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In a Boston Consulting Group survey that gauged consumer sentiment April 24-27, 81 percent of respondents believed there would be a recession. Going further, 56 percent said they were concerned about personal finances, while 61 percent believed COVID-19 would change their behavior permanently.
Just 36 percent said their spending habits would quickly return to normal after the coronavirus was under control.
Acceptance of typical car pitches “will depend on how consumer sentiment evolves and how the economic situation evolves,” Lara Koslow, a senior partner at Boston Consulting, told Automotive News. “I think there are two factors in play with regard to consumer sentiment. There’s the sentiment around the virus, and how do I feel about my health and safety and pursuing activities and a more normal daily life, and then there’s sentiment around the recession and my financial security. We still don’t know exactly how those two things will play out over time.”
Koslow said sentiment is still poor, but the group’s data show consumers believe the worst of the coronavirus is over.
The timing of a shift back to routine advertising will depend on several factors.
“Thinking through the messages around how you come out in the market, and [ensuring ads] are thoughtful and considering the context of the market during that recovery period will be critical,” Koslow said. “The timing, I think, really depends on when government restrictions are lifted and how that consumer sentiment evolves.”
J. Walker Smith, chief knowledge officer at data and consulting company Kantar, said the economy will need to get back on track before auto advertisers return to their old formulas.
“It’s going to take us until 2022 to get back to the trend line from last year,” Smith said. “We’re in this now for a couple of years of catch-up. But once we get onto a growth track, which is probably end of the year [or] beginning of next year — the turnover in the model season — then it might be time to just think about that again.”