auto dealers: Auto dealers not in sync with OEMs on digital dealerships

Mumbai: With the Covid-19 lockdown having brought automotive sales to a record nil last month, automakers are pulling out all stops to woo back customers. Most companies have announced a paradigm shift to digital dealerships. However, the dealers are far from being convinced on this strategy and may see red with the original equipment manufacturers (OEMs).

Hyundai, Tata Motors, Honda, BMW, Mercedes Toyota and Jeep have all announced their digital platform initiatives recently and dealers said that Mahindra & Mahindra (M&M) will soon follow suit. Experts believe that dealers while agreeing to support the OEMs in the short term, look to the continuance of physical dealerships in future.

In the next six-eight months, with minimised physical interaction, we see purchase and service activities moving substantially to the digital platforms, said Veejay Nakra, CEO-auto division, M&M, which has seen online sales bookings increasing from 7-8% to 15% in the recent past.

In order to get consumers comfortable in the digital space, manufacturers have started offering incentives and discounts too.

Vinkesh Gulati, VP of FADA, said online sales for the auto industry is not going to be easy. “Even a colour of car looks different, online and offline. Online traction may be better for niche cars and electric vehicles, clearly not for mass cars. For most car buyers, a car is still a big purchase decision and they have to be cautious that they have made the right decision.”

Dealer sources add that given the Indian auto product line up, customers will buy vehicles post test drives for quality and performance, unlike their European counterparts.

What is irking a large section of dealers is that some OEMs have not explained the finer nuances of their digital play to them. They said online sales is a temporary phenomenon with companies using it during new launches. Companies, however, feel online buying experience is the best solution to offer than a complete disconnect from customers during lockdown.

“The online channel is just a precursor but the actual purchase still happens at dealerships. In this lockdown while customers have increased their digital activity and read more car reviews, the average Indian consumer is still not confident and stops short of buying a car online”, says Kaushik Madhavan, Vice President, Mobility Practice, Frost & Sullivan.

“Many customers will visit dealerships as cars still remains a high involvement product, enabling dealerships to continue. The digital online space is an extension of physical dealerships and an additional source to generate sales”, says Tarun Garg, director ,sales and marketing at Hyundai Motors adding that companies are training their dealerships to get equipped in the online space. Hyundai launched its ‘Click to Buy’ online sales platform last January where their models are available.

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