Auto industry analysts from Bob Lutz to the consulting firm McKinsey foresee a decline in private auto sales in the approaching autonomous vehicle era. Lutz predicts the fun will go out of vehicle ownership, which raises a question for the marketers who sell the sizzle — a question of survival.
For the next decade or two, the shift toward self-driving vehicles is likely to be incremental. But at some point, fully autonomous vehicles will be safe, reliable and readily available. Because no one will need to drive them, there may be less owner affinity and pride of ownership, and that could minimize the need for differentiation among brands. Will consumers, especially city dwellers, want to buy or lease a vehicle when it will be less costly and possibly more convenient to call Uber, Lyft, Waymo or one of the numerous new entries that will no doubt offer autonomously driven rides?
The OEM and dealership repercussions of autonomous vehicles raise the question of advertising and the ensuing domino effect should automotive marketing decline. If drivers feel less affinity for their autonomous vehicles, and manufacturers consequently see less need for vehicle differentiation in terms of design and features, the rationale for Tier 1 advertising — auto manufacturers marketing directly to the public — disappears.
When that occurs, the falling dominoes gain momentum. If Tier 1 advertising declines or disappears, there is little sense in continuing Tier 2 dealer association marketing — for example, advertising by the Metro Detroit Chevy Dealers or the Greater Boston Ford Dealers. And when those go away, why then a need for Joe Smith Jeep-Chrysler to spend any advertising dollars? The scenario entails the disruption and perhaps elimination of hundreds, if not thousands, of ad agencies and related suppliers nationally and globally. It would mean an enormous decrease in print, broadcast, online and out-of-home media expenditures, and with that, the loss of untold numbers of typically well-paid jobs.
Equally sobering is the potential loss of the mostly invisible portion of the iceberg that supports it — supplier organizations that produce brochures and other materials, develop marketing incentives for the OEMs, produce maintenance and repair programs and incentives, manage customer satisfaction programs, provide sales training in dealerships, produce the new-vehicle intro shows, design auto show displays ... and on and on.
On a global basis, the auto industry supports hundreds of thousands of individuals in these disciplines. So, should autonomous vehicles radically change vehicle ownership and customer behavior, it will hit home powerfully.
To be sure, Lutz reminds us that a small number of aficionados will continue to purchase and drive their vehicles, just as a small number today continue to maintain and drive their TR3 roadsters and '57 Chevy convertibles.
And McKinsey forecasts that the self-driving era heralds new marketing opportunities — for example, in advertising to passengers in autonomous vehicles, who will have little to do besides attend to in-car media. But while that may be attractive for national ad agencies, it will do little for those involved in Tier 2 and Tier 3 advertising segments and even less for the myriad marketing suppliers.
To be sure, autonomy may have minimal impact on vehicle design, the ownership experience, buyer behavior and the marketing infrastructure that supports them. But if Lutz is correct, this would be a good time for automotive marketers to either engage in serious strategic planning or develop an advance directive.