The Car Show Will Go On

September 11, 2023

The media glitz of top car shows has faded, but the format has staying power as a marketing event for consumers with cash to spend.

By guest author Stephen Wilmot from the Wall Street Journal.

“International” car shows have a more national flavour these days, but that doesn’t mean the format is dying.

The North American International Auto Show launches this week in Detroit, hot on the heels of IAA Mobility in Germany last week. These were traditionally among the “big five” global car shows alongside those in Paris, Geneva and Tokyo, before the pandemic broke a tradition already under strain. IAA relocated from Frankfurt to Munich in 2021 with a broader pitch around “mobility” to appease the anti-car lobby, while there hasn’t been an auto show in Geneva since the lockdowns.

Car shows can only really rely on their home team to show up these days, let alone create a buzz with new models.

Volkswagen, BMW and Mercedes-Benz attended IAA in force, taking over the squares of central Munich and showcasing their flagship projects. But most American and Japanese car brands, and even some other European ones, stayed away. Only Chinese vehicles were there in greater force: The likes of BYD are new to the European market and need to make a splash.

The home bias will be even more pronounced in Detroit. Of the 15 brands due to host their own displays, just five originated overseas: Toyota, Lexus, Kia, Fiat and Volkswagen. Europe’s luxury names will be represented by dealers, and in BMW’s case also on an indoor electric-vehicle test track.

Toyota is saving its big reveals for the Tokyo show, which starts in October. Underlining the role of national champions in keeping big shows alive, the Geneva event has struggled to bounce back because Switzerland doesn’t have a car industry. In commerce as in war, the country’s unique selling point was that it was neutral territory.

Perhaps the most international show this year was Shanghai in April, not one of the traditional big five. The rapid advances China has made with electric vehicles were one reason executives turned up from all over the world. Less repeatable, though, was the timing of China’s post-Covid reopening: Foreign executives had spent the previous three years trying to understand the world’s largest car market through a computer.

“We even had virtual test drives—people driving vehicles for us and I was watching it on the screen,” said Mercedes-Benz Chief Executive Ola Källenius, recalling the challenges of the pandemic era.

The sheer physicality of cars will ensure a future for auto shows: The digital experience isn’t enough. As manufacturers look for savings wherever they can to fund their transition to electric vehicles, though, it will likely be a more modest future. Following the pandemic, brands seem to be focusing limited budgets on their home show and countries where they have big growth plans.

In the U.S., this could take the show back to its roots as a forum for potential buyers to check out new models in their local city. This consumer side of the car-show business was steady before the pandemic, even as companies were already questioning the high cost of competing for glamour at media-focused international events.

Foresight Research, which collects data on U.S. car shows, estimates that about 6.5 million households—one in 20—attended them in the last full season before the lockdowns. The season that ran through the spring of 2023 was still affected by health concerns, with just 4.7 million homes attending. Yet three-quarters of those households intended to buy a car within the next year, according to Foresight co-founder Chris Stommel, making it a powerful marketing channel.

To improve their margins, traditional automakers increasingly want to followTesla’s lead in selling cars directly online. If it takes off, this trend could magnify the importance of car shows, where consumers and their social-media influencers have a rare opportunity to sit inside a variety of vehicles all in one place.

As it moves into the mass market, Tesla itself is attending the Detroit show this year for the first time since 2015, by participating in the EV test track and offering street rides. This might be a sign of where things are headed.

In a more digital, budget-conscious auto industry, the car show will go on—just in a lower key.