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April 14, 2009

MOTORING TIMES:Is the cancellation of the British International motor show a sign of things to come?

Pete Roythorne looks at the ramifications of the cancellation of the British International Motor show on the events industry.

The cancellation of the 2010 British International Motorshow is another sign of how the harsh economic outlook is hitting the events industry, we spoke to some of the UK’s top organisers to find out whether this was a sign of darker times to come or a one-off in an industry that is itself being ravaged by recession.

Nikki Rooke, head of communications for the SMMT, sets the scene. “Following each event, we undertake a thorough review process with Society of Motor Manufacturers and Traders (SMMT) members, primarily, the vehicle manufacturers. Immediately after the 2008 show the potential economic difficulties were recognised and the traditional review period was extended,” she explains. “As the economic situation continued to deteriorate it became increasingly clear that, while keen to have a show of some kind, manufacturers were not clear on their budget positions for the coming years. With the existing uncertainty over when and how quickly the economic situation will improve, the decision to cancel the 2010 show was made. At a time when the industry is cutting production back, reducing headcounts and salaries and cutting production shifts, it was not considered appropriate for manufacturers to commit to a show as far in advance as is needed to plan such a large scale and prestigious event.”


Economic impact: While the cancellation of the
British International Motor Show will have an undoubted effect,
the industry has plenty of time to limit the damage

Tim Etchells, co-managing director of IMIE the company behind the successful relaunch of the British International Motorshow last year, has been a key figure throughout this process. “Given the economic uncertainty surrounding the motor industry, the cancellation doesn’t really come as a huge surprise; the manufacturers have been aware of trouble brewing for some time. They don’t know whether they’ve got the budgets necessary to put into the event now so we’ve really encouraged the SMMT to do honourable thing. We didn’t want to drag the event through the mud, so we took an early decision to cancel the 2010 event. The SMMT and its members are still very much behind a UK motor show and we are looking at how to bring it back in the future.”

Enjoying the experience
Etchells is adamant that this is purely an economic decision and nothing to do with vast motor shows having lost touch with their audiences. “We drew excellent audience figures at last year’s show at ExCeL, which was much more experiential and combined an event that catered for everyone from petrol heads, to car enthusiasts and families. We deliberately wanted to make it family event as the motor manufacturers want to be seen as a lifestyle choice.”

Brand Events’ Chris Hughes, who has unique experience of motor shows, thanks to his hugely successful Top Gear Live events, believes the cancellation is indicative of a unique show model peculiar to the motor industry. “Firstly it’s important to point out that Tim and IMIE did a fantastic job with last year’s show and it’s a great shame they are not getting the opportunity to build on this for 2010,” says Hughes. “However, the problem essentially revolves around the model of these vast motor shows. Any show that is beholden to a small number of key exhibitors funding its existence is vulnerable to the fluctuations in these exhibitors’ markets. This is exactly what has happened here; gate take and exhibitor sales are relatively low in terms of the actual revenues at events like this, it’s a simple matter of economics. However, there’s no reason to believe this is a wider problem and that we’ll see other big industry shows being pulled as the recession deepens.”

Hughes’ thoughts are echoed by Clartion’s Simon Kimble. “Clearly the economy has played a devastating hand to the car industry and the cancellation is pretty unsurprising,” says Kimble. “As for whether we’ll see other sector pull-outs of large events; this will clearly depend on the sector, but it is worth remembering that the Motor Show is quite unique in that it is one of the few shows left that wasn't really there to generate direct sales – it was just a showcase. Where shows provide the exhibitor the opportunity to sell directly they stand a much better chance of not only surviving, but becoming an even more important and necessary sales channel. I'm not sure there is a more cost-effective way to sell to consumers.”

Etchells is still concerned about the economic impact of the decision. “Only when you cancel an event like this do you realise the massive impact on both the events industry and London itself; from contractors, to hotels and ticketers. Millions of pounds of economic impact, and this effects everyone.”

A responsible decision
Despite this, Kimble believes that the SMMT and IMIE have given the industry ever opportunity to pull itself round. “Of course, this will have an effect, but the organisers have been pragmatic and sensible by giving early notice, some 17 months before the event was to take place that will help minimise this.”

Duncan Reid, event director for International Confex, agrees: “The economic impact of any event that attracts 100,000-plus people is always going to be significant but it’s a very sensible decision giving the current trading in that sector. I think all those contractors and suppliers would much rather secure long-term business for 2011, 2013 and 2015 than see the show fail in 2010 with no chance of further work. The negatives are the loss of short-term work plus it might make someone else consider pushing their show back a year, but I haven’t seen this.”

David Hornby, commercial director for VisitLondon, backs up both Kimble and Reid’s thoughts: “The SMMT and IMIE have taken a very responsible decision. No one wants an event of that size to fail and let people down, so I applaud their strategic decision. It will have an undeniable economic impact on London, but because the decision was taken early, everyone can start to change their plans to accommodate this and limit the damage. The hotels and ExCeL will certainly find other clients.”

So, while this certainly adds to the sense of gloom, it’s not the killer blow to the events industry that it’s tempting to think it could be. However, while the support is there for the show to be resuscitated – budgets permitting – Hornby adds a warning shot: “The problem, I think, is how do you get the show back into people’s minds and, most importantly, their budgets and continue the momentum that was built up? The British International Motorshow needs to come back leaner, fitter and meaner. Car manufacturers need to find more innovative ways to sell than what is essentially an expensive showroom.”

What do you think of this $type?





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