ResearchMar 27th, 2020

Where the COVID-19 Outbreak Is Impacting Dealers’ Marketing Strategies


As the world continues to watch and see exactly how the COVID-19 outbreak unfolds, everyone involved in the automotive industry is also eyes wide open on the topic. The outbreak has had a sweeping and profound impact in a short amount of time, and it has been a striking blow to what was a magnificent run of sales dating back to the recession of 2010.

How Bad Will Things Get?

J.D. Power said recently the industry could see a decline of up to three million retail sales in 2020 as a result of COVID-19. This would equate to an annual sales range of between 14 and 16 million. The analyst’s pre-virus forecast was for 16.8 million in total new sales.

Hampering much of this opportunity are the many automakers that decided to suspend production of vehicles, such as General Motors, Ford, and Fiat Chrysler. However, J.D. Power also stated that it is very possible that the industry can recover from such a scenario, driven of course by government stimulus, incentives and other possible measures.

What Can Dealers Do?

In the near term, dealers are left wondering what to do, how to preserve sales opportunities, and how to be as helpful as possible to their customers. Like many other companies in other industries, dealers have had to make quick and sometimes drastic adjustments to their marketing strategies.

Where Dealers Are Adjusting Their Marketing

According to Merit Mile Research, in an online poll of roughly 200 dealers around the U.S. during the weekend of March 19 – 22 when the outbreak had begun to reach large proportions, 19% of dealers said they had not made any changes at that point to their marketing budgets. However, 18% said they had already cut as much as half of their marketing budget, and another third of dealers said they had cut between 20% - 40% of their marketing budget.

This comes as no surprise, especially since many businesses have had to completely shutter their doors, especially in industries such as hospitality, restaurants, and fitness centers all throughout the U.S. Dealers themselves are looking to not only do right by their customers and employees and show as much empathy as possible, but they’re also trying to stop as much bleeding as possible to the bottom line.

Merit Mile Research Findings for 19th - 22nd March 2020

Social, Direct Mail to See Large Cuts

In terms of where dealers are making cuts to their marketing budgets, they’re slashing across the board. The majority of dealers (63%) said they are making cuts to their social media marketing, which may be no surprise since social channels were heavily populated by dealers pre-virus. Direct mail (53%) and email marketing (47%) were also reported to be taking large cuts from the marketing budget.

In the near-term, most dealers (35%) said they will leverage their marketing strategies to “shift focus to more engagement with existing customers”, which makes sense because they realize their current customers have many questions and they want to ensure proper service levels are being met. Even though social media and direct mail saw a large reduction, dealers say they will continue to rely on these channels in some capacity in an effort to reach and communicate with customers.

A Focus on Engaging with Existing Customers

This commitment to communication will be critical as 82% of dealers say their customers are most concerned with how dealers are cleaning down cars to prevent the spread of the virus. Another 63% of dealers said their customers are mostly concerned with inquiring about buying or leasing a vehicle online without having to come to the showroom, and also asking if the service centers will remain open for business.

These are trying times for dealers, their employees and certainly for their customers. A strong (and continued) focus on serving their communities will carry them through the COVID-19 outbreak, and while sales are sure to take a hit, we will all come through stronger when business returns to normal. Having the right insight into making appropriate adjustments to the marketing strategy will help dealers remain engaged with their customers, and they will be seen as a helpful resource rather than simply promoting deals and offers.

John Sternal is a Partner and Director of PR & Social Media at Merit Mile, where he oversees strategic client programs for PR, social media, and communications research. He has been writing about the automotive industry since 2005 and has more than 25 years of experience in building brands and creating brand awareness through PR, communications, and media strategy.

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