Carmakers to bank on digital sales post COVID-19 lockdown

Carmakers to bank on digital sales post COVID-19 lockdown

17th Apr 2020 7:00 am

From online bookings, loan facilitation to contactless doorstep delivery, carmakers look to leverage digital platforms to ensure sales continue in a world rocked by the COVID-19 pandemic.

AD

It’s only mid-April, but it feels like an eternity has passed in 2020. In a matter of weeks, routine activities such as a dash to the supermarket or heading out for a Friday dinner have started to seem impossible. The nationwide lockdown forced by the novel coronavirus (COVID-19) pandemic has so far crippled normal life as we’ve known it. 

At a time when most people are having to think twice about venturing out to buy essential items, the thought of buying a car is almost certainly pushed into a corner for now. However, even once the lockdown lifts, it’s hard to imagine potential buyers flocking to car showrooms like they used to, mindful of the social distancing that will still need to be practiced for quite some time to come. With a vast majority now conducting meetings and practically living on their personal computer or smartphone, car manufacturers have grasped the reality of these fast-evolving times and are now betting big on digital platforms to keep their businesses ticking.

A number of major carmakers, now focusing on maximising digital sales, have refocused their energies and resources into designing dedicated platforms for prospective customers to be able to purchase a car from the safety of their home. And these are not limited to mere online bookings – companies are now promising a seamless, end-to-end experience that promises to change the car-buying process as we know it.

Hyundai India unveiled its 'Click to Buy' platform at the start of this year, and the portal – which links over 500 Hyundai dealerships across the country and lets prospective buyers configure a model of their choice, view finance options, place an order and confirm method of delivery – has become all the more relevant in the present scenario. Initially run as a pilot project in the Delhi-NCR region, Hyundai’s Click to Buy website is now available all across India.

Talking to Autocar India about the platform, WS Oh, Executive Director, Corporate Planning, Hyundai Motor India, said, “There has been a noticeable shift in the recent past, where digital models of retail and sales are garnering traction amongst buyers. Customers are now factoring in convenience to their purchase journey, even for products such as automobiles. With Click to Buy, we will cater to the needs of new-age digital customers. This service also gives you an option of choosing a personalised assistant during the purchase cycle of the vehicle, and customer can get in touch with the allocated sales representative at any stage during the online purchase. Customers can even decide their preferred delivery options – pick the vehicle from the selected dealer or get their vehicle delivered at their doorstep.”

Tata Motors has also introduced a similar – and similarly-named – online sales platform called 'Click to Drive'. In addition to letting buyers view all related information about a model they’re interested in and configuring it, Click to Drive also facilitates a completely contactless purchase experience, where buyers can opt to complete all purchase-related formalities by coordinating with a sales executive using email, WhatsApp and video calls; with the option to have their car delivered to their home once the lockdown lifts.

Toyota, too, is anticipating a rise in digital sales and enquiries as it enters the BS6 era with a trimmed-down line-up.

“Currently, our digital contribution varies product to product, in B segment it stands at 6 percent to 10 percent of total sales, but after COVID-19, we expect a drastic change in the customer buying process with more digital transactions. Digital interfaces will become the primary source of reaching out to buyers. Customers can take a virtual tour of vehicle, sitting anywhere and get a better understanding to make an informed purchase decision. This will not only save buyer’s time but also provide services to the customers, at their convenience. We’re already seeing an increase in digital content consumption,” says Naveen Soni, senior vice president, Sales & Service, Toyota Kirloskar Motor.

Recognising the need to provide a richer experience to those exploring cars on its website, Soni says Toyota has also added a 360-degree viewer for all of its models and making all relevant product details available for those who want to make an online booking.

Even MG Motor India – which launched its first model, the Hector, less than a year ago – has designed its website to become a facilitator for online sales and foresees more buyers opting to take the digital route going forward.

“At MG, we’ve witnessed great success with our online bookings. For the MG Hector, 16 percent percent of the total bookings were purely online. In the case of MG ZS EV, over 40 percent of the bookings were received online. The customer has the option to configure their MG using the ‘Car Configurator’ by shortlisting the model & variants and choosing the preferred delivery location based on their city and pin code. They can also e-book an MG online by paying a booking amount of INR 50,000”, says Gaurav Gupta, chief commercial officer at MG Motor India.

