MARKETING
Exploring ways to reach customers. (www.technode.com)
The coronavirus has forced temporary, extended closures to many ‘bricks and mortar’ stores in the EU and US that brands, including automotive ones (read: dealerships), relied heavily on as their primary customer touchpoint and sales channel. The closures have made it very challenging for these brands to engage their target market(s).
The brands that have been slow to embrace social media platforms and utilize them as customer engagement tools have seen their brand awareness and consequently sales fall off a cliff during this time. In difficult & uncertain times, when a potential customer’s attention may not be on car shopping, it’s SO important to stay in their consciousness even if just to play defense and not allow other brands to fill the voids that theirs would normally reside.
Here in China, customer engagement via social media has been around for quite some time, long enough that I can confidently say that we’ve reach Social Commerce 2.0, even 3.0. Platforms like Douyin and Kuaishou, two short video platforms, compete toe-to-toe with traditional giants WeChat and Weibo to help brands reach their target markets and that’s just to name a few. There are other platforms that the Tier 2-4 cities prefer as well in addition to those popular in the Tier 1s.
More and more, product launches, promotional events, exciting news, & shows hosted by key opinion leaders (KOLs) are replacing the traditional marketing channels as a way to bring new customers to the brand, create excitement for products, while educating and engaging current customers.
In the West, coronavirus will force brands to embrace digital marketing strategies even more quickly and for companies like Ford, GM, and other OEMs whose annual marketing budgets can reach $2.5-3B / annum, that’s a HUGE shift. For those brands that have been sitting on the social media ‘sidelines’ in the US and EU, I think it’s the right time to make an aggressive move towards utilizing these social media platforms as a primary customer engagement tool.
The most popular platforms in the West include: Instagram, TikTok (the West’s Douyin), Facebook, WhatsApp, YouTube and Snap. This is also where you may need to embrace a fresh new, hungry digital agency that looks at your brand and products in a different lens. One that hopefully the customers you’re engaging sees through as well.
Entire internal marketing organizations who, in the past used media buys (print & tv ads), sponsorships, auto shows and sales promotions, you know the traditional marketing and sales channels for auto that used to drive awareness, engagement and sales, will find that these old ‘tried and true’ channels will quickly lose their effectiveness.
What we’ll also see, as we’ve seen in the software developer space, is that those people & agencies with the experience and knowhow to growth hack, ‘digitally’ engage customers and optimize conversion rates will be in high demand.
Now’s the time so what are you waiting for?
#traditionalmarketing #digitalmarketing #customerengagement #newwaytoreachcustomers #socialmedai #socialcommerce #WhatsApp #Snap #Douyin #TikTok #Facebook #YouTube
Deep diving into the apps, and implications of their popularity sliced across multiple dimensions, that dominate around the world. (www.macropolo.com)
To highlight the main points of the study, Facebook the US champion for social media which includes the WhatsApp, Instagram, Messenger and Facebook apps, dominate markets all over the world with the exception of India and China.
Having said that, the diverse set of apps out of China: TikTok & Helo, both from Bytedance, a Shanghai-based tech company make up the predominant share representing China. More importantly, the US’ lead has shrunk substantially from 2015, when TikTok and Helo didn’t exist, to 2019.
There’s more to just users and downloads at stake though since the leaders in this space will also likely play a key role in that country’s soft power and influence abilities in the countries where their technology resonates. We’ll likely find that this competition will continue as current and future US and Chinese tech firms slice up the world in the race to capture the ‘next billion users,’ one app download at a time.
#dominantplayers #USvsChina #softpower #socialmedia #socialcommerce
EVs
A little ‘home’ cooking for the domestic EV makers as the Chinese govt. updates its tax and subsidy policy. (www.electrek.co)
Highlights from the announcements this week about taxes and subsidies:
-
After extending the subsidies for 2 years last month, the subsidies were originally set to expire by the end of this year, the Chinese govt. decided to cut the amount of the subsidy by 10% this year starting in June.
-
A tax exemption of 10% on NEV purchases has been extended for the next two years.
-
Subsidies will be capped at vehicles costing.
With current prices starting at 323K, the Tesla Model 3 wouldn’t have been eligible for the subsidy but during their earnings call today / last night, Elon mentioned that they’d be lowering the price of the Model 3 in order for it to be eligible. It’s likely that they’ll also try to set the starting price of the Model Y at or just below that 300K RMB when it launches later this year in China. Once localized though, the cost savings should more than offset the small price adjustment since there is a great deal of overlap in part numbers for the Model 3 & Y as I understand it.
