New cars are expensive to produce, so automakers tend to rely on a lot of marketing to sell their products. It’s not uncommon for some of the most popular car brands to drop millions of dollars on advertising. However, one of them spent far more than any other company on promotional materials in 2022.

GM spent over a billion dollars on marketing last year

Statista reveals that GM spent $3.25 billion dollars on advertising in 2022. To put that in perspective, spending runner-up Stellantis had a total marketing bill of $1.84 billion dollars last year. Both Ford and Toyota also put over a billion dollars toward the promotion of their various vehicles. 

Other automakers chose to be a little more conservative with their advertising budgets, though Honda came close to $1 billion spent. Both Hyundai and Nissan spent around $800 million dollars on advertising last year, four times less than GM. 

Why does GM need to spend so much money on ads?

To be fair, the GM brand encompasses several nameplates. GM is the producer of the entire Chevy catalog, GMC’s lineup, as well as both the Buick and Cadillac luxury brands. That’s double the volume of what most automakers are usually trying to advertise, so it explains the extra expenditure. 

Even so, billions of dollars is a lot for any company to spend, especially one as successful as GM. It could be possible that GM has a higher spending budget than most of its rivals. Spending less than that allocated amount could result in a lower advertising budget the next year, which carries some risk. 

Is a big advertising budget necessary for success?

Until very recently, Elon Musk was staunchly opposed to advertising his trillion-dollar car company. According to Reuters, Tesla only spent an estimated $151,947 on marketing last year. It’s possible that Elon may have changed his tune thanks to the current state of Tesla stock, which has been steadily declining.

Despite zero conventional advertisements, 80% of EV sales made in 2022 were for Tesla vehicles. The Model Y SUV is currently the most popular Tesla, likely because of its high range and acceleration estimates. The most efficient ones can be driven for 330 miles on a single charge. If you buy the Performance model, you can shoot to 60 mph in just 3.5 seconds. Both models are very affordable by EV standards, starting below $45,000.

Subaru also doesn’t see the need to sink billions of dollars into advertising. According to Statista, the company finished out 2022 with a marketing spend of approximately $412 million. That’s still a lot more than Tesla, but less than some of Subaru’s biggest competitors. 

Subaru’s cars tend to market themselves due to the brand’s longstanding reputation for reliability. The company boasts that many Subaru cars on the road today are over 10 years old. Most models also have the potential to last upwards of 200,000 miles.

New cars cost tens of thousands of dollars per unit, so too much advertising probably isn’t a bad thing in the minds of automakers. In the grand scheme of things, a healthy marketing strategy increases brand visibility and results in higher profit margins. It’s necessary for any company’s survival, even though it might annoy consumers with one car commercial after the other.