Fearing sharp decline in footfall at dealerships in the coming months, automobile manufacturers are focusing on selling their cars through their respective online portals
Dealers are an integral part of the automobile retail ecosystem and the latest push to increase sales through digital platforms by Original Equipment Manufacturers (OEMs) will add an extra revenue stream for dealers, said senior executives of leading automobile manufacturers.
Fearing sharp decline in footfall at dealerships in the coming months, automobile manufacturers are focusing on selling their cars through their respective online portals. As the covid-19 pandemic hit demand starting March, vehicle sales crashed causing huge losses for dealers and auto companies.
Country’s second largest passenger vehicle manufacturer, Hyundai Motor India Ltd, was the first to introduce its own Click-To-Buy platform in March, when the crisis started. Japanese vehicle manufacturer, Honda Cars India, also launched its digital platform for vehicle bookings -- Honda from Home -- to help customers who don’t want to visit dealerships for vehicle enquiries or purchase.
They were followed by the likes of Maruti Suzuki India ltd, Mahindra and Mahindra Ltd and others, who also started pushing sales through respective online channels.
According to Vijay Ram Nakra, chief executive, automotive division, Mahindra and Mahindra, vehicles at the end of the day have to be delivered and serviced by the dealer and so the dealers will continue to play a very important role, but they will need to adapt to the new way of transacting.
“The OEMs and dealers will continue to work together in finding new ways of engaging with the customers. All our 300 dealers are fully integrated to Mahindra’s own online platform. The customers always have an option of make bookings online by putting in a small amount and then the nearest dealer will connect with the customer and take the transaction offline from there," added Nakra.
With significant decline in affordability of customers due to the economic downturn, auto makers and their dealers is set to witness an unprecedented fall in vehicle sales in FY 21.
Sales of passenger vehicles can decline in the range of 24% to 26% in FY 21, according to a forecast by ratings Crisil. As economic activity is likely to suffer significantly due to the pandemic, sales of commercial vehicles will also decline in the range of 26% to 28% during the year.
“We are trying to give dealers another channel (to earn revenues). Dealer profitability and satisfaction is our main focus," said W. S. Oh, executive director, corporate planning, Hyundai Motor India. “We will offer special incentives to customers who will buy cars from Click to Buy and the incentive scheme might start from July."
Expecting more potential customers use e-commerce or digital platforms to purchase big ticket items like cars, in the coming months, Hyundai Motor India Ltd – country’s second largest passenger vehicle manufacturer – on Wednesday, launched an updated version of its vehicle research and selling platform, Click-To-Buy.
“There are 28 touchpoints that a customer has to go through till the actual delivery of the car, according to our survey, and out of that 17 to 21 touchpoints were already digitalized. What OEMs, including Maruti, are trying to do is to make these 28 points as much digital as possible. Now, car delivery and test drive will have to be physical," said Shashank Srivastava, executive director, sales and marketing, Maruti Suzuki.
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