Given that the bailouts of Chrysler and General Motors are taxpayer funded, U.S. consumers have a vested interest in the future of both companies. The future of Chrysler/Fiat in particular is a widely discussed topic on the Web, with both enthusiasts and the general population having polarizing viewpoints. Chrysler, Dodge & Jeep enthusiasts acknowledge the need for smaller vehicles, better technology and stronger leadership from Fiat. However, at the same time, they fear losing vehicles and engine choices from the current line-up, particularly the Hemi engine.

There is also a lot of speculation concerning Chrysler’s future involvement in motorsports and many people have commented on their dislike for the potential Jeep Panda.

When looking at discussions by Chrylser owners and enthusiast on Chrysler-centric sites, we found there are some general themes that permeate the conversations:

1. 22 percent of people on these sites fear that Fiat will discontinue the Hemi engine specifically, as well as discontinue more performance-oriented vehicles like the Challenger

2. 28 percent reference small or fuel-efficient vehicles that Fiat is expected to add to the Chrysler lineup

3. 14 percent discuss government involvement and potential product restrictions

When broadening the audience, we found that one-third (33 percent) of the general population is skeptical on whether Fiat will be able to turn Chrysler around based on the fact that both companies are notorious for poor quality issues. They are also concerned that Fiat might only be using Chrysler as a means to an end. However, an additional third of the population believes the relationship will lead to exciting new offerings for the U.S. market.

1. 45 percent speculate or share hopes about post-merger offerings, with some being very hopeful of Alfa Romeo vehicles making their way to U.S. dealers

2. 13 percent hope that the partnership will work in Chrysler’s favor and will revive the business and bring about long-term success

3. Fiat has a reputation for poor quality among some consumers, as does Chrysler - leading some to question the benefits of this alliance

When Fiat & Chrysler begin to launch new vehicles, it is imperative that they devise a solid plan to address quality issues/perceptions - an important brand pillar that has been eroded by past negative experiences. If quality and reliability are left unaddressed, the likelihood of drawing serious new vehicle shoppers will be impacted. General Motors learned this lesson the hard way and are still plagued with this negative perception that continues to detract shoppers from buying their vehicles.

In the words of George Santayana “Those who cannot learn from history are doomed to repeat it”.

Source: Nielsen BuzzMetrics & TagCrowd

The automotive industry was hit by a Mack truck in the second half of 2008 amid all-time high gas prices, a shrinking economy and growing consumer fear of making a large purchase. Advertising spend reflects how the automotive industry reacted to the crisis and begins to highlight channels that are the most vital to intercepting new vehicle prospects.

The first half of 2008 showed growth in advertising spend over 2007 for TV (+2%) and Internet (+55%) while Outdoor, Magazine, Radio and Paper decreased (20%, 18%, 14%, and 4%, respectively). The second half of 2008 yielded lower advertising spend over 2007 for all channels. Radio and Paper took the biggest hits with decreases of 42% and 40% while Internet exhibited a similar level of spend vs. 2007 with only a 0.5% decrease. Overall automotive advertising spend decreased 8.2% from 2007 to 2008 with the Internet being the only channel to witness growth.

Trended on a monthly basis, automotive Internet advertising was outpacing 2007 until October 2008 when the brakes were applied and it dipped below 2007 for the first time. Automotive Internet spend in 2007 represented 4.6% of total Internet spend while 2008 rose to 5.9%. Acura, Hyundai and Subaru contributed the largest increase in Internet spend from 2007 to 2008 while Mercury, Volvo and Jeep had the largest decrease. Thus far Internet spend for 2009 is gaining momentum again and is forecasted to be on par with Q1 2007 while still slightly below Q1 2008.

The Internet is proving to be a critical strategic channel for automakers and we anticipate this trend to continue. Although TV continues to represent roughly three-quarters of total advertising spend, the Internet is gaining momentum and could likely become the second largest advertising channel by 2010. The key to successful Internet spend in 2009 will be identifying where your target audience goes online and interjecting yourself at the right moment in the vehicle purchase funnel.

