“What a set of circumstances.”
Twenty months after the start of the COVID-19 pandemic, the automobile industry’s agenda appears to be completely upside down. Chip shortages have wreaked havoc on many an automotive brand, including Hyundai.
What’s a broadcast ad sales leader to do? Jason Stein, CEO at Flat Six Media, painted the automotive portrait of today for TVB Forward Conference attendees during a Thursday address.
While Stein’s comments were geared toward the television industry, the radio station owner, manager and sales leader can also glean much from his commentary.
“Call it a ‘New World Disorder,’ dealers have no inventory,” Stein said. “In some states, in some lots, there are 30 cars where there were once 300 on a monthly basis. Dealers could not be possibly making more money than they are off new cars. Funny enough, no one is talking about autonomous technology, at least not as far as the next few years as it originally should have been.”
The latter comment is particularly intriguing for Radio, which has had the specter of the driverless vehicle and the potential impact on AM/FM in-car listening on the horizon for the last several years.
With lessened concern about autonomous cars, now seems like a great time for Radio to launch a multimedia marketing campaign showcasing its reach and benefits to consumers.
The bigger takeaway, however, is the loss of 3 million vehicles from dealerships across North America due to a chip shortage that has led many toward used cars and trucks. “At one Chevy dealer in the Northeast contact recently, there was no inventory,” Stein remarked. “The customer has to settle for whatever we have. Some model lines have had zero production for almost six months and they have nothing to sell in those models.”
Even scarier, General Motors recently noted that just 4 of its 14 North American plants were scheduled to be online. One Ford F150 plant was completely dark, Stein said. Toyota is cutting 80,000 units in North America.
Is there a light at the end of the automotive tunnel? “The prevailing view is that the chip situation will get better, marginally, in the fourth quarter of this year and in the first quarter of next year,” Stein said. “The volatility in production will not see a clear view until the end of 2022 or the first half of 2023.”
That comes from higher discussions with automaker CEOs held over the last few weeks, Stein remarked.
“The bottom line: everything in this world is digitized, all the way from the iPads you have at home to the supermarket fridges,” he concluded. Each require chips — and few are to be had. “Indeed, it is a world of disorder. There could be inventory constraints for a very long time.”
In an earlier session, Hyundai CMO Angela Cepeda spoke at length about the chip challenges. At her company, things are “progressively getting better,” she said. In fact, this year saw five new product launches. “We did not hold back at all,” she noted.
That said, Hyundai will not be securing a Super Bowl advertisement in 2022.
