Road to Recovery: Auto Cos Go Digital

According to a Gartner Report - COVID-19 containment measures are forcing the closure of car showrooms in many countries, and this is also increasing the requirement for a full and effective online purchase process. Although many consumers will be hesitant about purchasing a car in the present circumstances, OEMs and car dealerships still need to offer more flexibility.

“OEMs and car dealerships must set up direct sales platforms on which users can buy a car in just three clicks and have it delivered to their home. This model should be used for both car configuration and inventory.” Says Pedro Pacheco, senior research director at Gartner.

With the whole country under lockdown, manufacturing and sales channels shut, the situation although very grim, does present an opportunity for vehicle manufacturing companies to bolster its digital footprint eventually building a strong online sales platform.

“Speed of change is crucial for OEMs and car dealerships’ survival in times of confinement and insecurity,” said Pacheco. “Given factory and showroom closures, it is essential that car makers draw up a strong online order book to ensure that, once factories and showrooms reopen, they can quickly rebound financially."

Indian Carmakers Go Online

Indian Auto Manufacturers hit by a double whammy of BSVI emission rule and the COVID pandemic are taking steps in this direction.

For instance, India’s 2nd largest automaker – Hyundai Motors has introduced its end-to-end online sales platform - “click to buy” incorporating 500 dealerships across the country. “The ‘Click to Buy’ platform will act as an additional sales channel for all our Dealerships across India thereby creating additional opportunities for remote interaction with customers and facilitation of sale even during periods when customers are unable to visit showrooms.” says SS Kim, MD & CEO, Hyundai Motor India.

Home grown Auto Maker Tata Motors has also introduced ‘Click to Drive’, an end to end full online sales experience enabling customers to buy a Tata Motors cars online. The company has integrated more than 750 outlets across the country on this platform and will be offering home deliveries of vehicles once the COVID19 situation settles down. Vivek Srivatsa, Head – Marketing Passenger Vehicles, Tata Motors tells us “New business models are emerging as a result of digital; and we are gearing up to newer ways for customers to experience and consume our products, which also includes subscription-based models”. The company is also using online communication tools such as emails, WhatsApp and video calls to complete the entire sales process virtually.

Sohinder Singh Gill. CEO, Hero Electric and Director General of the SMEV, thinks otherwise – “Online Sales is not that important in the current scenario because if the person who is not moving out of his house, then any vehicle electric or IC will not make sense. And once he starts moving out of the house buying a capital asset costing Rs. 50,000 and above, you can easily take precautions and visit a showroom.”

French auto major Citroen, which is a part of the PSA group, which will make its India debut with its C5 Aircross SUV, plans to use a ‘phygital’ approach while entering the highly competitive Indian market, where already many foreign carmakers are present. The Company says “Our focus will be on an all-inclusive digital platform which will integrate seamlessly with the physical stores. We call this the PHYGITAL NETWORK, where we will combine digital technology and physical stores to offer a seamless Customer experience for our customers.”

Citroen, which would be the second French automaker after Renault to enter the Indian market, plans to initially open stores in Ten Indian Cities with a focus on the digital experience within the store. “The digital-first approach is inspired by new-age Indians leading digital lives. We aim to bring about digital disruption through our ATAWADAC initiative for seamless digital customer experience – Any Time, Any Where, Any Device, Any Content – A disruptive experience created for India and will be taken to the world”.

In the Luxury segment a lot of players have digital sales platforms in place, German carmaker Mercedes Benz has an online store www.shop.mercedes-benz.co.in for customers to book their car with home delivery option. The company has received a positive response since the started their online platform and all car-buying formalities are assisted by the nearby Mercedes-Benz dealerships. “We believe that ordering a car should be as easy as ordering food online – a significant part of our total sales by 2025, will be online” says Martin Schwenk, Managing Director and CEO, Mercedes-Benz India.

Jaguar Landrover India has had the online sales platform for more than four years now. For Jaguar cars, the website is findmeacar.in whereas for the Land Rover vehicles, it is findmeasuv.in. The company says that the response has been quite positive. However, no specific observations (during the lockdown) were visible.

Purchasing a car has always been an emotional decision in India,The touch and feel factor and the element of bargaining at the dealership has been a major part of purchasing a vehicle.

“In India, a car is still the second most expensive purchase after a house, so there is always a touch and feel factor and a family element involved there. this is typically the case with first time buyers, but increasingly there are people who are people who are buying their second vehicles, they understand the buying process they research online, configure it online and are open to buying it online. This online retail is aimed at a particular segment of customers who probably are more comfortable negotiating and carrying out a deal online.” Says Kaushik Madhavan from Frost and Sullivan. 

At the same time Digital is not just about sales says Mr. Sohinder Gill “But more than sales, Digital Marketing, Digital Awareness, Education and PR is going to be the main thing because due to the country wide lockdown people are glued to their television, computers or mobile phones.”