2022 Local Automotive Advertising Outlook: Four key reasons for local car dealerships to continue advertising


The past two years have been the most dizzying in automotive history.  Inventories plummeted, prices skyrocketed and profits soared. In April 2020, the Seasonally Adjusted Annual Sales Rate (SAAR) for light vehicles hit the lowest level since tracking began 46 years ago. A year later, it rose to the highest in 16 years and the sixth highest ever recorded. Then inventory crisis began. In May 2021, the sales-to-inventory ratio fell below 1, meaning dealers were selling more vehicles than they were receiving on their lots. By Christmas, the average dealer had enough new cars to sustain just 15 days of sales.

As 2022 begins, the automotive sector poses the same conundrum as real estate:  advertising seems unnecessary when units sell within days of becoming available.  For that reason, dealers average advertising expenditure per new vehicle plummeted from $640 in 2020 to $541 in 2021.  Among local media, the pain was felt mainly by radio and TV, who continue to be key beneficiaries of manufacturers’ co-op programs.  But co-op and manufacturers’ incentive programs quickly dried up in 2021.

In Borrell’s newly released “2022 Local Automotive Advertising Outlook,” we outlined four key reasons for local car dealerships to continue advertising.  Simply put, they need to rebrand themselves.

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