Future Of Pre-Owned Luxury Car Segment Looks Promising
Increased number of coronavirus infected patients, strict social distancing norms, and continued lockdown in various parts of the country have put India’s growing automobile sector to test. The industry which was once flooded with buyers has now gone on mute for months. Changes in Goods and Services Tax, Shared Mobility, Axle-load guidelines, Bharat Stage-VI (BS-VI) guidelines, Liquidity Crunch, etc., have led to a gradual decrease in demand influencing car dealerships’ revenues and cash flow.
However, to reclaim financial stability, both government and industry pioneers are setting up strategies to capitalize on the post-COVID-19 phase. This is what the future of automobile businesses looks like:
Demand for used cars will flourish
COVID-19 will positively affect the customers’ desires, conduct as well as priorities. In the post-COVID period, concerns with respect to the safety and hygiene will drive customers from public transportation and car-pooling services to personally owned vehicles. Social distance will also be a crucial point for sales soon. As public transports are constantly bombarded with the public in the wee hours, individuals will be inclined to buy private vehicles. Personal mobility will be the top priority once the lockdown is lifted. Since affordability is the key deciding factor, a substantial number of customers will choose to go for a pre-owned car segment.
According to research, 46% of respondents said that they have lowered their financial budget because of the worldwide pandemic. Half of those said that they will buy pre-owned vehicles once the lockdown is lifted. Over 22% of the customers who were intending to purchase another vehicle a year ago said they would now look for a used vehicle due to their restricted financial budget. This particular segment of the automobile industry has developed more than 40-lakh units alone in FY'20, which is just about 40 percent higher than the total car deals. The demand for used vehicles is expected to expand in the coming time as customers searching for customized mobility in a safer condition would request so.
Digital sales over walk-in sales
Carefully produced leads and deals would become the prime focus while capital-induced traditional car dealerships would freeze in time. The countrywide lockdown has fixed the destiny of more than 25,000 brick and mortar businesses offering four-wheelers across India and creating sales revenue of about $100 billion consistently.
As indicated by industry leaders, car dealerships will have to change the way they offer services to their customers. About 300 retail outlets will have to surrender their operations to increasing expenses, including overwhelming rentals, and rising overhead and labor costs. The traditional outlets would take the digital route to attract customers and convert their leads into real sales.
While about five percent of the total car dealerships in the business probably won't have the option to withstand the monetary loss and may even shut down, it's the internet, augmented reality, and machine learning that would turn digital sales into a standard for car sales.
Customer engagement via online channels
In a post-pandemic world, the automobile sector should react to and influence the changing purchase patterns to increase product demand. Car dealerships need to think ahead and individual product awareness and focus on building complete brand support. The thought must be to make brand vocal and to instigate word of mouth publicity. A quick scale-up of supporters will be key to improving sales. In the coming quarters, as OEMs plan to react and recover from the pandemic, brand advocacy will be the most impressive instrument to consider attention from the customers while ensuring sustainability and tastefulness of the vehicle.
Business owners must use multiple platforms to gain their customers’ attention as well as trust & confidence. The global pandemic has put everyone’s future in question, and it is in the time of crisis that businesses could create awareness around brand reliability, post-sales services, and their risk-averseness. Since the market is dull and sales have gone south, prospective buyers will only remember those who were actively involved with their customer segment during the depression. The individuals who are driving the force by offering digital client experience and futuristic plans of action are very much positioned to face this hardship. They are examples of how an intelligent move could create product demand in the market, even in the most stressed times.
The COVID-19 pandemic will significantly affect the customers, yet the degree of this will be clear just when the dust settles. The prime focus should be that in the coming months, demand will significantly increase. What's more, when it starts restoring, buyers and their decisions will impact services and products like never. Organizations must be prepared with convenient backing, customized item variations, and standout omnichannel buying experiences to meet the changing landscapes of revenues and margins.
