Consumer Sentiments During Challenging Times
Guest writer, LILY, shares her insights on The Changing US Auto Industry.
According to car manufacturing statistics published by OICA, the US was the world‘s top car producing country until Japan overtook them in 2006 by 220 247 units. In 2008, China’s production exceeded the US by 605 639 units while Japan still ranked number one with 2 882 103 units more than the US.
We know that during 2008 to 2010, there was an automotive crisis in the US due to the global financial downturn. High prices of fuel, due to the energy crisis, was another factor affecting the industry. Meanwhile, arose the controversial issue about whether the government should bail out the American “Big Threes”, namely General Motors, Ford and Chrysler, with taxpayers’ money. Polk conducted a market research in 2009 to determine the perception and sentiments of the consumer during those challenging time. Even though this research was done five years ago, I personally can still find lessons to learn from it. The following are the few points that I found relevant and valuable to us in this industry: –
Business and marketing people that want to drive their businesses in the correct direction understand this sentence well: “Listen to the voice of your customer.” True enough, 78% of the respondent in this research said that the automotive industry in those days was maintained at status quo instead of moving forward; the industry did not respond to the consumers’ needs. With the many established market research organisations in the US, couldn’t the automotive players plan five to ten years ahead in anticipation of the energy crisis?
If the players were better prepared, wouldn’t the Energy Efficient Vehicles hub be in the US now instead of Indonesia or Thailand? I’m sure that if they had foreseen the situation, they would have made allocations to satisfy the energy requirements.
Another lesson that I have gained from this research paper is that it’s not always about the ‘new thing’. Today, it is not so easy to find ‘new things’ under the sky. If you have had the opportunity to explore exhibitions and fairs in Europe and USA, tell me about the new things that were revealed. I’m guessing that these ‘new things’ were improved versions of something that existed before, and are not truly ‘new’. This survey discovered a stronger emphasis on the parts and service business, instead of mere vehicle manufacturing, but found that the automotive companies did not focus on after-service during that time.
I notice that in Asia, revenue from after-service is remarkably important as compared to new vehicle sales. With this, another challenge emerges – there is a big price gap of spare parts and labour service between the franchised service centres and independent service centres. On top of this, there is competition between original and counterfeit parts. How do we deal with it? “Listen to what the customer wants” is the answer. Remember that it has to be the correct voices and not voice. Some business owners use isolated cases to represent all customers and, hence, fail miserably.
Don’t attempt ‘new things’ if you can’t; just the important ones that can make a difference in your business.
Do read this market research paper, although it is dated five years ago; there are still valuable insights to be gleaned from within.