Positive media coverage will be a driving force for positive results
It’s no secret that 2009 was a brutal year for the automotive industry all across the world. Nowhere was this truer than in North America, and the downturn, as we all know, was particularly gut-wrenching in the United States. Losing 40 percent of your business in a two-year period is an experience no one would volunteer to endure, but that was precisely the reality imposed on the industry in the U.S. in the past two years.
Not surprisingly, when the industry got together a little over a year ago at the 2010 North American International Auto Show in Detroit, the mood was more subdued than in years past, and the media coverage reflected this state of affairs. The media reported a successful, yet “pared down” Detroit Auto Show, normally one of the industry’s biggest showcases of the year anywhere in the world. To read the media’s portrayal of the event was to gain an impression of an industry doing little more than going through the motions.
What a difference a year makes
Though no one is quite ready to declare the industry’s challenges a thing of the past entirely, the coverage of this year’s event in Detroit could not have contrasted more sharply with the somber mood in 2010.
A quick scan of the headlines surrounding this year’s show reveals words like “optimism”, “resurgence”, “comeback”, “triumphant”, and countless other good-news words. Beneath the surface of these headlines, of course, all is not perfect in Detroit as thousands of jobs lost in the downturn have not returned, and across the country unemployment remains stubbornly high. But the unmistakable atmosphere of optimism that came out of the coverage of Detroit 2011 represents a complete turnaround from the picture painted in 2010.
This is because 2010 did mark a year of recovery not only for our industry, but for many others. There’s a very simple reason people are more optimistic now than they were a year ago: the economy is growing again, and growth fuels optimism, which further contributes to the virtuous circle of optimism-driven recovery. So the happy tone coming out of Detroit is an effect of what happened in 2010. But could the causal relationship run in both directions? Could more positive media coverage help the industry in a meaningful way in its own right?
The answer is an unequivocal yes. People’s purchase decisions are based on dozens of factors, the most important of which is usually cost. But people’s moods – their optimism for the future, of lack thereof – can also help drive an industry such as ours to dizzying heights in boom times and equally shocking lows when things turn for the worse. Markets of all kinds experience booms and busts of epic proportions because they are driven not just by calculating, rational economic machines, but by emotional human beings. Keynes famously called the phenomenon our “animal spirits”, and the past two years have proven that they are alive and well.
Grounds for optimism
Optimism like what we’ve seen coming out of the Detroit show has to be underpinned by something, of course. In this case, it’s a Canadian market that rebounded by 6.6 per cent in 2010, an American one that posted a gain of more than 10 per cent, and a global market that could well sell more than 60 million new vehicles in 2011 for the first time in history. But at a certain point, the very optimism that comes from such hard data helps to sustain the happy trends themselves. Just like apocalyptic headlines in 2009 helped scare millions of would-be and otherwise fully qualified buyers from showroom floors, positive media coverage will be a driving force for positive results in the industry in 2011, if it continues.
Reports of the industry’s death, then, were exaggerated. But the effect of those reports should not be dismissed: they helped contribute to the downturn in 2008 and 2009. But if the coverage coming out of Detroit 2011 is any indication, we should be in for a year of much happier headlines and more confident customers.
