The online vehicle retail model is expected to become the preferred purchasing method for private buyers, according to a Frost & Sullivan news release.
Online sales are anticipated to skip past the one million mark in 2020, and cross the 6 million mark by 2025. Private buyers want to focus on the online vehicle retail model, but fleet and corporate buyers will continue to buy cars through the traditional model — for now.
“The popularity of the eCommerce model among the younger audience and the success of Tesla‘s online retail strategy is likely to encourage other automakers to explore online retail beyond just pilots,” said Isaac Abraham, Senior Consultant, Automotive Retail & Business Strategy. “With the emergence of novel purchase models such as vehicle subscription and short-term leases, the dealership of the future is expected to become more experience-centric.”
In China, Alibaba is expected to take the lead in eCommerce solutions, whereas Hyundai is likely to move forward with its in-house online vehicle sales platform in Singapore, the U.K., and Canada. Hyundai already has an online presence, but full 100 per cent purchasing is not yet available (with the exception of its Genesis division in certain countries).
As for other OEMs, Polestar plans to enter the North American market with online stores to leverage its Volvo dealership network. And once Volkswagen goes fully digital with its online sales platform and cloud computing, it may become one of the top-selling online OEM brands in Europe.
What can dealers do to remain relevant during (and after) this period of disruption and change? They may need to consider incorporating the idea of the “experience-centric dealership” in their store.
