Sales down, Spirits up

Written by Malabika Sarkar | Malabika Sarkar | Vikram Chaudhary | Updated: Feb 10 2009, 06:44am hrs
I love bad times. In good times, people are less apt to try new things. In bad times, they have to start to do things better. Martin Puris

The year 2009 is starting to look a bit like what a house would appear after a high school kid throws a party when his parents go out of town. But if the marketplace looked rather disoriented last year, this year its plain chaotic.

In this melee, the automobile market looks somewhat better off. The key word here is somewhat. While growth has hit a speed-breaker, there is no dearth of activity. Heres what we mean.

Till December of the current financial year, sales of passenger vehicles were down by 0.46% at 11,04,237 units against 11,09,309 units in the April-December period of 2007-08. This was mainly due to a 2.66% dip in sales of market leader Maruti in the first nine months of the fiscal, followed by a 1.73% decline in sales posted by General Motors and 20.4% decline in the sales of Honda Siel Cars. Though Hyundai

Motors sales grew by 19.5% in the April-December period of the current fiscal, analysts say the overall industry growth would be largely flat.

Then, history has shown that a general slowdown or even a recession can be a great time to invest in a brand. In fact, some of the most successful brand campaigns in the last five-six decades have sprung in the most economically challenged years. According to Advertising Ages Top 100 Ad Campaigns of the 20th Century, several of the most effective campaigns were launched in the difficult years of 1970-75, when consumer spending nosedived and commodity prices spiraled out of control.

It was in 1974 that BMW positioned itself as The Ultimate Driving Machine. The whole exercise helped the German automaker morph from a niche sports sedan into an aspirational brand known for superior engineering in its entire rangefrom roadsters to sports utility vehicles (SUV).

As marketing and sales executives are being asked to do more with less, can we expect some big ideas from our agencies now While auto advertising will continue to demonstrate excess and hyperbole, can we hope for some hellishly precise ads

Sex and speed are staple of automobile advertising in India, the idea in most ads being a car with the right curves, pardon the brazenness, will attract the girl with the right curves. The piece of machinery is almost incidental. From the early years, right up to this day, automakers have been boisterous, often self-congratulatory, and sometimes on the edge of the truth. Is that going to change

Though the sales graph is refusing to look up, the past few months have seen the launch of some of the most stylish global and local brandssuch as the new Sonata from Hyundai, the Xylo from Mahindra & Mahindra and the Linea from Fiat. The big question is in these times, when everyone seems to be bogged down, how are these companies planning to urge buyers to go out and buy their products And how will their advertising agencies ensure the ad penny works harder

First some data. According to TAM Media Research, a firm that tracks television audience and advertiser spends, in 2008 the total ad volume for the automobile sector on television was 1,73,48,000 seconds, and in print it was 99, 90,000 column centimetres. Because of the new launches, advertisers focused on TV to reach their consumers. TAM observed a 14.3% rise in the TV ads in the October-December 2008 period compared with October-December 2007 and 28% fall in the print ads.

Our sales declined around 3% between April-December 2008 compared to same period last fiscal. But there is no change in our long-term plans, said a Maruti Suzuki spokesperson. Our investment and expansion plans continue. The company has cut down on ad spends by 10% in the second half of this fiscal and it has aggressively taken up new media as the promotional vehicle. The ads mix would be 65% print, 30% television and 5% radio.

The company has been consistent with its advertising and has pumped in money into newspaper and television advertising with gusto. It launched the A-Star, a so-called world strategic model for Maruti, with a lot of fanfare, and said it has high hopes from the vehicle. The A-Star will be exported to around 150 countries across Europe, the Middle East, Latin America, Asia, Australia and Africa. The car, which will be sold as the new Alto in most export markets, will contribute around half of Maruti Suzukis overall export target of two lakh units by 2010-11.

Launch or no launch, Maruti has maintained a steady presence in the media, especially in print, with full-page advertisements informing consumers about its price cuts and festive offers et al.

For its part, Hyundai Motor India has done much better and has managed to improve its marketshare by 3.4 % in 2008 over 2007. We generally dont see a TV commercial for a variant in the auto sector, especially if the variant is launched just months after the original launch. But Hyundai i20 look great pains to explain the technical aspect of the Kappa engine. The Smooth, Suave, Sure Uber Cool hatchback, as Hyundai Motors India likes to call it, is all over print. But there is no Shah Rukh Khan and the attendant razzmatazz. Says Arvind Saxena, senior vice-president, marketing and sales, Hyundai Motor India, Qualitatively, we never compromise and we are confident of the quality of our ads. Meanwhile, there is no change in the advertising plans. We will have a mix of print and television campaigns along with online activities that will also be increased this year. We will promote our new products aggressively.

Fiat, which hasnt really got its strategy for India right, is beginning to make the right noises too. Its newly launched sedan Linea has the right curves and a bright advertising idea. It begins with a father and son walking down a street lined with stores with attractive window displays. The kid stops at every window and looks longingly at the toys etc only to be pulled away by the father because he is in a rush.

Suddenly, the father stops by a window. He is looking at the new Fiat Linea. You guessed it, its now the kids turn to tug at the fathers shirtsleeves. The sign-off line is a bit of a dampener though. Admiration Guaranteed sounds like an ad for one of the Korean durable brands. A good start nonethelessmanages to drive home the core idea of style and aspirational value.

In times of economic slowdown people become very choosy, says, Rajeev Kapoor, CEO, Fiat India Automobiles. They want to purchase a product that is a combination of good price, comfort, safety and beauty. This is the right opportunity to sell a product that combines all this.

This is in sharp contrast to the Mahindra Xylo ad. In a typically Mahindra way, the machine and the technicality is the central theme. Vivek Nayer, senior vice-president, marketing, automotive sector, Mahindra & Mahindra, says, When times are tough, consumers get good packages and tend to grab the best available opportunity. With the Xylo we will be able to shake up the market. The feedback has been fantastic.

Skodas offering for India was its compact premium Fabia. And it managed to advertise it well too, mainly through magazines. In spite of the slowdown in 2008, we have had a significant rise in annual sales, said Thomas Kuehl, board member, sales & marketing, Skoda Auto India. Our advertising strategy at the end of the day has had a positive impact on our sales.

Skoda Auto India boasted of over 28% growth in sales for the year 2008, despite the fact that the economic slowdown has meant a significant dip in the consumers ability to obtain easy credit. The company plans to launch the Superb and the Laura this year.

The company plans to relook at the relative cost and effectiveness of the available media channels to decide the right media mix, though a significant change in the mix may not be in the anvil. The main focus would be to ensure that budgets are spent on value-driven media channels, says the company.

There are some companies who didnt have to try too hard to convince its customers about its new offerings. The brand name was enough. Honda launched its new City with a suave and quiet TV commercial and it just took off. Similar was the story of its new generation Accord.

But then Honda was never high on mass media advertising.