||Dealers Adjust Advertising as Earthquake Impacts Inventory
Some U.S. dealers are altering their local advertising plans as parts shortages and production cuts stemming from the March 11 Japanese earthquake and tsunami have caused inventories to shrink.
Though some Toyota, Honda and Nissan dealers are continuing with their planned ad campaigns, others are canceling campaigns, cutting back or shifting their resources to deal with the fewer cars that are on their lots.
Allen Foster, general manager of Smart Toyota in Madison, Wis., said the dealership would cut back on about 25 percent of its call-to-action marketing and focus its resources on cars that it actually has in stock.
The dealership, which is out of Priuses and running low on Corollas, is going to shift its advertising focus to other models that have adequate inventory, Foster said.
"What we need to do in the meantime is make the best deal with the inventory we have," Foster said. "The shelves aren't totally bare."
Tom Rudnai, president of Longo Toyota in suburban Los Angeles, the largest Toyota dealership in the world, said the dealership, owned by Penske Automotive Group Inc., would feature a different type of campaign than it usually runs during the busy summer months.
Rundai said the dealership would "focus on a 'why buy at Longo' campaign, not a campaign focused on a deal."
Performance Automotive Group, which has 15 dealerships in Kansas, Missouri and Nebraska, may shift some of its media buys to later in the summer when more cars will be available from manufacturers, President Mickey Anderson said.
April sales at the group's Toyota, Lexus, Scion and Honda dealerships were strong, and Anderson said he is watching sales and inventory closely. He added that the group had no plans to increase advertising for its other dealerships -- which include Chrysler, Dodge, Ford and Jeep stores -- to accommodate for the Japanese inventory shortages.
AutoNation Inc., the largest automotive retailer in the country, is changing some radio spots initially meant to promote Japanese-brand stores to advertisements for its Ford or Chevrolet dealerships, The Wall Street Journal reported last week.
Still, Lipton Toyota in Fort Lauderdale, Fla., is continuing with its usual advertisements, President Steve Jensen said.
Jensen said that with a current 90-day supply of vehicles, his dealership has not suffered severely from the shortages. Though he initially held back a bit on advertising to see what consumer demand was like, Jensen said he plans to continue to buy his regular full-page color advertisements in the South Florida Sun-Sentinel newspaper and to send out 25,000 advertisements through the mail for the upcoming Memorial Day holiday.
Jensen, a representative on Toyota's dealer council, said the inventory shortage hasn't stopped most South Florida Toyota dealers from continuing to advertise.
"Right now everyone is still doing it," Jensen said. "Most of the dealers have good inventories."
While some dealers are altering their advertising, Bob Carter, general manager of Toyota Division, said the manufacturer would continue to advertise and offer APR and lease incentives.
"The car business is a game of momentum," Carter said. "Once you have it, it's hard to stop in times of unique availability. We have made some adjustments in timing (of advertising and incentives), but we still will have a strong presence in our marketing."
(Source: Automotive News, 05/19/11)
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