The Global Auto Market Is Bouncing Back, With Digital Leading the Charge
Over the past year, the automotive industry has been through a number of shake-ups — some more disruptive than others — with a fear looming over the heads of industry professionals that the so-called “death of the sedan” would ultimately drag down the global auto market.
Although 2017 marked the first year of a slight decline in sales in North America since the Great Recession, the first quarter of 2018 is off to a promising start, showcasing a 10% increase in leads and overall site engagement compared to Q4 of 2017, according to a new IgnitionOne report.
The report, which details global Q1 2018 auto trends, examined the regional breakdown of site traffic, user engagement, and leads of nearly 3,000 OEM and dealer sites across the U.S.; Europe, the Middle East, and Africa (EMEA); Asia Pacific (APAC); and Latin America (LATAM).
The overall increase in visitor engagement means that the growth in site visits also consists of better-quality traffic, which in turn is a positive indication of future automotive sales growth. Contrary to the dip in sales seen in North America in 2017, the LATAM market experienced an economic rebound, with site visitors almost doubling in volume (55%) since the previous quarter.
This trend could likely be attributed to the rise of e-commerce in the region, where sales are projected to grow from circa $57 billion in 2016 to almost $85 billion by 2019.
According to Frost & Sullivan, automotive sales in Latin America are anticipated to reach $5.8 million, up by almost 2% compared to 2017, and LATAM’s flourishing economy coupled with the surge of mobile users in emerging markets will likely continue to propel automotive sales in the region through 2018.
Given the unprecedented increase in smartphone and internet penetration across APAC and LATAM, auto marketers and dealers alike should be paying close attention to the rise of mobile-first economies by deploying targeted campaigns and initiatives to effectively engage “the next 100 million” users and potential customers.
First-quarter 2018 saw an increase in site engagement via tablet (5%) and desktop (13%), with mobile engagement remaining consistent despite generating a 4% increase in site visits.
This emphasizes the importance of optimizing the digital customer journey for mobile users, as the quality and size of device screens continue to dictate overall shopping experiences.
The trend also reiterates the significance of an omnichannel marketing strategy as customers’ point-of-sale preferences are constantly evolving, not to mention the fact that a customer’s decision to complete (or abandon) a purchase is heavily influenced by the quality of the shopping experience across channels.
The reported 10% increase in leads is likely due to more effective lead-generation strategies from OEMs.
This number could continue to fluctuate due to a number of economic (and political) factors affecting the cost and availability of resources.
For example, automotive consumers in the U.S. are currently experiencing a surge in fuel prices, with 2018 marking the highest rates since 2014.
Prices could continue to climb after the U.S. decided in early May to reimpose sanctions on Iran, the world’s fifth-largest oil producer.
Additionally, as consumers continue to rally in favor of more sustainable electric vehicles, we could see this influence market share by Q4 2018, with experts predicting sales of these segments to double compared to 2017.
For now, trucks and SUVs are still reigning supreme, accounting for about two-thirds of the market overall. Europe is spearheading the popularity of SUVs in particular, and brands are adding more and more SUVs, with the BMW X2 and Volvo XC40 as recent examples of what’s grabbing shopper interest, resulting in a 44% share of site visits in Q1.
Of course, continued shake-ups to the auto industry are inevitable. From fluctuation in the global stock and gasoline markets to changes in trends, shopping habits, and consumer preferences, there’s always change on the horizon for the auto world.
It’s promising to see an upward trajectory for overall auto sales in the first quarter of 2018, with growth potential buoyed further by the ongoing proliferation of the internet and mobile/tablet use across emerging markets.
In an industry that is continually fluctuating, digital channels are set to play an increasingly important role for brands, dealers, and marketers in the global auto market in the months ahead.
Frank Goldberg is the senior director of automotive for North America at IgnitionOne. He is IgnitionOne’s automotive industry expert, educating marketers on trends in the digital space, and oversees sales for the North American automotive vertical. Prior to his role at IgnitionOne, Frank was the North American director of sales for Emailvision, a global email service provider, focusing on the retail, e-commerce, and finance verticals. Before Emailvision, he was a senior director at various marketing and marcom agencies, including Edelman Worldwide. Frank brings over 15 years of experience in traditional, digital, and advertising technology to IgnitionOne.