When BMW unveiled a redesign of its M5 sport sedan in 2011, the car had to jockey for attention among nearly 50 production vehicles debuting at the Frankfurt auto show. Last year, the automaker went a very different route to generate buzz for the sixth- generation M5 without having to share the spotlight.
It revealed the car in a video game.
The 2018 M5 showed up in teasers for “Need for Speed Payback” last summer before appearing at a gaming convention and then an esports competition at an arena in Paris. After all that, BMW finally showed it to auto journalists at the Frankfurt show in September.
BMW’s strategy, unthinkable only a few years ago, illustrates how the digital era is transforming the way automakers introduce vehicles. The shift has left many of the big international auto shows grasping for answers as brands increasingly connect with consumers through Instagram and YouTube instead.
The Detroit show, already noticeably more sparse and less flashy in recent years, is losing all three German luxury brands for 2019. Mercedes-Benz said in February that it’s dropping out, followed by BMW in March and Audi last week.”We’re reviewing the auto show footprint to say, ‘Where does it really make sense, which formats make sense, to get journalists, to get customers, to show and display your vehicles?’ ” Bernhard Kuhnt, CEO of BMW of North America, told Automotive News. “We’re definitely going to invest into other formats as well. The auto show is not the right format only.”
For Detroit, losing the three German luxury brands — on top of earlier departures by some smaller manufacturers — threatens to create a domino effect, with fewer journalists deciding to attend and then even more brands reconsidering the investment required to be there.
“If there is less press, that puts us in a bind,” said Jim Lentz, CEO of Toyota Motor North America. “I don’t need to spend all this money.”
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Beyond video games, automakers have livestreamed unveilings, debuted cars on morning TV shows and launched vehicles at trade expos such as the big CES tech show in Las Vegas, which happens just days before the Detroit show each January. Automakers have increasingly decided it’s more worth their money to host private introductions at far-off locations in between auto shows, letting journalists spend a day or two with a vehicle instead of doing just a quick walk-around sandwiched between other unveilings.
“There are a lot of choices about how to communicate your information and where and when, and auto shows are no longer a default,” said Stephanie Brinley, an analyst with IHS Markit. “You don’t have to be at any particular show. The auto shows are having a hard time navigating why the change is happening, what the change really is and how to react to it.”
Show organizers in Detroit are re-examining how the event is staged, including its January timing.
The industry is watching closely. It’s not just Detroit losing exhibitors. Several key brands have opted out of the most recent shows in Geneva, Frankfurt and Paris. At the same time, growth in China has fueled new shows there that compete with more established ones for automaker dollars.
“The marketplace is changing right before our eyes,” said Rod Alberts, executive director of the Detroit Auto Dealers Association, which puts on the Detroit show. “Every show, whether it’s a regional or an international show, has a place in what’s going on with the auto industry. But the key is that they all make adjustments along the way to make sure they’re relevant to what is needed and making sure the brands and the manufacturers are getting what they need out of those shows.”
DADA is considering moving Detroit’s show to October or June, when the weather will be better and automakers can stage outdoor ride-and-drives or other activities to convince consumers of their vehicles’ merits. Show organizers are gathering input from all stakeholders, including automakers, and a decision is expected this summer, or possibly sooner, Alberts said.
If the show moves, it’s expected to happen in 2020, pushing that year’s show to the summer or fall. There are discussions about holding a smaller event on the new timetable in 2019 to try out elements such as outdoor test drives — and to help bridge what would otherwise be a 17- to 21-month gap between Detroit’s turns on the auto show circuit.
Show organizers started looking at a move in February after Mercedes dropped out for 2019, citing product launch cadence and acknowledging increased competition confronting auto shows. The deliberations took on more urgency when BMW and Audi followed suit. Jaguar, Land Rover, Porsche, Volvo and Mazda also have left in recent years, while the displays of many that remain have shrunk.
The 2018 BMW M5 was seen at a video-gaming convention well before its auto show debut.
“It was the one show where Korean, Japanese and German auto execs showed up at,” AutoPacific analyst Dave Sullivan said of Detroit. “It was where the supply base could mingle. It was a melting pot — everyone in the auto industry could come together as one for a few days every year. The significance of it is really starting to fall apart.”
Mercedes and BMW execs have said they could return to Detroit in 2020 or later if the show fits their product timing. Audi last week said it would “continue to evaluate auto shows on a case by case basis relative to the timing of our product introductions and the value the show brings from a media and consumer perspective.”
2019 will be the first time without all three German luxury brands since it became the North American International Auto Show in 1989.
The earlier departures already had contributed to conspicuous empty spaces at Detroit’s newly renovated convention center during the show’s media preview days. At the same time, automakers are doing more off-site reveals so their vehicles won’t start the show under a shroud and miss out on media coverage. Some automakers now skip press conferences at Cobo Center in part because of costs; there were 21 in 2015 but just 13 this year.
