Disruption is here — and marketers are adjusting

LOS ANGELES — Traditional automakers are wrestling with disruptive forces — new green-vehicle platforms, shifting demographics and nimble startups focused on the online experience — while upstart companies are tinkering with their business models.

That was a common theme during a panel discussion at Automotive News Marketing 360: L.A. last week, moderated by Automotive News Group Publisher KC Crain.

Dean Evans, chief marketing officer of Hyundai Motor America, said the brand is heavily focused on streamlining the buying process through transparent online pricing so that the average time a customer spends in a dealership can be reduced, "and most of it is to get to know the car, not to figure out the price," he said. Innovative marketing of that buying process is key to its success, he added.

Susie Rossick, assistant vice president of Acura automotive marketing, said vehicle platforms focused on electrification — such as the Honda Clarity — have been a new challenge to marketers who need to demystify the technologies to consumers before they can drive sales of advanced green vehicles. "Our big focus was really on education because what we found out was that most people don't understand electrification other than a hybrid, and they don't understand if it fits into their life," she said.

Toyota, a pioneer in hybrid technology, faces the same challenge, said Ed Laukes, group vice president of Toyota Division marketing. "From an education perspective and with the diversification of the way that people are consuming media, it's getting tougher and tougher," he told the audience. "We're moving into this area where education is a primary driver in every single campaign that we do."

Ed Brojerdi, global head of brand for the Fair car subscription service, said his startup was open to experimentation when reaching consumers, in part because the company's business model requires potential customers to download a smartphone app. "We've been experimenting, and we'll invest heavily in certain areas, and if we see it's not successful, we'll literally pull right out and go into something else," he said.

Fair is not shy about using traditional marketing, he added, but is also sponsoring a podcast as part of its experimentation.

Fair represents a potential disrupter to the auto industry since it pairs consumers with used cars that can be leased for a monthly payment with no long-term contracts or bank loans. Or "without the tyranny of debt," according to Brojerdi.

Laukes said that while disrupters such as Uber have come up with new mobility models, they aren't making any money yet. Automakers, he said, need to embrace the challenge and improve their own business practices. "It's on us right now to respond and respond very, very quickly so that we don't lose any more traction relative to where we should have been a long time ago," he said.