Why This has Been the Slowest Year for Car Sales Since 2013 and How to Combat Low Sales


CNBC reports this has been the slowest year for car sales since 2013. Statistics show July is going to be the 7th consecutive month of declining sales according to Automotive News. Further projections show the final quarter of 2019 is expected to be no different as sales continue to drop. What has brought car sales to such a low? What can car dealers do to combat such dismal projections?

The low car sales were less than a shock to the automotive industry. Many economists blame tariffs, trends, and the longevity of modern cars. Firstly, tariffs have increased on foreign goods and the car industry seems to be the main target for such tariffs. These tariffs have led automotive manufacturers to close plants, open new ones, and relocate others. According to NADA, this has caused car prices to increase, particularly new cars which brings me to the second cause of the automotive slow-down: trends.

There are three main trends that are to blame for the decrease in automotive sales. The first being, the shift from buying new cars to buying used cars. According to NBC News, new car sales have decreased and this is likely due to the increase in new car prices caused by tariffs, the increase in car loan interest rates, and the longevity of cars on the road today. The lack of new car sales has made it nearly impossible for most dealers to meet their new car sales objectives and make way for next years models on their lots.

The second trend that has had a huge effect on the automotive industry is the shift in consumer tastes from sedans to SUVs according to the Wall Street Journal. This is another trend that has driven up new car prices due to the increase in manufacturing costs from transforming sedan producing plants into SUV producing plants. This trend has also led many car manufacturers to completely change their model line up and eliminate previously successful sedan models to make way for new, innovative SUVs.

The final trend that has impacted the automotive industry is the consumer push to fully autonomous driving cars. This has made R&D for many companies to sky-rocket as they race to find the technology that makes self-driving cars possible. Some manufacturers have invested billions at a time when car sales are slowing down hoping they make the first break in autonomous driving to create a catalyst for increasing new car sales and salvaging the car industry. “The automakers that can successfully build up their AV capabilities will be in line to take advantage of a lucrative opportunity — the global AV market is expected to grow at a compound annual growth rate of 39%, from $54 billion in 2019 to $557 billion by 2026”, according to Business Insider.

So, car sales are low and are likely going to decrease even further as 4th quarter approaches and the end of the year nears. What can you, as a dealer, do to fight the downswing in the automotive industry? There are 3 proven, fool-proof, solutions that always produce a high ROI, regardless of the state of the economy.

The first solution is direct mail. Although, many perceive direct mail as an outdated form of marketing direct mail is 36 times more effective than email according to Forbes. Direct mail also has a higher ROI than any form of digital marketing. You may think “well, my dealership wants to target millennials and direct mail won’t reach them the same way digital marketing will.” You may be surprised to learn, according to Forbes, direct mail is more effective on Millennials than any other generation. Millennials have become nearly immune to digital marketing the same way many people become immune to billboards on a road trip; once you see so many of them you start to see none of them. Direct mail is different, unlike most forms of marketing, like TV, radio, SMO, email, and SEO, you can physically touch direct mail and that is what makes it so effective and memorable.

The next solution is community involvement. Getting your community involved and familiar with your dealership builds trust, increases customer retention, and improves brand awareness. There are many ways to be involved in your community, from sponsoring local sports teams to attending community events; but the most effective way is to bring them to your dealership with your own event. Open your doors and offer something of value to your community; like a screening of a movie, a season kick-off family event, or a small prize giveaway of some kind. All of these will strengthen your connection with your community and help you beat out the slow season.

Lastly, the most effective way to combat the upcoming slow sales is to combine direct mail and community involvement with a staffed event. A staffed event with Pinnacle Sales and Mail allows dealerships to bring in up to 100 potential customers a day with a direct mail campaign and build community relationships with the offer of a free gift to those who bring the mailer into the dealership. Our events can also triple new car sales and move up to 50% of your used car inventory in a single event.

Give us a call at 888-524-4563 to schedule your next Pinnacle event today and turn the slowing season into a growing season! Visit our website to learn more about what we do, meet our team, and watch video testimonials from our satisfied clients!

Works Cited:

https://www.cnbc.com/2019/04/01/auto-sales-slow-to-lowest-level-in-four-years-despite-truck-demand.html

https://www.autonews.com/retail/us-sales-may-fall-7th-straight-month

https://www.nada.org/tariffs/

https://www.nbcnews.com/business/autos/automakers-start-sweat-new-car-sales-continue-lag-n988511

https://www.wsj.com/articles/america-has-fallen-out-of-love-with-the-sedan-1535169698

https://www.businessinsider.com/vw-ford-hyundai-uber-autonomous-vehicle-push-2019-6

https://www.forbes.com/sites/forbescommunicationscouncil/2018/09/14/direct-marketing-is-thriving-in-millennial-mailboxes-heres-how-to-make-the-most-of-it/#4981d1646238

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