Dealers remain vital as appetite for online auto sales grows


Consumers are becoming increasingly confident about buying a car online, but the vast majority still want to visit a showroom during the process, according to new research.

Automotive e-commerce solutions company iVendi found that 87% of consumers feel that visiting a car showroom is an important part of the car buying process, even though 79% would be confident buying online.

A potential barrier to greater uptake of online offers is that 57% of consumers believe that motor retail lags behind the best online retailing experiences in other sectors.

James Tew, CEO of iVendi, said: “This independent research, undertaken with the help of APD Global Research, looks in detail at the views and the plans of new and used car buyers, car dealers and motor manufacturers, illustrating their attitudes towards online motor retail today and into the next few years.

“The overarching message from all three groups is that online motor retail is set to grow, probably rapidly and substantially, with increased investment from dealers and manufacturers, and increased trust and activity on the part of consumers.

“Importantly, all agree that dealer networks will remain an essential part of the process.”

The research also covered the attitudes of car dealers and found that only 6% offer the option to buy online, although 43% plan to increase their online retail activity in the next 18 months. Despite this, 83% say it remains important for the customer to visit the showroom.

The company also assessed the views of manufacturers and found that 33% plan to offer the option to buy and finance a car online within the next 18 months, with nearly three-quarters planning to increase investment in this area.

Furthermore, 91% of manufacturer respondents felt existing dealer networks should be involved in online retail.

Tew added: “These findings act as an important counterweight to some of the more outlandish claims that have been made about how online retail will change the motor industry.

“It shows that online retail will become much more important and relatively quickly so – but it also indicates a future where the dealer remains a key element of the buying process.”

Overall, the research points to the rise of the omnichannel consumer, who may switch between online and physical retail experiences throughout their buying journey.

Tew said: “What consumers want, it indicates, is a high degree of flexibility. Consumers are comfortable with online retailing and finance when considering a car but they have concerns based around the requirement for security, the need to see the physical vehicle and the desire for ease of experience. The dealer is still perceived as important in the sales process for a new car.”

When asked about general confidence regarding online security for a large purchase, 61% of consumers responded positively and said that they may choose to buy a car entirely online. For online car finance, this confidence rose higher still.

New innovations in car provision and finance have put the dealer at the heart of the process, most recently the rise in vehicle subscription services.

In the US, used car subscription app Fair allows users to find and fund a car entirely online using its app, with funding approval sourced by scanning a driving licence.

Vehicles are sourced from stock held at nearby dealers, who take a key role in service delivery by delivering and collecting vehicles.

In a recent development, Volvo responded to changing customer expectations by offering them the opportunity to book a test drive online through Amazon, although the initiative was only for a short period in a few UK cities, including London.

Dealers delivered and collected the test drive vehicles and any purchase enquiries were also directed to the local retailer.