Online dealership portals could be the future of vehicle purchasing
23 January 2018
Mercedes-Benz believes that 25% of its new and used vehicle sales will be completed online by 2022 as the sales environment embraces technology.
Speaking at the Automotive News Congress during the Detroit motor show, global sales boss Britta Seeger said that such a move is one way the industry shifting will transform established models. Drivers will forego the dealership process, instead of buying online and having cars delivered directly to their homes.
‘In digital, we want to offer even more in the future and a different experience, and we are aiming to offer this seamlessly,’ Seeger said. ‘In order to drive this journey, this is a huge effort that we together with our dealers have to undertake.’
Traditional dealer models have already changed in the last few years, with manufacturers opening outlets in parks and even retail shopping centres and airports. Seeger highlighted that as the sales model continues to change, the company will need to work with its established network to ensure they are not left behind.
The industry is concerned that changing ownership values due to the potential of autonomous vehicles would mean that consumers move away from traditional purchasing platforms, instead renting a car, booking time in one or simply hailing ride-sharing services.
The industry shift taking place will disrupt the conventional business model in other ways, Seeger said. She talked about Daimler AG's CASE strategy -- the automaker's shorthand for connectivity, autonomous driving, shared use and electric drive systems -- means for sales and marketing. Seeking new customer groups is part of the plan, and in 2017, Mercedes launched sponsorships in the field of eSports -- multiplayer video games played competitively for spectators.
Meanwhile, a report from KPMG, suggests that up to half of UK dealerships could close by 2025. The Global Automotive Executive Survey suggested that 75% of respondents, who occupy the position of chief executive, president, chairman or C-level executive, said that between 20% to 50% of the brick-and-mortar automotive retail sector could disappear in just seven years.
Many felt that the shift to online would spark a dramatic shift in the make-up of the car retail sector in the coming years, with the evolution of the vehicle ownership model and data security concerns also among consumers key concerns.
Justin Benson, UK Head of Automotive at KPMG, said: ‘In the UK, our findings are clear on one thing, there are more significant disruptors to the automotive sector than Brexit.
‘Electric vehicles, autonomous vehicles and Mobility as a Service (MaaS) are going to drive change in the automotive sector for the foreseeable future. New business structures and new economic models are on the horizon, driven by these disruptors and the associated new technology.’
However, debating the KPMG findings, Sue Robinson, director of the National Franchised Dealer Association (NFDA), said that notions that the end of the car dealership was on the horizon were way off the mark.
She said that recent analysis carried out by the ICDP had found that more consumers' visits to UK car dealerships reached a five-year high in 2017.
‘Figures from the ICDP show that averages for the number of car dealerships visited as well as the total number of dealer visits are higher than they have been over the past five years,’ said Robinson.
‘The automotive industry is resilient and capable of adapting to changes, and physical dealerships are and will remain a central part of the car selling process. Although a strong online presence is essential in today’s marketplace, showrooms continue to play a key role, particularly in closing a sale and retaining customers.’