MadAve Car Crash: Driving Miss Daisy, Crazy
By Richard Fusco
Being a film buff and having run an ad agency servicing a major multi-brand auto dealer group for a few years has given me a chance to see the obstinate nature of automakers (Detroit), its nimble and flexible Local Dealers and the self-serving nature of Madison Avenue. MadAve has often been manipulative in its servicing of these two players. The situation has always reminded me of "Driving Miss Daisy," though in an entirely opposite "alternative universe" kind of way.
"Driving Miss Daisy" is a film about a sometimes difficult but unspoken friendship between "Daisy Werthan" (played by Jessica Tandy) and "Hoke Colburn" (played by Morgan Freeman) which - as art imitates life - is a story of two characters (Detroit and Local Dealers) and how they resolve their differences, finding ways to get along in their mutually dependent predicament on each other and automobiles.
"Boolie," (played by Dan Ackroyd) is Daisy's son and Hoke's employer, yet if you take a cynical view (entirely opposite Ackroyd's character) he provides great metaphor to Madison Avenue's role between Detroit and its Local Dealers. Like Daisy and Hoke, these two players also have a fragile and sometimes difficult relationship. Like MadAve, Boolie has great potential to breed resentment between Daisy, his Mom and Hoke. One example of this is when he tells Hoke, "She can say anything she likes, but she can't fire you."
(Evil) Boolie's Madison Avenue used to be the grease that made the wheels turn between Detroit and its Local Dealers, though that has been changing over time and not for the better. With the dawn of the Internet, the consolidation of multiple auto brand flavors and a large amount of dealer turnover to the next generation, Detroit and its Local Dealers have begun to depend on Madison Avenue much more. Evil Boolie though has done nothing but capitalize on this for its own benefit.
Act 1, Scene 1 (EXTERIOR): After 9/11, Daisy's auto industry feared a major decline in sales. To counter that fear the Big Three offered 0% financing... creating an instant sales spike and a boost in used vehicle inventories especially of relatively new cars and trucks. We all were glued to our seats. Madison Avenue Ad creative was easy... just say 0% and give the dealership address. Hoke's Local Dealers were was almost giddy at the amount of people through the door.
Some buyers came in to take advantage of the unprecedented deals that still owed $6000, $7000, $8000 or more on the car they wanted to trade-in. No problem. Just roll it over into the loan for the new vehicle. New vehicle sales were up with a decent profit margin. Used car lots are full with low mileage cars to attract buyers and there's'a bigger margin for the dealerships on the used cars. Everybody's happy.
Act 1, Scene 2 (INTERIOR): But where can you go after 0%? Boolie's answer: how about cash rebates on top of 0%? Automakers and dealers would have to cut the profit margin but they could make it back on the financing. Another sales spike, more trade-ins, bigger used inventories. When someone comes in and still owing, $7000, $8000, $9000 on their trade-in. No problem. Just extend the loan time to 6 or 7 years.
By now, Madison Avenue's quick solutions, with no focus on the longer term impact their tactics has now created an auto industry with few options infront of it, to keep momentum going.
Act 1, Scene 3 (INTERIOR): The answer? Start pushing SUVs, trucks and luxury cars though consumers expectations are now used to special discounts, which means that Daisy had to increase discounts she would ordinarily give her very own employees. By doing so, she hung Hoke out to dry by cutting the profit on new vehicles to ZERO OR LESS! In this story, Daisy told Hoke to make it up with used vehicles. "You ave a lot of them and used vehicles have a bigger profit margin anyway."
The problem with Daisy's approach to this dramatization is that the three to three and a half-year buying cycle that Hoke could count on like clockwork was totally disrupted. Many, many people have bought new cars a year or two before they would have normally because of the "great deals".
Because many buyers were "upside down" meaning they still owed large amounts on their trade-ins, they wind up paying $45,000 for a car worth $28,500 and are in for 8 years. They won't even be in the market to buy again for 6+ years.
