March 19, 2021
Yet again, we’re looking at the effects Covid has had on production and consumer trends. This time, an automotive data analysis in response to GM’s announcement that it will be extending production cuts to mid-March. If this is your first time hearing about the chip shortages affecting multiple sectors of the economy, a little background: In March 2020, the entire world shut down. This shutdown had a number of effects
- Factories and production lines shut down or reduced capacity to ensure worker safety
- People were forced to either socialize outside when possible or find things to do inside
- This along with the stimulus money many people received led to an uptick in consumer electronics spending
Because of this increased spending and general disruption to supply chains, there is currently a global microchip shortage. One would think that would mean consumer electronics would be rare – and they are, finding a PS5, for example, is nearly impossible – but it also means that new car production has been low, because modern cars have dozens of microchips regulating and monitoring basically every process. Now on to the automotive data analysis and how this shortage has affected GM media trends.
Chip Shortages Translate to Advertising Shortages
As you can see in the graph below, beginning in December 2020, GM’s total ad airings began to drop and they haven’t really rebounded to their pre-pandemic levels. In fact, our automotive data analysis shows that in March of last year, GM aired less than half the total number of ads they aired in 2019; so far this year they’re only on track to match what they did in 2020. This is probably due to more than just the chip shortage, the US is one of only a handful of countries with widely available vaccines, but it certainly indicates that the GM’s car production isn’t rebounding as fast as they had hoped.
GM is not a monolith, they house four household car brands. With our broadcast advertising intelligence tools, we found that each of these have acted consistently since January 2020, with Chevrolet – the most well known and most accessible GM brand – consistently the top advertiser. Buick and GMC alternate between second and third most airings followed by Cadillac. This fits another trend we’ve seen from GM; they consistently allocate around 20% of all their advertising to pickups and GMC and Chevy are the only GM brands that produce trucks. Considering that of the over 40 consumer models GM produces, less than a dozen are trucks, that’s a heavy allocation to one type of vehicle. We expect GM advertising to pick up in the next few months, but trends between GM brands to stay consistent just at a higher volume.