Online car sales to accelerate, as salesmen take a back seat-NewsCO

January 29, 2017

"store angel" in Rockar shop

Image caption

Some customers are already directed to buy their cars online

Here’s a personal prediction: 2017 will be the year that tens of thousands of motorists will start to buy new cars not from a salesman, but directly from their lap-tops, tablets and smartphones.

The industry is betting that many consumers want to switch to the convenience of buying online, rather than negotiating in person with a dealer.

This month alone three separate car-makers have launched new sales websites, with others expected to follow.

If motorists take to buying online, the days of slick-talking salesmen and saleswomen could be numbered.

The likes of Arthur Daley or Swiss Toni, from the BBC’s Fast Show, would be very unhappy.

But will internet sales also mean lower prices?

That has been the experience in virtually every other part of the retail sector.

But going out to buy a car is not like a shopping trip in the High Street. At least, not yet.

30 minute purchase

Spooked by the success of car-broking websites like Carwow.co.uk, which searches dealerships for the cheapest model, manufacturers now want their own sales platforms.

This month Hyundai, Smart and Peugeot – which includes Citroen – have all entered the market.

When they go online, customers can choose the precise specifications they want – including colour and engine size – part-exchange their old car, arrange finance, decide whether they want their new model delivered to a dealership or to their home, and then click “pay”.

The process is said to take as little as half an hour. In practice that is probably only achievable if you have already decided on the exact model you want, and how you are going to pay for it.

Nevertheless, for the first time it is perfectly possible for a motorist to buy a new car without going anywhere near a dealer, and never meeting a car salesman.

However, if he or she wants to see or test drive a car, that can still be arranged.

Death of a salesman

Anyone sceptical about whether online sales will work should visit Bluewater in Kent, or Westfield Stratford shopping centre in East London.

Both Jaguar Land Rover and Hyundai have models on display, but to buy one you have to go online.

Between them these “shops” sold a thousand cars in their first year.

And here traditional sales executives are already a thing of the past.

Instead customers are greeted by so-called “store angels”, whose job is restricted to giving information, as well as guiding people through the website.

Image caption

So-called store angels have already replaced some traditional sales staff

“You don’t need to have a sales executive driving a sale,” says Michael Canham, a team leader with Hyundai’s sales partner, Rockar.

“If a customer is in a buying mode, they will make that choice naturally themselves.”

But some customers visiting the store disagree.

“I like to negotiate with a salesman,” says David Graph. “They will go that bit further and give you a discount.”

Another, Carlton Moodie, said he would never buy a car online, as it means missing out on special deals.

“I’d rather negotiate. Online you can’t negotiate.”

Awkward situation

But Maria McCarthy, a motoring journalist, believes many people will be delighted not to have to haggle in person.

“You don’t need a physical person in front of you to offer those deals,” she says.

She also thinks anyone who is not confident in a car showroom can easily feel patronised by sales staff.

“Whether it’s a lingerie department (for men), or a garage on the corner, we’ve all got environments where we feel a bit awkward.

In car dealerships that awkwardness is intensified by the fact that you are going to make a very expensive purchase.”

Image caption

Some people may not be happy to negotiate with the likes of Swiss Toni in The Fast Show

But surely most buyers want to see, or even test drive a car?

All these websites still offer a facility for customers to go to a dealer if they want to, and then continue their purchase online.

However, fewer people now insist on doing so.

For example, since it opened 16 months ago, Hyundai Rockar has found that just 53% of customers opt to drive a car before buying one.

The reason may be their trust in the brand – or perhaps their reluctance to spend too much time on the whole car-buying process.

Prices

Customers using the new websites will find that the prices are fixed.

By going to a dealer instead, they may get a discount of a thousand pounds, or perhaps tinted glass, leather seats or free insurance thrown in.

In other words, it is still likely to be cheaper to go shopping in a car showroom.

The reason is that manufacturers are reluctant to undercut their dealers. So for the moment dealers will still get some money from each internet sale.

Steve Huntingford, the editor of What Car? Magazine, believes car-makers would love to offer direct sales in theory, but they are currently too reliant on their showroom networks.

“There’s an element of you don’t want to upset the dealer and cut them out altogether, because at the moment they know there is a need for them.”

Peugeot themselves confirmed that they are unlikely to offer direct sales, independently of dealers, for the foreseeable future.

“In simple terms, no,” says Andrew Baird, head of Peugeot’s digital and online operations.

“At the moment we think our (dealers) invest an awful lot of money in the brand, and are an absolutely critical part of the business.”

As a result he believes there is little scope for discounted prices on the internet.

“I think that’s extremely difficult with the franchise model that we have, because ultimately the franchisee can sell a car at any price they want. They control the prices.”

Arthur Daley

For the moment then, manufacturers are selling the idea of internet sales on convenience alone.

But that should not be underestimated.

Image copyright
Getty Images

Image caption

George Cole as Arthur Daley, the archetypal car salesman in the TV series Minder

Industry figures show that the average car buyer used to visit three showrooms before buying. Now that is down to one.

Our appetite for physical reconnaissance may be waning, while our confidence in internet shopping is still growing. Ask online clothing retailers, for example.

However, any boom in online car sales may take its toll on those wearing natty suits like Arthur Daley in the TV series Minder, or the master of the double entendre, Swiss Toni.

“I don’t think it will happen for a while,” says Steve Huntingford.

“But I think eventually, yes, the traditional way of buying a car will gradually shrink, and in a couple of generations you can see a time when there is no need for a car salesman.”

NewsCO World & Australian News, Sport, MMA & More

Article Categories:
Business

Leave a Comment

Your email address will not be published. Required fields are marked *