This Christmas, Automakers Won’t Be Putting A Bow On Holiday Sales - Forbes

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Some images from the last two decades of automakers’ winter-holiday sales have become as iconic to today’s American consumers as Norelco’s Santa Claus and Budweiser’s Clydesdales were in last century’s Yuletide advertising.

Lexus introduced its huge red bow and Christmas sales event in the late ‘90s, and its re-appearance on a new model in the driveway each year thereafter became an advertising staple of the season. It even reached a level of cultural saturation that Saturday Night Live parodied it last year.

But now there’s a Grinch in town likely to steal Lexus’s “December to Remember” as we remember it: the microchip shortage and resulting sparse availability of new autos across the United States. This supply-chain plague keeps worsening, dramatically shrinking the playbook for OEM marketing executives and auto dealers who want to keep their messaging relevant as the typically important holiday selling season nears.

Clearly, the prospect of using aggressive, inventory-clearing, end-of-year sales events is endangered for 2021, because there are relatively few vehicles left on dealer lots that need clearing — especially at discounted prices that always have been a prominent feature of the Christmas campaigns.

In their place, industry marketing executives told me, will be a pastiche of brand-focused campaigns, promotions of new vehicles coming next year, and Tier 2 marketing efforts by dealers who’ve mostly yet to figure out how to put a figurative red bow on what will be essentially a lost season — a period that, recently, has accounted for as much as 15% of the annual sales of luxury brands.

Consider Honda, whose “Happy Honda Days” clear-out has become a seasonal fixture. “I’m not sure if it really makes sense for us to do it,” Jay Joseph, CMO of American Honda, told me, though the company is “still deciding” that issue. “Until we have confidence that we have nore normalized supply, sales events probably don’t make a ton of sense. We were already soft on summer selling events, and we see no reason to jump back into that.”

The “call to action” for Happy Honda Days was “typically, ‘Now is the best time to buy a Honda,’ and telling people this is a good time to get a deal at year’s end, but that’s very likely not the case now. Cars generally are going for the [manufacturer’s suggested retail price] or better, so if that message won’t ring true, then we need to adapt it to set reasonable expectations.

“We just don’t need to go lower-funnel right now.”

Honda will be adapting, Joseph said, in part by continuing to make the Happy Honda Days theme available to its dealers and their local associations who may have local market conditions that enable price promotions and could leverage the theme. Also, Honda has launched a brand-focused new marketing campaign, “The Origin of Determination,” that emphasizes the overall values of innovation, adaptation, quality, safety and reliability through creative that displays decades of Honda vehicles that provide all of those brand attributes.

Suzy Deering, Ford’s CMO, told me that the Ford brand will use the holiday season this year mainly to promote major new or revised products including its new Ford Maverick mid-size, full-hybrid pickup truck. Last year, Deering noted, Ford used Christmastime marketing to promote the launch of its Mustang Mach-E all-electric model. “We’ll still be very active in keeping Ford top of mind,” she said.

Lexus, for its part, likewise has indicated that December to Remember is endangered this year, as is the Toyotathon year-end sale for Toyota Motor Co.’s eponymous brand. But given the unique role that Lexus had in creating and sustaining a holiday-sales promotion that turned the industry’s previous calendar upside-down, its executives may try harder than other brands’ leaders to keep the tradition going.

“I think we’re still going to do it, I just think what we do [this year] will be less,” Andrew Gilleland, head of the Lexus Division, told Automotive News. ”We’re still going to have cars available, it’s just not going to be our typical 15 to 30 days’ supply; it might be more 10 to 12 days.”

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