Analysis across industries suggests the global auto industry is emerging as a relatively strong performer in the recovery from the pandemic.  The automotive sector’s level of overall activity in Q2 of 2021 overall activity in Q2 of 2021 was running well above pre-Covid levels (measured in Q4 2019) and ahead of most other industrial sectors measured. Activity levels in the sector were 33.1% higher than they were at the end of 2019 before the pandemic impacted economies across the world.

Furthermore, the automotive industry is disrupted by the four megatrends – connected, autonomous, electric, and shared driving – causing an unprecedented technology and business model transformation. Amid this transformation, there are bright prospects for electrified vehicles in the context of a green recovery to lift projections for the sector. The speed of adoption of these new trends is accelerating fast and industry players must develop the capabilities to quickly identify how to renew and communicate in the “new normal”.

Oil and the Rise of Electric Cars

Whilst oil still constitutes the main source of national revenue and domestic fuel of Arabian Gulf countries, new renewable energy and clean transportation technologies, economic and energy diversification, concerns about pollution and climate change, and support for sustainable growth are now driving the new economic agenda of many of the oil-rich Arab countries.  In the Middle East region, countries like Saudi Arabia and the United Arab Emirates, are becoming early adopters of electric vehicles.

Saudi Arabia said that at least 30% of cars in its capital would be electric by 2030, as the Kingdom pursues a net zero goal by 2060.  Saudi Arabia’s sovereign wealth fund has been investing in EVs for several years, including in Tesla rival Lucid Motors Inc.  Growing infrastructure development in the country will drive the Electric Commercial Vehicle Market.  The Middle-East and African electric vehicle market was valued at USD 35 million in 2020, and it is expected to reach USD 84 million by 2026, registering a CAGR of over 15% during the forecast period (2021 – 2026).

The Changing Landscape of the Industry

The automotive industry has experienced disruption with external factors driving change, from new entrants to government legislation, but the biggest is new technology coupled with consumers’ ever-increasing expectations of how they want to experience a car brand.  Communicators need to be ready for ever-shifting consumer perceptions. Post Covid-19 consumers want to know what brands are doing to reduce emissions and prevent climate change, and how that applies to the car and company’s conduct.

7-Steps for Seamless Transformation

While preferences among consumers vary regionally and nationally, the constant is that innovating brands can’t forget the importance of ethics and purpose. Having worked with top international automotive companies, W7Worldwide has formulated this 7-Step guide to help translate the current transformation into your auto brand’s communications strategy:

1. Brand Purpose

It’s not enough to talk about your car’s range, features, or sustainable material. Brands must illustrate the impact their investments have on consumers and society to connect the emotional and rational.  This means telling brand stories around your purpose, both in the context of the product and outside of it.  Auto brands must clearly communicate their product and brand value, so people see how it fits with and enhances society and their lives.

Communicators need to expand the brand story beyond the product, so people see and understand how and why a brand behaves in the way it does. By telling the story this way, a car brand connects the rational and the emotional drivers to build a deeper connection with the consumer.

Responsibility and Humanity will become strategic drivers for brand resilience in the years to come.  Common purpose is emerging from the world living through the Covid-19 pandemic. Brands need to tap into this common purpose and consider how their customers use, advocate, or connect with their product. Brand purpose does not come from considering how to message customers. Brand purpose goes beyond messaging. It allows brands to have relevant, meaningful interactions with customers at each step of their decision journey.

2. Building Trust

 As consumer behaviour continues to change and become an increasingly online experience, auto brands need to find new ways of connecting with their customers. A good PR campaign helps you reach out to your target audience and bring in new buyers. Not only does it bring their attention to your brand, but if done properly, it will also make them want to learn more about you.

Building trust gives a brand advantage in telling its story in times of crisis and turning stakeholders into advocates.  The greater the trust in your brand, the better it can withstand potential failures, missteps and even brand sabotage.  Trust in a brand also means that we are willing to recommend it. This is the ultimate compliment that a loyal customer can pay: making someone else aware of their trust and letting them know that it is okay for them to trust the brand as well.  Today, if a brand behaves in a way that suggests the customer’s trust is misplaced, it will terminate the relationship quickly and decisively.  For more information also see W7Worldwide’s ‘7 Steps to Brand Resilience in Covid-19’ Guide.

3. Innovation & Leadership

For any auto brand to lead the transformation in this sector, communicators must understand how to tell their innovation story credibly. Being seen as innovative is crucial for success in this market.  The challenge for brands is innovating while proving the everyday benefits of their brand to consumers. Being viewed as cutting-edge leads to positive brand outcomes in areas that go beyond product. The positive outcomes “beyond product” are, being more likely to be loved, being seen as delivering amazing customer experiences, and being seen as doing good in society.

Consumers are not only concerned with your brand’s response to external challenges. Executives working at auto brands play a role in shaping a consumer’s perception. In the post-Covid environment, reputation is everything and key executives can make or break brand images because they play a key role in communicating a company’s moral compass.  Leadership from the CEO will be key to establishing the components of a transformation with a new business model, and the ability to scale fast.

