August 22nd, 2012 at 12:01pm
A recently published study indicates a free-trade agreement with Japan would be very harmful to the automotive industry in the United States. Vehicle-sharing company Zipcar just announced plans to expand its business by offering vans for rent in select markets across North America. Land Rover cannot keep up with demand for the hot-selling Evoque. All that and more, plus guest host Michelle Krebs from Edmunds.com shares some analysis on automotive advertising during the Olympic Games.
It’s Wednesday, the 22nd of August, 2012. Welcome to another episode of Autoline Daily! Make yourself comfortable, there’s a lot going on today. I’m Michelle Krebs, Senior Analyst at Edmunds.com, bringing you the latest news from the world of cars.
GIANT SUCKING SOUND
A new study from the Center for Automotive Research, which was backed by Ford, says that allowing Japan in the Trans-Pacific Partnership free trade agreement will cost the U.S. auto industry thousands of jobs. According to the Detroit News, production in the U.S. would fall by over 65,000 units because it would be cheaper for Japanese automakers to build vehicles in Japan and export them to the U.S. since the import tariff would be eliminated. Exports from Japan to the U.S. would increase by over 100,000 units. The study says 2,600 direct auto-manufacturing jobs would be lost, and an estimated 9,000 supplier jobs and another 14,900 auto-related jobs would be eliminated. The Detroit automakers don’t want Japan in the talks, arguing the country doesn’t do enough to open its market to American vehicles.
NEXT-GEN CORVETTE ON THE WAY
General Motors is gearing up to build the next-generation Corvette. According to the Detroit News, starting in September, the company will begin retooling its Bowling Green Assembly Plant in Kentucky to build the new sports car. GM will close public tours during that time and also suspend the Corvette buyer’s tour, which gives owners the chance to watch their Corvette being built. Production will continue while the new equipment is being installed. GM hasn’t announced any info on the next-gen Corvette but it’s expected to be revealed sometime next year.
Think you could earn a fortune if you ran your own dealership? This Friday, August 24th at 8:00 p.m. Eastern Time you’ll have your chance. The RoundAbout show is holding a special Game Night where you can play Dungeons & Dealers with some of RoAb’s regulars like Jim and Bob Hall. To play, you have to register. Just visit the RoundAbout section of Autoline.tv to sign up and get all the info you’ll need to join in. Again, that’s August 24th, 8:00 p.m. Eastern at Autoline.tv.
ZIPVANS COMING YOUR WAY
Vehicle-sharing network Zipcar just announced plans to expand its business. The company is bringing its Zipvan service to North America. So far it’s been rolled out in Seattle, Los Angeles, Philadelphia and Portland, Oregon. Over the next year it will enter other metro markets across the continent. The service is extremely popular elsewhere around the world, particularly in London where van rentals account for some 10 percent of Zipcar’s UK business. In the United States, Ford E-150 cargo vans will be offered for rent by the hour or the day. This is a great service if you’re moving or need to transport bulky items.
‘ROUND-THE-CLOCK BUILDING (subscription required)
There’s no doubt about it, Jaguar Land Rover has a hit on its hands. According to WardsAuto.com, the company is struggling to keep up with demand for the new Range Rover Evoque. Its factory in Halewood, England is running ‘round the clock – three full shifts. Nearly 88,000 have been sold since the Evoque went on sale in July of last year. The luxury SUV is available in more than 170 markets across the globe.
Sit tight, because after the break we’re going to dive into some of the hottest automotive ads that came out during the Olympic Games . . .
AUTO ADVERTISING IMPACT
The London Olympics are over but the aftermath could be felt in August car sales. We’ll know for sure when industry sales are tallied on Sept. 4.
If you were watching the summer games, you no doubt saw heavy advertising by official sponsor BMW as well as General Motors with its Cadillac and Chevrolet brands. As expected, the ads generated interest in some of the models and brands. But surprisingly, the ads may have had an impact in terms of immediate sales as well.
For the first 11 sales days in August, when the Olympics were in full swing, compared with the first 11 sales days of July, Cadillac’s retail market share rose 19 percent, according to sales transaction data gathered by Edmunds.com. Some of the increase is due to the fact that Cadillac has a new model already on the market. The flagship Cadillac XTS went on sale in June. But it appears the Olympic ads had a halo effect on the entire brand. BMW’s retail market share also rose for the early days in August. We’ll have to wait until after Labor Day to see if Cadillac and BMW sales and market share continue to rise.
Big-time advertising like that on the Olympics isn’t about generating immediate sales, however. It’s about generating interest in brands and its models for future sales. And BMW and Cadillac got results on that count as well. Both luxury brands saw significant increases in shopping consideration on Edmunds.com. Shopping consideration, which measures visitors who click on the brand and its models, is an indicator of advertising effectiveness, but not necessarily a predictor of future sales.
From the opening ceremony to the closing one, the Cadillac brand posted the biggest rise in shopping consideration on Edmunds.com at 59 percent. The 2013 Cadillac ATS, the brand’s new BMW 3 Series fighter that goes on sale later this year, starred in the ads. The Cadillac ATS saw a 455-percent gain in consideration. Of course, it’s a new model so it had virtually no consideration.
Still, the “Cadillac ATS vs. The World” campaign resonated. The ads were shot in exotic locations, including the deserts of Morocco, the streets of Monaco, the hand-chiseled tunnels of China and windswept Patagonia, Chile.
Shopping consideration for BMW-branded models increased 32 percent; Mini rose 13 percent, according to Edmunds.com’s analysis. The BMW X1, a new entry-level crossover, posted the largest rise in shopping consideration on Edmunds.com – a massive 1,011 percent increase. Like the ATS, the model is new so had little consideration to start with. BMW also advertised its popular X3 crossover, which had a 26-percent rise in shopping consideration, and the 5 Series sedan, which had consideration up 11 percent. Mini saw a 19-percent gain in shopping consideration of the Mini Cooper.
Meantime, GM’s Chevrolet division, which also advertised during the games, didn’t fare as well, posting no increase in shopping consideration.
And on that note I think we’re just about done for today. Once more, I’m Michelle Krebs from Edmunds.com. Thanks for joining us; I’ll see you next time.