Boch Automotive went ‘full speed ahead’ with advertising during recession
Ernie Boch Jr.
Ernie Boch Jr., always a maverick, went his own way in the Great Recession, sticking with a fat advertising budget he pegged in the “tens of millions of dollars” annually, even as other big auto dealers slashed advertising to save costs.
“I didn’t back down a dime,” Boch, 60, told Automotive News.
How did it turn out? “I still got killed!” he admitted.
“Sales plummeted. But it was more an investment in the future. My [market share] position didn’t change. Before the recession we were No. 1 in New England with Honda, and No. 1 in New England at Toyota. And we were still there after” the recession ended, he said, “No. 1 in New England.”
Boch said that the decision was his, as the head at the time of privately held Boch Automotive, in Norwood, Mass. But executive management also supported the idea, he said.
“I was the president and CEO. I didn’t have a board. I have my people, and we meet and we talk about the business, but there was nobody against that. It was, ‘Full speed ahead!’
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Ernie Boch Jr.
- Title then: CEO
- Dealership group: Boch Automotive
- Where: Norwood, Mass.
- Survival strategy: Full speed ahead on advertising, with a view?to the industry’s eventual recovery
“I believe not cutting back on advertising, when it turned around again, made a big difference in the recovery,” he said.
“People left and right were bailing out of advertising, but I continued at the high level — the very high level — I normally advertise at,” Boch said. “I knew we’d come out of this, and share is probably the most important thing in the retail automotive universe.”
Boch pursued the same strategy, with completely different short-term results, for Subaru of New England. The independent distributorship for the six New England states remains the crown jewel of Boch’s assets.
‘Tale of Two Cities’
“It was like the Tale of Two Cities. I had massive, mass-market retail properties, Honda and Toyota, and I had the true exotics, Ferrari and Maserati. And then, I had The Little Engine That Could, or however you want to describe Subaru,” Boch said.
“Toyota and Honda numbers went down quickly. But the Ferrari and Maserati numbers, they plummeted! That whole exotic niche got destroyed, and destroyed on multiple levels,” he recalled.
“Those customers, with the markets like they were, they did not want to spend the money. It also got hurt imagewise. Even people who had the money — and they had the money — couldn’t pull up to work after laying off 100 people in a new exotic car.”
Meanwhile, Subaru defied gravity. It was the only major brand whose sales improved year over year, straight through the Great Recession. Boch said the “props” for that achievement go to Tom Doll, CEO of Subaru of America, for making the brand “cool and desirable,” and to management in Japan for tailoring cars and crossovers specifically for U.S. tastes.
“At Subaru, I gotta tell you, we thought we were gonna get killed, but we’re in meetings after the first couple of months [of the recession], looking around at each other and saying, ‘We’re up! We’re up!’ We were up in 2008, 2009, 2010, 2010-2011. It was completely contrary to the industry. We were the only manufacturer whose sales improved in the recession,” Boch said.
It’s also fair to say Subaru of New England has historically had higher market share than the brand’s national average, partly because Boch’s father, Ernie Boch Sr., who founded Subaru of New England, always required exclusive dealerships.
Subaru’s all-wheel drive is also a popular feature in snowy New England. Ernie Boch Jr. said Subaru’s market share in Vermont, for instance, is so high it’s “freaky.”