What have car marketers learnt in 2020?

2020 has been a year of turmoil for auto marketers, but has also taught them a great deal. What wisdom will auto CMOs enter 2021 with?

The automobile segment has been through the grinder over the last 12 months; it was already reeling from the shock of an economic slowdown, when covid hit and amplified the challenges facing leaders in the segment. However, it is also one of the most resilient categories out there, and is showing signs of recovery worth holding on to.

How have the rules of engagement for car marketers changed? At a recently held seminar (CMO Week, organised by afaqs!), I spoke to a group of marketers in the auto space about this.

Gaurav Mehta, chief marketing officer, CarDekho, an online marketplace for cars, said, “This might be the start of the golden age of personal mobility…” Indeed, the car has become a bio bubble in these pestilential times.

“The intent – of owning a personal car – has been there for the past seven-eight months. Question is – how does the ecosystem come together to make it happen?” he added.

Speaking of ecosystem, I asked the panel about the relationship between individual car brands and auto maketplaces in the context of pre-owned cars. Are they friends or frenemies?

Tarun Jha, head, marketing, Skoda Auto India (the company recently introduced a programme for pre-owned cars – both, Skoda as well as other brands), said, “It’s a symbiotic ecosystem… players like us also depend on aggregators; we also have partners who help us do this business…”

CarDekho’s Mehta was in agreement; “I don’t think we can look at anyone as a competitor,” he said, referring to both, OEMs (that is, individual car brands, in this context) and like-to-like rivals in his segment, like Cars24, CarWale, among others. Given the kind of “investment, time and digital infrastructure” needed to build the used car market, he underscored the importance of cooperation, between different players, over competition.

“We are seeing an inordinate amount of interest in used cars… all parts of the ecosystem have to come together, in order to structure this industry,” Mehta said, reminding us that the used car segment is not an organised space, unlike the market for new cars.

“We’re at the cusp of a boom in the used car segment. The presence of corporates and responsible, organised (brands) in an industry dominated by unorganised players helps eliminate the distrust that’s there in this (segment),” Gaurav Sinha, head, marketing and PR, Audi India, added.

We also discussed the concept of ‘car subscriptions’, something Maruti has been in the news for recently; essentially, one can drive a new car for a period of one to four years, and pay a monthly fee (source: LiveMint) for it. Car rental brand Zoomcar also runs a subscription service which lets customers rent a car for a period of one to 36 months (source: Fortune India).

We then spoke about emerging 'flexi ownership' models. I asked the panel whether the concept of car subscriptions has the potential to become a big trend and whether it will change the way Indians appraise the idea of car ownership, in 2021.

Rahul Pansare, head, marketing and PR, Fiat Chrysler Automobiles India, said, “Yes I see huge potential in the subscription model, going forward... the platform needs to be leveraged at a much higher level. There has to be more competition, more players; as of now, there aren’t many. This model has been successful in markets like Europe, USA; it will take some time for that to happen in India and for the way people think and feel about owning an automobile to change.”

Skoda’s Jha insisted that though it may seem like it does, “leasing” doesn’t actually absolve one of the ancillary financial trappings of car ownership. Audi’s Sinha added, “(In India), there is some romanticism associated with buying a car… leasing, in our environment, is not a cultural fit…”

We went on to discuss changes in media buying patterns, the pivot towards digital, stronger metrics to measure ROI on digital, the need to cater to first-time car buyers and 'new user' cohorts, and the intangible brand value of cars sold on aggregator platforms versus in showrooms.

Watch the full session below:

The session was sponsored by India TV and powered by Nickelodeon Sonic.

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