Why Are So Many Automakers in a Hurry to Skip Auto shows?
Is life as we know it coming to an end?by Safet Satara, on
More and more car manufacturers are skipping auto shows. The big three from Germany - Audi, BMW, and Mercedes will skip the next NAIAS. Volkswagen, Ford, Opel, and Volvo, among others, will skip the 2018 Paris Auto Show. This is a worrying trend - one rooted in old-fashioned presentation opportunities that car shows are so fond of following. It may all change, though.
From Abundance to Scarcity
After that 2008-2009 economy crisis hit, it seems that the importance of car shows has been on a steep decline
I remember the first time I attended a car show. It was in Geneva in 2008. A couple of cars stayed permanently embedded in my memory - this was the first time I laid my eyes on the Bugatti Veyron, then the new Volkswagen Scirocco, and even that tiny Toyota iQ. Yet, some things other than cars left a far bigger impression on me. I am not talking about the girls, mind you, but about the sheer abundance of everything. Cars, people, food, drinks, magazines, Chinese spies, new tech gizmos, and numerous companies with products I have never heard of before, or since. At that point, I figured that a car show must be a thing of prestige, an important image building tool obligatory for anyone with a brand to grow or to maintain.
However, after that 2008-2009 economy crisis hit, it seems that the importance of car shows has been on a steep decline. Now, I continued visiting car shows (in Geneva, Paris, Frankfurt, and the like) at least twice a year, closely covering new car unveilings, but also directly witnessing the car show demise. Massive Frankfurt and Paris halls felt a bit empty after 2010. Free drinks, finger food, or lunch invitations became the stuff of legends and press material migrated from dozens of kilograms of carefully decorated, printed material to USB sticks. Car companies were saving money.
Fast forward to 2018.
Car companies that pulled out from the previous NAIAS or have announced they will not attend the 2019 Detroit Auto Show - Audi, Mercedes-Benz, BMW, Porsche, Volvo, Mini, Jaguar, Land Rover, Maserati, Land Rover, Mitsubishi
“NAIAS has been informed by Audi that after a review of its upcoming product launch cycle, it will not be exhibiting at the upcoming 2019 NAIAS in January,” said Max Muncey, spokesman for NAIAS organizer Detroit Auto Dealers Association.
“The ongoing change in the car industry is creating new audiences for Volvo Cars and new ways of bringing products to the market,” says Björn Annwall, vice president-strategy, brand and retail at Volvo. “Automatic attendance at traditional industry events is no longer viable.”
"BMW Group has decided to withdraw from the North American International Auto Show in Detroit," BMW said in a statement.
I could quote a dozen more huge car companies basically saying the same thing - we are not going to attend car shows. Just to put this into perspective, I will list some car companies that pulled out from the previous NAIAS or have announced they will not attend the 2019 Detroit Auto Show - Audi, Mercedes-Benz, BMW, Porsche, Volvo, Mini, Jaguar, Land Rover, Maserati, Land Rover, Mitsubishi and the list goes on.
Car companies seem to exhibit the same patterns of behavior in Europe as well. The 2018 Paris Motor Show will lack the presence of Volkswagen, Ford, Opel, Volvo, Infiniti, Mazda, Mitsubishi, Nissan, and Subaru. The only place where car shows seemingly do flourish is China. Many car manufacturers translated their efforts into satisfying the car craze of such a massive market.
Nevertheless, the western world economic crisis is done with, and car companies survived, some even coming out at the other end with thick bank accounts. Strangely enough, attending car shows does not seem to be at the top of their priority list.
Let me list some probable reasons:
- Car culture as a whole has changed drastically over the past 20 years
- With the development of the Internet and the millennials finally having some money
- Tech has become far more important than before
- Marketing strategies revolving around car shows simply do not make an impact as they once did
- People have already seen almost all cars online even before they reach a car show
Car manufacturers have to reimagine their communication with its customers
Thanks to all of these points, car manufacturers have to reimagine their communication with its customers. Private events, test drives, direct communication, and more intimate relations are key. In short, car shows have become a bit of a burden. A burden that does not bring enough in return.
"Excessive costs and very poor benefits for customer ties and image building simply don’t justify the effort," said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen. "Car shows are doomed unless they find a new approach."
Car Shows Could Make a Glaring Comeback
Car makers are trying to find alternative marketing opportunities to make the biggest impact, while car show organizations are on the verge of reinventing what a car show really is.
Right now, we can witness two trends when it comes to car shows in the world of cars. Firstly, car makers are trying to find alternative marketing opportunities to make the biggest impact, while car show organizations are on the verge of reinventing what a car show really is.
Tesla, for example, aims to present their cars at events where people simply do not expect cars - like at yacht shows. Festivals of speed (like the one in Goodwood), private events, online streamed events, and tech shows are the next important marketing opportunity for car producers.
Heck, the CES has become one of the biggest promoters of car-related tech. Only this year it hosted 300 debuts of car-related tech. An unprecedented number for a show that is closed for public and aimed at consumer electronics. One question posed itself really - will cars become merely consumer electronics? Appliances?
So, yes, car manufacturers are doing their best to find alternatives. And it all comes down to money. Former Cadillac president Johan de Nysschen commented on the issue some time ago. He said, "Auto shows have become very expensive. Just doing press conferences is some staggering cost. I don’t know why they’re that expensive. Show organizers need to take a long, hard look at this."
Car shows cannot make as much of a return on investment for car manufacturers as they once could
Obviously, car shows cannot make as much of a return on investment for car manufacturers as they once could, but that is about to change as some car show organizations are showing they are adapting and going with the times.
The Detroit Auto Show is a prime example. The Detroit Auto Dealers Association (who organizes the show) is looking for a way to reduce costs, adapt better to manufacturers’ car reveal timetables, and to offer better value to both the attendees and the exhibitors. In that regard, some suggest that by 2020, the Detroit Auto Show will move from January to October or June, it will feature far more opportunities for outdoor test drives, and it will become a strong link between potential customers and exhibitors. Furthermore, it will be even more intensive on social media and the Internet overall. Max Muncey, spokesman for NAIAS organizer DADA said:
“Plans are well underway to revolutionize our show and provide participating companies a global stage that delivers cost-effective opportunities to audiences that only Detroit can offer.”
Similar reasoning was witnessed within the organizational boards of other shows. It may just be that a couple of years from now auto shows will transform into prime-time material. Of course, every transition is difficult, this one even more so as fewer manufacturers equal fewer journalists, which results in less coverage, fewer attendees, and eventually, less money. This is one domino effect that auto show organizers must resolve if they want to be a part of the glorious car future to come.
Read more Detroit Auto Show news.
Read more Paris Auto Show news.