Even luxury carmakers – who place a lot of importance on the experience of buying one of their cars – are actively looking to add new customers to their family by taking the purchase process online. BMW India has rolled out its very own 'contactless' digital purchase programme, and Mercedes-Benz India has its own online 'shop', which presently only retails pre-owned models and merchandise, but the company will soon make its entire range of new cars available for purchase on the site as well.

“We believe that ordering a car should be as easy as ordering food online – 25 percent of sales by 2025 will be online. We started the online sales of our cars this year and we already have witnessed positive momentum. Last month we received more than 700 inquiries and we have surpassed that number within first 20 days of March. There is certainly a surge in the online inquiries as people are able to visit the site and check availability of cars even remotely. Our customers can select the three-pointed star of their choice and also register/ book them online also select financing options, service packages, insurance”, says Martin Schwenk, managing director and CEO at Mercedes-Benz India.

Citroen – which was supposed to make its India entry later this year but has now delayed it to early-2021 because of the COVID-19 pandemic – is also focusing on going digital, with a majority of steps in the car buying process set to be present online. The French carmaker has readied the Any Time, Any Where, Any Device, Any Content (ATAWADAC) platform, which will let buyers research products, select variants, configure options and accessories and transact for service contracts, finance & insurance online.

Roland Bouchara, Senior Vice President, Sales & Marketing, Citroën India, says, "Inspired by new-age Indians leading digital lives, Citroën has developed a whole new car buying and owning experience, powered by human-centered technology. ATAWADAC is a first time, unique seamless digital consumer experience created for India and will be taken to the world. You will have the options to book test drives and even purchase a car online! That’s our new business model." 

Being a new entrant in the market, Citroen is aiming to take a different approach to designing dealerships, and says it has an advantage as to incorporate a greater amount of digitalisation into its buying process, it doesn’t have to invest in reworking an existing network like most other carmakers do.

“Since we are setting up a new network, we are proposing a different business model to our dealers, wherein we will have relatively smaller showrooms but digitized. It will ensure a competitive premises investment, but a stronger all encompassing digital environment. We can do it because we start fresh and have no refurbishing costs for a large existing network. The digital first approach is inspired by new-age Indians leading digital lives”, Bouchara adds.

While some may decide to put off a car purchase they may have been planning due to the financial uncertainty India faces today, there’s another line of thought that suggests some may prefer the safety of a private vehicle over using public transport, in the hope of staying safe from the deadly coronavirus. There will be demand from such buyers, and MG Motor India’s Gaurav Gupta is of the opinion more buyers will log on for their next purchase.

“Digital is where India is, at present. It is the most active medium of engagement and accounts for the maximum time spent by the country’s consumer base across channels – both in general and during the current lockdown. Digital sales, therefore, is an opportunity for us to create a direct-to-consumer (D2C) model, wherein the brand becomes the face of immersive engagement that facilitates a virtual buying experience. We believe this journey will evolve further post COVID-19, as there will be a paradigm shift in the consumer buying behaviour. People will consider their safety first and will thereby look to involve themselves in experiences accessible at remote locations, their homes, or their workplaces”, says Gupta.

That said, there are those who believe that while digital interactions, enquiries and bookings will spike, showrooms will still play a key role in the overall buying experience.

"Some customers still prefer touch and the feel of the car and the experience of visiting a showroom before making a purchase. So it remains our endeavour to make the online buying process as real life-like as possible, for this set of customers", says Mercedes’ Martin Schwenk.

His opinion is echoed by Toyota’s Naveen Soni, who says, “Car buying is an emotional and rationale decision. While all the services are available online, buyers will still want to experience the vehicle and get more understanding of car’s quality by its look, touch and feel. Hence the online and physical experience must go hand in hand which is a challenge in the current situation. While the primary research can be done online but the dependency on showrooms will never end. In India, buyers are still evolving, and they are more comfortable in buying a car offline as it is a lifetime investment. However, the customer buying pattern post the lockdown likely to experience some change and needs to be evaluated.”

One thing is clear – bearing in mind the immeasurable impact of the COVID-19 pandemic, carmakers, too, are having to rethink their strategy and are ready to go digital and make their products easily available in these not-so-easy times. What remains to be seen is if the Indian buyer puts head over heart, logs in and drives off.

Would you prefer buying a car from the comfort of your home or would you do it the old-fashioned way by visiting a showroom? Let us know in the comments.

Also see:

Honda launches online new car booking platform

Volkswagen launches online car buying service in India

New car, bike warranty extensions due to COVID-19 - A complete list

Copyright (c) Autocar India. All rights reserved.


Tell us what you think.