Buying cars on the Internet instead of visiting a dealership is an emerging trend spreading across Europe and the US.
It is a matter of time before it is copied in other markets.
This trend poses the gravest challenge to car dealerships and how cars are being sold today.
At least three companies are involved in new online experiments: Hyundai, Mercedes-Benz and Volvo.
In Hyundai’s case, a partnership was formed with UK auto retailing entrepreneur Simon Dixon to sell cars on his web-platform.
Customers avoid haggling and travel costs to dealers’ showrooms to receive their cars — as cars are delivered directly to their homes.
The new concept saves time and effort. It takes less than five minutes to buy a book on Amazon, and the same time scale applies to buying a new car. A Hyundai executive in Europe described the new approach as “The first pure digital dealership.”
Independent research has also found that customers do not rate test-driving a car before buying as highly as dealers do.
Other aspects of design and price are more vital in the buying decision.
Volvo also discovered that half of their customers would consider buying their cars online and the company is now pursuing strong Internet presence.
In an experiment of selling a limited edition of its new XC90 model online only, the cars were sold out in 47 hours.
A Volvo executive denied that the main motivation for customers to buy online is the price.
He confirmed that most customers wanted to avoid showroom salesmen.
Young generation buyers, with more purchasing power, are comfortable buying on the Internet and prefer the soft-sell approach made popular by companies like Apple.
The most active age group buying online is between 18 and 34 years old.
Older buyers are less likely to use the Internet for buying their cars.
Car dealers need to adapt to that trend and use the Internet to support rather than replace their sales.
They can offer apps for mobiles, extra services for customers and digital outlets in shopping malls where consumers go regularly.
The Internet is a challenge dealers must face — or perish.
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*Adel Murad is a senior motoring and business journalist, based in London.
Email: [email protected]
