What Giant Red Bows May Tell Us About Holiday-Season Car Sales
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Here's your Money Briefing for Thursday, December 22nd. I'm J.R. Whalen for The Wall Street Journal. Drive by your local car dealership in December, or actually sit through TV commercials at home, and you can't miss them. New cars for sale, all decked out in big red bows. Those bows often complete the message that a car would make the perfect holiday gift. But what can they tell us about actual car sales?
I talked with some bow makers and sellers and heard from a few of them that sales are down this year pretty steeply. And if we think about a drop-off in the sales of bows, you could maybe interpret that as a sort of economic indicator that maybe there will be a drop-off in the number of cars given as gifts in a few days for Christmas.
But there's more to it than that. We'll talk to Wall Street Journal personal finance reporter Joe Pinsker about the economics of cars and bows. That's after the break.
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What seasonal trend connects big red bows to holiday car sales?
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The holiday season is traditionally strong for car companies and the companies that make those big red bows, you know, the ones you see in the TV commercials. But it's not just the automakers and dealerships buying those bows. They're a hit with consumers too, and they just might give us a glimpse into what car sale figures might look like. Wall Street Journal personal finance reporter Joe Pinsker looked into that, and he's with us now. Hey, Joe, thanks very much for being with us.
Yeah, thanks for having me.
So Joe, these commercials are everywhere this time of year. You know, the unsuspecting lucky recipient walks out to the driveway and there's a brand new car with a big bow on it. You mean to tell me this actually goes on in real life?
Yes, this does in fact happen. In the big picture, it's probably fairly rare, but I did talk with the owner of a Lexus dealership in New Jersey who estimates that about 15% of cars that are sold this time of year for him are gifts. Think cars that people are giving to loved ones. And that's actually in line with what I heard from Lexus, which says that anecdotally over the years, it's heard from other dealers that a similar share are purchased as gifts. In fact, December is a particularly strong month for luxury auto brands. December in general, between 2010 and 2020, was actually the strongest month for car sales overall. But for luxury brands particularly, an especially large share of sales came in the month of December.
By the way, how did this whole big red bow on a car thing get started?
You know, Lexus actually has a lot to do with this. It really goes back to the launch of their ad campaign called December to Remember. Those ads started airing in 1999, and those are these sort of now famous commercials with, as you said, unsuspecting recipient getting let out to the driveway. And within a few years of those ads being released, the journal actually ran a story on a bow shortage because people were trying to recreate the scenes from the commercials at home.
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