Which is most attractive? An in-ground pool, an overseas holiday, a home extension or
a new car?
Amongst others, the swimming pool, travel and home improvement industries are three with which the Australian automotive industry must compete for the disposable, discretionary, or financeable means of present day big-ticket items consumed by Australians.
- There are 944,600 swimming pools and spas in the backyards of Australia’s homes. This figure increases a little over 1 per cent every year– so say around 10,000 additional swimming pools are installed, per annum. (All stats c/- ABS)
- In per capita terms, 31 out of every 100 of us will travel overseas on holidays this year. John Borghetti, CEO of Virgin Airlines, states that recreational airline travel grows between 3 to 4 per cent every year.
- 290,000 home renovations are undertaken nationally every year to update both the design and value of the home.
Let’s face it, each of these industries collectively does a great job of presenting an aspirational product.
Their products are all optional purchases, supplied according to budget and specific needs. All are reasonably complex in terms of the manner the respective suppliers quote, not to mention the way they are compared and purchased.
Though most purchases are made by an educated consumer, products from these industries are still dreamt of, aspired to, saved for and planned. And this all takes place long before the execution of the actual purchase.
The automotive industry’s day-to-day focus is only on the in-market customer, the ‘today purchaser’.
The aim is providing a quality point-of-sale experience, a competitive price and a smooth transaction with the result being another satisfied customer in and out of the showroom. A Toyota dealer for example, works hard to ensure his model is on a shopping list against comparable models of competing brands, or the same model of the same brand Dealer.
There’s nothing wrong with this strategy.
But what about the great opportunity that the industry has as a whole to broadcast the tangible reward that not only comes from buying a new car, but owning it?
From our industry’s perspective, gaining a greater share of the public’s discretionary spend from other industries will increase volume vehicle unit sales over and above that normally determined by both population increases and economic factors.
A typical metropolitan dealership’s PMA may comprise 60,000 households. What if only 2 per cent – or 1,200 households every month decide a quality-built, brand new car will be a better purchase than a pool. Or who’ll delay overseas travel in favour of a new vehicle purchase, or decide that the bathroom and kitchen are not that bad after all?
The core appeal of car ownership has changed over the years.
A hundred years ago it was a romantic notion to own a horseless carriage, later becoming a status symbol through the mid-century and then a reflection of style through the 70’s era.
Now the overwhelming majority of households choose cars for their affordability, practicality, technology, design, safety and economy.
Nevertheless, most people love their cars and the choice to purchase still remains a highly emotional one. Some give their cars nicknames and others ensure that the brand they choose perfectly reflects their personality.
So, how do we as an industry achieve greater priority over other big ticket purchases? How do we increase our share of winning the significant decisions made in Australian households that shape the way they operate? Does the motor industry need an ongoing branding and information campaign that reminds Aussie car buyers of the importance of updating their motor vehicle?
Why would the motor industry do this, and what is the benefit for car buyers?
If the lifecycle of a new motor vehicle was reduced by one or two years, this would result in a huge increase in total motor vehicle sales per annum. With that challenge before us, this is a clear opportunity to increase growth for the industry in a country that struggles with a small population by global standards, mixed in with a large number of competing car brands.
Updating a new car more often also promotes a cleaner environment – with more efficient cars reducing emissions and making for a better quality of life.
The Australian motoring public understands that a car is a depreciating asset. The longer you keep it, the less it’s worth. Increasing the buying cycle by 1 to 2 years will, in many cases, create forced savings and build equity in a better asset – rather than sitting on a car until it’s worth little.
In the end, the challenge is to put the motor vehicle front and centre in the minds of everyday buyers. Not OEM style branding – but valuable information of the benefits of having the latest motor vehicle. Improving the frequency of the buying cycle will ensure priority purchasing, increase volume sales, and see both car owners and car dealers with more money in the bank.