Act 2, Scene 1 (INTERIOR):Used vehicle inventories are bloated with too many cars for too few buyers making it a buyers' market for used cars. Hoke had to sell these low mileage relatively new used cars for what they gave the new cars buyers in trade or less. There's good chance used cars sales will cut into new cars sales especially because used car inventories are so fat especially with low mileage cars and new cars inventories are at all time lows.
Price wise for new vehicles, there was nowhere to go. Daisy may never be able go back to selling cars at regular prices again. There is no doubt that Madison Avenue has addicted car buyers to expect low prices and always be looking for great deal from now on. Attempts to get consumers off the promotional pricing since 911 have met with negative results. The Big Three tried a number of times to scale back on rebates too, but every time they did, sales would drop.
Act 2, Scene 2 (INTERIOR): Now, gas prices have made SUVs, trucks and other gas-guzzlers very undesirable. Boolie's MadAve self-serving approach intentionally igornes the gas shortages of the 1980's. Instead of helping develop new solutions to the market, Madison Avenue supports the Daisy's building bigger and bigger vehicles with bigger and bigger engines. Take a look at the Ford Excursion, Lincoln Navigator or Dodge Durango. They are HUGE.
Daisy is stuck with lots of them and can't gear up production of hybrid vehicles quick enough to have any impact in the short term. Part of the blame for the major increase in the demand of gas and the current cost of gas has to go to the U.S. auto industry. You may or may not know that the auto industry was able to have the SUV identified as a truck not a car because they are built on a truck chassis. This means that the automakers did not have to have SUV's meet the same MPG standards as cars that would have meant extensive, expensive modifications.
Act 2, Scene 3 (EXTERIOR):What was Daisy thinking when she recently prioritized the rollout of her redesigned large SUVs, when consumers where looking for fuel-efficient hybrid technology. GM's emphasis seemed particularly off base, when gasoline first hit $3 a gallon.
At this time of high gas prices which are not likely to go down that much, car buyers will turn to Japanese and Korean vehicles which have the reputation of getting miles per gallon in the high 20's and even low 30's. And some of these cars sell for under $20,000. The U.S. auto industry could suffer and lose market share for many years. As Boolie would say, "You're a doodle Momma," though what Evil Boolie says is, "You're in deep doodle, Momma!"
Add on to all this the fact that Hoke is challenged with the fact that many car buyers now track down specific information for the new or used vehicles they want to buy on the Internet, who know exactly what they want to pay and will not pay a penny more.
Act 3, Scene 1 (INTERIOR): The good news for the auto industry is we are likely just about at the end of the period of "uncertainty, confusion, error, and wild and fierce fanaticism". The bad news is the U.S. auto industry will likely experience a bottoming out before it can regroup and start back up.
Act 3, Scene 2 (EXTERIOR): STORY ENDING TBD
A. Is Daisy's future so bright she doesn't need Hoke to drive her around anymore? No. Will she need to continue cutting inventory, production, lay-off workers and decrease purchase of materials effecting other industries and our overall economy? Yes.
B. Should Boolie escape the blame for his irresponsibility in this farce of a story? No.
C. Will some/many of Hoke's Local Dealers suffer and/or go belly up? Yes.
Act 3, Scene 3 (INTERIOR): POSSIBLE ENDING. Hollywood and film goers hate sad endings though it's impossible to imagine right now how "Driving Miss Daisy" will become nothing but "Crazy" if Boolie doesn't get his act together with less self-serving solutions. Let's hope a little of Dan Ackroyd's Boolie rubs off on the evil MadAve Boolie so Daisy and Hoke can avoid a possible car crash on their long journey to Mobile.
Richard Fusco (845 679-4473, firstname.lastname@example.org) is a new media consultant based in Woodstock, New York. His background includes radio programming, the music industry, the Internet, streaming media, iTV, targeted streaming ad insertion, content production/distribution and marketing/advertising strategies and creative for the emerging podcasting environment.