2012’S First Blow – MPG vs. FUGP

The tsunami that rocked Japan and eventually disrupted the entire retail automotive market occurred March 11^th of last year, and will undoubtedly be remembered as the Big Blow of 2011.  In my book, the Big Blow of 2010 is The Credit Crunch and for 2009 it could be The Bailout or is it The Subprime Mortgage Crisis that resulted from the 2008 Big Blow which was…I hope you get my point.  There is not dealer I meet with who can’t produce yearly financial statements and show you some ‘car scars’.

So here we are in 2012 and judging from Internet headlines and network TV interviews with economic experts [generally from some ‘Institute’}, we have the first Big Blow of 2012:  MPG VS FUGP!  That’s right, miles per gallon versus fluctuating upward gas prices and yes there are other words to describe this petrol price problem.  But it is what it is and the need for efficient and effective marketing is a necessity today as much as ever.

I wrote earlier about the resilience shown by today’s consumer – confidence is still high, and with the growing number of newly-created jobs  it is not false hope.  And just as we experienced in every FUGP moment, whether it was in 2008 or last year, the consumer will consider more economical transportation as a fallback.  Now look out those big plate glass windows and take heart because you have what the buyers want; at the same time, consider if they are going to shop you or the competition.  Stick to the plan, in fact, pump up the plan to promote hot merchandise.  Absolutely trucks and SUV demand could diminish, but there will still be buyers who need those vehicles.

In my decade of experience, one truth is so rock-solid and I quote, “I have never seen a problem that could not be solved by increased traffic.”  The baseline premise is clear, hot traffic solves cold merchandise.

This is the second in a series on gas prices and how they affect automotive retail.  View part one.