The peculiar thing is that NIO’s vehicles wouldn’t be eligible either since both the ES6 & ES8 starting prices are >300K as well, but there’s a carve out to the updated policy which allows for the subsidy for NEVs that utilize battery swapping technology which only BAIC and NIO do.
#taxbreak #subsidy #carveout #protectionism #Tesla #NIO #extrahelp #NEVs
All part of Tesla’s grand plan. (www.engadget.com)
For my devoted subscribers who’ve been around a while, you may have read in past newsletters about how we are seeing Tesla’s strategy as it’s executed in real time. As I see it, one of Tesla’s main growth and business objectives is to build up its ‘install base’ by selling more vehicles, a business model more akin to Silicon Valley than Detroit, with their introduction of Model’s 3, Y and the Cybertruck – ALL vehicles priced well below their initial products the Model S & X hence more affordable to a larger share of the China, EU and US markets.
Their ability to sell hundreds of thousands of those vehicles each year allows them to have a captive audience for paid services they plan on providing for that install base. The just introduced subscription service for their Autopilot is just the latest example and realization of this strategy.
Since they design, develop and ‘own’ the entire technology stack of their products, as opposed to licensing a platform from a technology partner, they keep all the spoils (read: revenue) generated by each new service. Further, as vehicles move towards ‘commodity’ status over the next 7-10 years, Tesla could sell their vehicles at or close to cost to further build out their install base and build on their revenue by the intro’ing new one-time purchases and recurring subscription services.
This is where many of the OEMs really need to think long and hard about partnering with one of the big tech firms. If they decide to concede ownership of the software to external technology partners, are they really in the driver’s seat when it comes time to introduce new products and services?
The alternate path of designing and developing software in-house is not an easy one for them either since none of the OEMs currently possess the technical expertise to design and develop from the ground up a platform that would be scalable, user experience oriented and bug free.
#Tesla #driverassistsubscriptionservice #technologypartner #caveatemptor #OEMsthinklongandhard
AVs
AV Startups already had it tough, then came coronavirus. (www.bloomberg.com)
This is less article and more roundtable with folks from a few of the more notable American autonomous vehicle (AV) startups such as Aurora, Waymo, and Voyage Auto to name a few.
Key takeaways:
-
Even without real miles ridden as AVs are shelved due to the coronavirus, simulations keep the learning going.
-
There is consensus acknowledgement that AV startups were struggling with funding and managing cash burn rates even before coronavirus showed up and that the increased struggles will most definitely lead to consolidations.
-
There were no automakers in the panel so you may take this with a grain of salt, but a few panelists thought that the automakers struggling to get their global sales back (see Ford) may have to make some tough decisions about their internal AV programs, a couple alluding to the fact that automakers may even consider cutting their AV programs altogether.
-
Coronavirus on the sharing economy: There were more diverse opinions about this subject with one panelist saying that it’ll be a small blip and that people will get back to using ridehailing services; another commenting that the sharing economy may NEVER get back to the pre-coronavirus levels because people will never again be 100% comfortable sharing a car with a stranger.
#AVRoundtable #lotsofopininons #nooneknows #yourguessasgoodasmine #uncertainty #consolidations #longrunway
CORONAVIRUS
Singapore’s opportunity to update it’s transportation system. (www.straitstimes.com)
With less than half the number of cars on the road as normal due to the Singaporean government declaring that it’s almost 6 million inhabitants should ‘shelter at home,’ the author posits that now seems like as good a time as any to study how people currently move from point A to point B and rethink their entire transportation system. It would also mean that they could incorporate how the number of passengers, drivers and vehicles would change permanently because of the coronavirus.
The completely revamped system would increase efficiency to the public system, better meet demand with supply for point-to-point (read: taxis & ride-hailing) private system, and incorporate bike riding and / or other forms of transport into the currently passenger vehicle dominated roads. If Singapore were able to accomplish this, the outcome would likely mean an overall reduction in the number of cars on the road, consequently reducing pollution and traffic, while making it safer and less expensive worthy outcomes that I think many cities would welcome.
Times like these are unprecedented because transportation systems, a city’s, state’s, even a country’s usually NEVER has such a prolonged period of underutilization. What does normally happen is that as more and more people burden the system, band-aid solutions are implemented to try to resolve a narrowly defined problem. The solution once implemented, in many instances adversely affects other aspects of the entire system.
What the author has articulated isn’t that different from the challenges other cities around the world face. Unfortunately, I don’t hold out much hope that many of these cities will take this valuable opportunity to ‘revolutionize’ how people and things get around in their city locality. I hope I am wrong …and I’ll highlight in future newsletters the cities that do.
#Singapore #shelterinplace #revolution #rethinkingthetransportationsystem #onetimeopportunity