Instead of spending $1 million on a Detroit press conference, Honda unveiled its revived Insight hybrid at a holiday media gathering in December, though attendees had to agree not to publish pictures or details until the week of the auto show.
A separate event allows for a “more rich storytelling environment than, boom, 20 minutes and you’re off to the next press conference,” American Honda public relations chief Sage Marie said.
Even so, Honda’s Acura brand did hold a press conference in Detroit this year for the redesigned RDX crossover, the first in a new generation of products. “We wanted to make a little bit of a splash and beat our chests a little bit,” Marie said.
Automakers are wrestling with the changes.
Ford Motor Co.’s Lincoln brand sees regional shows, which are focused on consumers rather than on attracting worldwide media coverage, as an important part of its marketing strategy, said Robert Parker, Lincoln’s head of marketing, sales and service. But larger shows are a tougher call.
“If you’re in the midst of a transformation like Lincoln is, customers may need an event like this to look at a car. Most people who come to auto shows are within 12 months of a purchase,” Parker said. Going forward, auto shows “will play a role, but these global shows are the ones that are more difficult to figure out.”
For many automakers, press coverage of auto shows is a major factor in their participation. Companies such as Toyota that have relatively low market share in Detroit are watching organizers’ deliberations closely to gauge the effect on the show’s ability to continue attracting media from all over the world.
The Detroit show issued 5,078 media credentials in 2018, a number that’s been stable for the last several years. Media coverage actually rose 46 percent from 2017, generating 564 million impressions, according to a study commissioned by the dealers association and conducted by Prime Research. Through two-thirds of the 2017-18 auto show season, Detroit was second globally in media impressions after Frankfurt, according to Prime, pending results from Geneva, New York and Beijing.
Mercedes, along with German rivals BMW and Audi, will not be at the Detroit auto show in 2019. Mercedes and BMW say they could return to Detroit in 2020 or later if it fits their product timing.
Even shows that generate huge media coverage must find ways to make participation less costly, given the growing number of lower-cost alternatives for automakers, former Cadillac President Johan de Nysschen said.
“Auto shows have become very expensive. Just doing press conferences is some staggering cost,” de Nysschen said in an interview shortly before leaving Cadillac in April. “I don’t know why they’re that expensive. Show organizers need to take a long, hard look at this.”
In conjunction with a date change, Detroit show organizers intend to work with city and convention center officials to reduce setup time for the show. It currently takes nearly three months, a period spanning three major holidays — thus requiring significant overtime pay for workers.
“We’re going to look at ways to save our customers money when they come here,” said Alberts, the DADA chief.
Of course, marketing to consumers is ultimately the reason auto shows exist.
Attendance at U.S. auto shows increased considerably from 2009 to 2015, as the economy improved and more millennials gained the means to buy new vehicles, said Steve Bruyn, CEO of Foresight Research, which studies auto shows. It has leveled off the last three years at an estimated 11 million people annually. Detroit is one of just a few shows that publicly report attendance, which has hovered at just more than 800,000 for the last several years.
“Shoppers can go and look at vehicles and shop for cars and have a good time doing it,” Bruyn said. With two-thirds of attendees in the market to purchase a new vehicle in the next year, “The exposure is incredible.”
Alberts: Detroit show evolving
More test drives
The plan to add more outdoor and test-drive opportunities for Detroit attendees is something automakers are asking for. General Motors has floated turning the auto show into more of a festival. A move to June or October would enable exhibits outside the convention hall and improve the experience for consumers, Alberts said. In the interim, people going to the January 2019 show may see more indoor activities as planners try to leverage open floor space.
“It’s still a strong international show that’s changing into what the future of shows is going to look like, which has to do with experiential, new brands like GAC that are coming to the market soon and technology,” Alberts said. GAC became the first Chinese brand on the show’s main floor in 2017, after other brands’ departures freed up space.
Steve Harris, a former communications chief at Chrysler and GM, fondly remembers the days when the Detroit show’s press conferences made big splashes: Jeeps that crashed through plate-glass windows, a cattle drive in the city streets and indoor snowstorms. The days when practically every major auto brand is there are probably over, he said, but the show can still be meaningful with support from the Detroit 3.
“A big thing is what GM, Ford and Fiat Chrysler decide they want the Detroit show to be,” said Harris, who is retired. “If they want Detroit to be a place where they make major announcements, regardless of how they’re done and what they are, then Detroit will continue to be relevant as long as those companies are still relevant.”
Larry P. Vellequette, Michael Martinez, Michael Wayland and Laurence Iliff contributed to this report.
Attendance at major U.S. shows in 2017-18: 4 million
Attendance at regional and local U.S. shows: 7 million
Proportion of attendees in market to buy a new car: 2/3
First-time buyers influenced by auto shows: 26%
Source: Foresight Research; Auto Shows of North America Show shoppers