4. Lobbying

 The auto industry is innovating at such a speed that technology is ahead of the readiness of infrastructure and legislation in many countries. Pressure is coming from both society and governments, which forces companies to rethink their business practices. However, little is known on how to integrate the physical environment into business strategies, as it never has been done before. The car industry is one of the most proactive industries when it comes to environmental progress.

Decarbonization is a pressing problem to which there are high expectations to find solutions and car makers are very much part of the solution in making progress toward achieving this aim. Fostering innovation is a priority for the government, ensuring that the auto-industry continues to deliver economic prosperity and a competitive edge in technological development. Ensure that your company is part of the industry debate and government policy reshaping that sees your organization be part of the solution to the challenges of today.  For more information see also W7Worldwide’s 7-step guide for companies to build their COVID-19 Recovery Public Affairs Programme.

5. Leverage Digital Channels

 Having a multi-channel strategy will extend your reach to a wider demographic. Accelerated by the pandemic, a large portion of the population takes a digital-first approach. Tracking and understanding the customer journey should be the basis of your communications strategy. It is crucial to know as much and as many of your customers as possible before developing your campaigns.  Industry players are shifting to digital communication strategies as consumers are utilizing multiple online platforms through their purchases. 95% of prospective buyers do their research online before visiting a physical dealer. Users are taking an active role in their purchase process today.  Shoppers are particularly turning to online videos for their research to discover, learn and compare before making a purchase.

Online customer reviews are critical in helping with the decision-making process. The car-buyer will be reading reviews on channels such as YouTube, Google, and other review sites.

It is vital to have positive sentiments about your brand and product as shoppers trust reviews. Equally, shoppers, today are expecting ease of connectivity for dialogue with businesses across digital channels. This emphasizes the importance of employing various platforms to ensure that customers can get in touch through the channels they prefer. 

6. Right Message to the Right Audience

There are certain key automotive marketing messages that help consumers make their purchasing decision.  These are Price, Safety, Status, Tech & features, fun & lifestyle, and environmental.  Using digital monitoring and measurement tools, brands need to identify and understand their audience to provide them with relevant personalised communications.

While price-driven messages and impact videos of cars showing off its features and performance remain relevant, consumers are now seeking much more. This means going beyond traditional automotive marketing techniques to create more emotive content and crafting different environmental or safety messages to appeal to different communities or demographics.  We know that different audiences respond to different messages particularly in the digital space, so targeted content is necessary to reach potential consumers at the right time on the right channel with the right message.  After all, a new car is second only to a new home in the size of the transaction, the length of the ownership cycle, and the reaffirmation of an individual’s sense of self-worth.

Communicators need to formulate their strategies and campaigns to be driven by a strong combination of data insight and creativity. Branding strategy development, therefore, requires identifying the potential customers and dividing them into segments in order to understand the basic behaviours of those customers and develop an effective branding strategy that speaks to them.

7. Transitioning to the New Future

While regional and everyday mobility is slowly returning to pre-COVID-19 levels, the situation remains changeable amid the ongoing pandemic, and the automotive industry must now navigate an emerging and very different “new normal.” The supply of semiconductors has been volatile, with the auto industry being hit particularly hard. At the same time, sustainability and decarbonization of the overall supply chain require a significant review of existing industry processes.

Much the same as many other industries across the globe, the pandemic accelerated the trends across technology innovation that were already emerging. Mobility will continue to become more digital, more connected, and particularly more electric. Consumers who factored sustainability into their buying decisions helped electric vehicle sales increase by 43 percent in 2020. Governments and cities have introduced regulations and incentives to accelerate the shift to sustainable mobility. Regulators worldwide are defining more stringent emissions targets as part of their country’s respective COP26 commitments. On the local level, many cities are pushing ahead with regulations on car usage.

It is an industry transformation taking place at an unprecedented speed that is crossing industry sectors, involving energy, infrastructure, mobility, and automotive players. The current transformation represents a huge opportunity for existing and new brands to take a leading role in creating new industries and jobs. This can be achieved by coupling sustainability with economic viability through innovative technology.

The current challenge is to be able to balance the new demands of consumers, the contribution to slow climate change, and the new skills automakers need to deal with these shifts. Whilst car makers used to compete mainly on their engineering capabilities, superior performance, and reliability, the qualities that matter now are driven by the customer experience.  Tangible product differentiation is both critical to success and difficult to maintain on a sustained basis. A key focus of the marketing function should be to rigorously understand consumers’ preferences, unmet needs, and willingness to pay.

Moving Forward

Since changes in mobility require changes in capabilities, it’s also clear that automakers will have to adjust their organizations, such as ramping up the number of software engineers.  Automakers may need to reskill up to one-quarter of their current workforce. These trends will continue to accelerate as the industry moves on from the COVID-19 crisis.  Consumers base their understanding of an automotive brand’s value on their accumulated experience with that brand’s products. If you want to change the brand, you need to change the product to keep pace with new tech-led, data-rich, electric vehicle manufacturers.