buy cars to show their patriotic spirit.
   The sense of urgency is real.
   In the first week of the attacks, sales dropped 35 percent nationally, said Jeff Schuster, director of North American forecasting for J.D. Power and Associates. The next week, sales were down 25 percent, and last week, they dropped just under 10 percent from the same time period a year earlier.
   At this rate, J.D. Power is estimating a loss of about 300,000 vehicle sales this year because of the attacks.
   To get people back to buying, General Motors, DaimlerChrysler and Lincoln-Mercury all have rolled out zero-interest car loan offers.
   "That's free money,'' said Chris Archibald, general manager of Pagan Lewis Motors, a Lincoln-Mercury dealer. He said the manufacturer, not the dealers, is absorbing the cost. "I've been in the business for 30 years. I've never seen anything like that.''
   He's imploring customers to take advantage of the deals to help the economy.
   "Do this for God and country,'' he said.
   Pagan Lewis' Jeep ads have a flag in the background and Lee Greenwood singing "Proud to be an American.'' The Lincoln-Mercury ads also have a flag flying above pictures of models and monthly payments.
   DaimlerChrysler also has rolled out zero-percent financing deals for up to three-year loans, as the company also suffered from declining sales. The manufacturer put out a warning last week that third quarter profit expectations might not be realized due to the terrorist attacks.
   Love Chrysler talks about the zero-percent deal in a newspaper ad but the television commercial continues to be Marion Luna Brem's patriotic message.
   "We're letting people know it's OK to come out and buy a car, and go to the mall, to engage in the marketplace,'' said Brannon Brem, Marion Luna Brem's son.
   Love Chrysler also is telling customers that $50 of every vehicle purchase goes to the American Red Cross and so does $1 from every oil change.
   General Motors' advertisements carry the theme: "Keep America rolling,'' and a letter to dealerships said the company was taking steps to keep the economy on track.
   "A key to instilling confidence is to wholeheartedly support the administration's request to protect our economy and the way of life Americans hold dear,'' the letter said. "Beginning Sept. 20, 2001, we are offering interest-free GMAC financing on all GM vehicles through Oct. 31,2001.''
   Schuster said the advertising campaigns have done a good job of saying people need to buy to help the economy, without being offensive.
   "It's subtle. It's done with some taste,'' he said. "That's a fine line. You want people in your showroom and you want them to buy, but you don't want to offend anyone and I think they're doing it tastefully.''
   Pettus also said advertisers were walking a fine line to encourage sales but not offend anyone.
   "In the first week (after the attacks), we pretty much pulled all our advertising,'' he said.
   The effects of the attacks on advertising campaigns haven't gone away, though.
   "We don't want to be too hard-sell, not too happy or frivolous,'' Pettus said. "We don't want to appear to be operating without knowing what's happening.''
   Manufacturer car sales for September are due out today.
  
  

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Contact Naomi Snyder at 886-4316 or snydern@caller.com

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