Online retail will become the preferred form of vehicle purchasing among private buyers, according to market research firm Frost & Sullivan.
The company expects online sales of vehicles to reach 1m in 2020 and to grow to more than 6m by 2025. In 2018, more than 618,000 new vehicles were sold online globally, nearly double the unit sales in 2017.
Online channels are expected to become the preferred form of vehicle purchasing among private buyers, but fleet and corporate buyers will continue to favour the traditional retail format.
“The popularity of the e-commerce model among the younger audience and the success of Tesla‘s online retail strategy is likely to encourage other automakers to explore online retail beyond just pilots,” said Isaac Abraham, senior consultant, automotive retail & business strategy at Frost & Sullivan.
“With the emergence of novel purchase models such as vehicle subscription and short-term leases, the dealership of the future is expected to become more experience-centric. Alibaba is expected to be the frontrunner in providing e-commerce solutions in China and is partnering with entrants to maximize its reach in the region.
“Hyundai is likely to introduce its in-house online vehicle sales platform in Singapore, the UK, and Canada, while, Polestar will enter the North American market with online stores leveraging its current Volvo dealership network. Following the digitization of its retail platform, Volkswagen could become one of the best-selling online automotive brands in Europe.”
Separate research from CitNOW found that one in four car buyers will visit a retailer’s website first when researching their next vehicle purchase.
Ollie Parsons, head of sales and client services UK for CitNOW, explained that a retailer’s website is the first touchpoint for many consumers during the car buying process. “That initial impression can help build a lead, or turn them towards a competitor.
“Delivering high quality imagery and video can help transform a retailer’s online customer journey, creating engaging listings that can attract potential customers to your website, and help convert online traffic into footfall.”