One might assume that the unemployment rate at a state level would show a strong negative correlation to the likelihood to purchase a vehicle in the next six months, but this doesn’t appear to be the case. Michigan had the highest unemployment rate at 11.6% in January 2009; however, these residents are slightly over-indexing for the likeliness to purchase a vehicle in the next six months. It’s very interesting that Mississippi is the most likely state to purchase a vehicle and Idaho is the least likely, since both states fall in the middle of the heap for unemployment.

Solely looking at shopping intention by state is too high of a level to glean any actionable insight. However, coupling intention with current vehicle ownership allows for smarter inventory planning and target marketing within each state. Typically, we would be a bit more aggressive and aim to conquest more sales but in the current economic condition we need to be more cognizant of advertising expenditures and ensure a high ROI.

In 2009 it will be imperative that automakers focus on the total customer experience of existing owners and consider developing loyalty programs. It is much easier and cheaper to retain an owner than it is to make a conquest from a competing brand. Nielsen @Plan data is indicating that Oklahoma residents are the second most likely to purchase a vehicle in the next six months and are also over-indexing on owning a Kia vehicle and Compact Sedans/Coupes. There appears to be an opportunity for Kia to gain additional market share within Oklahoma especially with the Optima and Spectra. Lincoln also has an opportunity in Mississippi with an ownership index of 286, while Chrysler may want to reduce their ad spend in this state and shift focus to areas that have a higher concentration of Chrysler owners such as Iowa, Kentucky and Michigan.

In the past year, Nissan N.A. and Ford Motor Co. Web sites are showing signs of increased consumer interest as evidenced by comparing the unique visitors from January 2008 to January 2009. In terms of year-over-year growth in site visitors, Nissan N.A. saw an increase of 14% while Ford Motor Co. showed a 9% increase. Chrysler LLC experienced the steepest decline in site traffic at 26% followed by General Motors (-17%), Toyota Motor Sales (-11%) and Honda Motor Co. (-5%).

In January 2008, visitors to Chrysler LLC sites also visited or overlapped with General Motors sites (24%) followed by Ford Motor Co. (22%), Honda Motor Co. (15%), Toyota Motor Sales (14%) and Nissan N.A. (9%) sites. The overlap landscape has significantly changed for Chrysler in January 2009 as General Motors and Ford Motor Co. are the only automakers to be cross-shopped with 16% and 3% respectively. Further analysis of online discussion reveals that consumer confidence toward Chrysler’s products, leadership and future viability is decreasing, which poses a threat to potential sales.

Interestingly, Ford is showing signs of becoming a stronger competitor to Toyota, Nissan and Honda, while having less audience overlap with Chrysler and General Motors. In January 2008, roughly 15% of consumers that visited a Toyota Motor Sales site also went to a Ford Motor Co. site, while in January 2009 this rose to 20%. Nissan N.A. sites witnessed a similar overlap increase from 20% to 27% with Ford Motor Co.

Is this change in consumer behavior due to Ford’s improved products, a sign of consumer confidence that Ford refused to receive any government bailout money, or both? Online discussion is indicating that Ford’s strong leadership and refusal of bailout money is giving them the competitive advantage over Chrysler and General Motors. As the threat of bankruptcy grows stronger for General Motors and Chrysler, it is my hypothesis that Ford will continue to benefit from their decision to refuse government aid both in terms of site traffic as well as sentiment of online discussion.

U.S. auto sales declined 37% in the month of January from 2008 to 2009. For automakers, the New Year did not start off on right foot, as vehicle sales continued to decline. However, there is a beacon of light peeking through the dark gray clouds.  An analysis of site traffic from third-party automotive sites, such as KBB.com (Kelly Blue Book), typically provides strong leading indicators for short-term vehicle demand.  Five of the most frequented automotive sites have all shown increased vehicle shopping from December 2008 to January 2009.  KBB.com shows the strongest 6-month rolling correlation when comparing the current month’s site traffic to the following sales month.  Site traffic in January 2009 for KBB.com is down 7% from January 2008, but is the highest we have seen since July 2008.

If site traffic continues to hold as a strong leading indicator of vehicle sales during a recession, we might very well buck the downward sales trend in February or March.