For such a rich and world-famous automotive industry, the absence of a motor show in…
The most important auto show in the world, Frankfurt, is dead. The organizing group VDA (Verband der Automobilindustrie, or Association of the German Automotive Industry) has ended the IAA (Internationale Automobil-Ausstellung, or International Motor Show) reserved for odd years.
Frankfurt was in trouble when Toyota, Renault, Peugeot, Nissan, Fiat and Ferrari pulled out ahead of the show, and Frankfurt became a walking dead man as soon as attendance figures came out: down 31% in 2019, down 40% this decade. What is dead, in fact, is Frankfurt as the show’s long-running site. VDA solicited accommodation offers, got seven offers and will decide between Berlin, Munich and Hamburg. That doesn’t mean the good times will return to another city.
Here’s what we can learn about auto shows from what happened at the Frankfurt Auto Show, as well as the experiences of other shows facing troubled times, including Detroit:
1. No one goes to the World’s Fair anymore.
Auto shows were where you went to learn about automotive advancements. Just as people went to the Universal Exhibition to learn about the march of progress: television broadcasting (New York, 1939), the Big Wheel (Chicago, 1893), the Eiffel Tower (Paris, 1889), the Ford Mustang (New York, 1964). Now all you need to do is fetch a YouTube video. There hasn’t been a World’s Fair in North America since Vancouver 1986 and the most recent ones have expensive nation-building and chest-pounding exercises (much like the Olympics).
If you go to a car show, it is either because of the pleasure of seeing new cars, or because of your children’s enthusiasm for cars, or because you are buying one that you will buy soon. But you probably know the main lines on their appearance and potency.
2. Automakers don’t exhibit where their cars don’t sell
That’s what hurt Detroit. For years, foreign automakers—those headquartered outside the United States—all flocked to Detroit (NAIAS, or North American International Auto Show). They wanted to be part of the excitement for the two or two and a half days, press and charity before the show opened to the public. In Detroit, no matter what Mercedes-Benz showed, local coverage favored the Big Three: Chrysler (at the time), Ford and GM. But then, who would want to write variable valve timing and direct injection in a new Benz when you had Ram (Chrysler) trucks herding cattle past Cobo Hall? It was 2008, the year after Daimler and Chrysler ended their 10-year merger.
Basically, the market share of Audi, BMW, Mercedes-Benz, and Porsche in Michigan rounds up to about, oh, zero percent. So they stopped exhibiting. Some, like Porsche, stopped exhibiting several times. And internationals stopped subscribing cabins which they used for two days and local dealers then used for 10 more days. Detroit might just be the worst auto show for automaker ROI because almost everyone works or has a relative working for one of the automakers and has access to employee/family discounts. The odds are zero that a Chrysler family member will buy an F-150 or a Silverado over a Ram 1500.
Most major auto shows don’t take place either when cars are sold. It’s in the spring. It’s certainly not in the dead of winter, when car dealerships prefer shows to be held, so they can generate a few extra sales in December and January, and then have February sales in honor of – yes, there there’s irony – two of America’s most honest presidents.
3. Auto shows are green, mobility shows (don’t sell out)
In an effort to be forward-looking, auto shows have added components for electrification, sound environmental practices and mobility services such as shared vans. In some places it works (Los Angeles); in others it is not. Anyway, this component is the look-what’s-new part, much like what the World’s Fairs used to be. Most Americans aren’t buying electric vehicles yet, not with sales stuck at less than 2% market share in the United States.
It’s what the media wants to cover (some of us, anyway) but the same things we want don’t have crowds clamoring to see.
4. Buyers don’t like car dealerships
The main reason for the existence of a large auto show is not the press days but the general public days, from Friday to the following Sunday, nine to ten days. This is when the public comes and interacts with representatives of local car dealerships, as well as some representatives of car manufacturers. It’s not clear how much they learn that they didn’t already know online. And it’s unclear how much of the public’s general distaste for the experience of buying cars in auto showrooms carries over to the auto show experience. You can see almost all brands under one roof. At Camp Jeep and a few others, you can do some light off-roading. If the car is popular, you will have to wait in line to sit inside.
Meanwhile, the brochures you might pick up in bulk at the auto show, the same info is online. Inasmuch as auto shows are parent-child bonding times, people born in the past three decades view automobiles as less exciting than their parents did when they were children. It hasn’t gone away completely, but it has slipped enough to affect auto show attendance.
5. Automakers are investing in experiential marketing
Automakers are rethinking where to spend their marketing dollars. They want to focus on the most likely prospects if they can identify them: people who bought a high-end car 2 or 3 years ago, new parents with a second baby on the way and who may have need a safe midsize SUV, someone who googled Tag Heuer and Rolex. So they sponsor music festivals, support charities, and shell out $5 million for a 30-second Super Bowl 54 (2020) spot. Or they invite the best prospects to drive the cars at high speed through a stadium parking lot (speed is relative), give them lunch and a baseball cap, and come back in a few days. They also target demographics that are likely to buy with targeted online ad buying. Those activities have a better return on investment than building a bigger, splashier auto show booth, automakers decide.
What’s on the Horizon?
Auto shows aren’t dead yet. But convention centers that look to auto shows to fill more than two weeks of the calendar (including move-in and tear-down days) need to consider whether they’ll soon be renting only parts of their facilities. in the future.
Ford and Volvo did not exhibit at the Geneva auto show in February. Geneva is an important show because Switzerland, without an automobile industry to speak of, is a neutral territory, unlike Frankfurt.
The United States has three major trade shows: New York, Detroit and Los Angeles; Chicago, Washington and Miami are mid-majors. BMW ended its presence at the New York Auto Show (NYIAS) in 2019. Mercedes-Benz is also stepping down this year. Unlike Michigan, where they sell few cars, the New York Metro is Mercedes’ biggest market. So leaving NYIAS is not for lack of buyers.
Detroit ditched its late-winter date just past CES after 2018. This year’s NAIAS (North American International Auto Show) resumes in June as part of an auto show, d a motorist turnout show, part of the Rite of Spring, June 9-20. There will still be press days, a tech segment called (wait for it) AutoMobili-D, and a public broadcast.
The show to watch as an indicator of US shows is Los Angeles, November 20-29 of this year. California is the automotive capital of the world when it comes to diverse buyer tastes and diverse population. Plus, more high-tech and automotive design work is done in California than anywhere else. And the Los Angeles show saw a booming segment of green tech and sustainable ridesharing that is second to none, called AutoMobility LA. Other than the LA Convention Center, which is dismantled and too small, SoCal is as good a place as any for a forward-looking show.
The latest automotive technology is on display at CES in Las Vegas, and the cars stand out even among the show’s traditional consumer electronics, home automation and burgeoning health-tech exhibits. So far, LA/Automobility LA and CES coexist.
We will have to see how the old Frankfurt performs in Berlin, Munich or Hamburg.