Car dealerships are taking Tesla’s lead by embracing online sales in the wake of COVID-19. Now industry insiders say salespeople will have less power over customers because of it. (CVNA, KMX)

car salesman

Online car sales and home deliveries have become more popular in the wake of the novel coronavirus.
That trend will continue well into the future, auto industry executives told Business Insider.
“Customers will welcome the power shifting back in their direction, and they deserve that,” said Laura Schwab, president of Aston Martin in the Americas.
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The spread of the novel coronavirus has forced many car dealerships to increase their emphasis toward online sales and home deliveries. In April, more than half of Toyota’s US sales stemmed from the internet, and over 30% of Ford’s US sales started online and ended with a delivery to the customer’s home. That trend is set to continue even after the most severe effects of the coronavirus subside, auto industry executives told Business Insider.

Traditionally, buying a car has meant traveling to a dealership for what could be a process that lasts hours. Shoppers will be less willing to do that in the future, said CarMax CEO Bill Nash.

“The consumer’s behavior has changed in a lasting way because of this pandemic,” he said. “Even before this crisis, we were seeing customers interested in doing more of the transaction online and spending less time in store. This situation has only escalated this shift.”

Such a model could favor newer companies, like Tesla and Carvana, that made online sales a central part (and in Carvana’s case, the only part) of their retail models even before the coronavirus hit.

“More and more consumers are showing their preference for buying cars in an environment that requires less contact with other people,” said Carvana CEO Ernie Garcia. “Carvana was built for that from the beginning, and in today’s environment, we’ve made updates to the process like touchless delivery to address those changing consumer preferences. We expect others in the industry to make similar changes over time to ensure they can provide the kind of car-buying experience consumers are asking for.”

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Those changes may also extend to the sale of luxury cars, said Laura Schwab, president of Aston Martin in the Americas.

“As a small, nimble luxury brand, we’re used to adjusting everything we do to individual preferences,” she said. “Even still, we’re contemplating how the new ‘customer journey’ will look. Prospects and customers will now have more options for how they interact with our team, the brand, and the cars.”

But dealerships for mass-market brands will feel a greater impact, Schwab said, as they move closer toward the personalized retail model already embraced by luxury brands.

“Customers will welcome the power shifting back in their direction, and they deserve that,” she said. “Brands and retailers will now need to work hard to listen to these customers’ needs, and they’ll uncover ways of meeting customers on their own terms.”

Read more:
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Source:: Business Insider


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