In the rebate era the buyer wants price, not brand
If they make you a brand manager, try to get pickup trucks, sport-utilities or imported luxury cars.
If you're building the brand for American sedans and coupes, you're spitting against the wind. The main sales weapon today is not affinity marketing to tightly defined customers. The main weapon is cash rebates or rock-bottom monthly lease promotions.
COME ON DOWN! GET YOUR MONEY! Take this car off our hands!
Chrysler Corp. reported per-vehicle incentives for the first quarter at $1,230, up from $705 in the year-ago quarter. General Motors is at $1,305, and Ford is playing in the same ballpark. Nissan's are even higher.
All this in the era of brand management?
There's a disconnect here.
Brand management's aim was to make premium names out of divisions and products. A brand is a promise, a relationship that inspires confidence, and so on. But ... if you want an Oldsmobile Aurora, here's a $2,000 rebate. Take this Dodge Neon for $1,500 cash. Buy a Mercury Villager, and walk home with $2,000.
Brand management works for elite companies that never talked about brand management. They simply have made sure that their products and their customer handling were what they ought to be. Look at Mercedes-Benz and BMW.
At the mass automakers, big sport-utilities don't need rebates. Buyers want them, irrespective of the quality of the dealer.
But most passenger cars - exceptions include two Hondas and the Toyota Camry - have become commodities. That pesky buyer wants price first.
It turns out that the car business is different from other industries.
A different breed
When the used-car superstores started the so-called retail revolution, they were going to whup the existing used-car stores, both franchised and independent, with massive stocks of 1- and 2-year-old cars and modern, customer-friendly selling methods.
They forgot about price.
They've been running a high-cost operation, and they charged accordingly. Old used-car operators picked off the prospects.
So the superstores are moving to older cars. Hoo, boy! Wait till they compete with the grizzled horse traders of the used-car business.
For AutoNation's parent, Republic Industries, the new-car business is easier. Republic bought successful dealerships and retained their savvy owners. Used cars are a completely different breed.