The web is catching on for car sales

Posted on August 27th, 2013 by James Luckhurst

Screen Shot 2013-08-15 at 13.15.18As Mercedes-Benz starts online sales of its vehicles, research shows how increasing numbers of Britons are happy to use the web as a way of buying cars directly.  In the week when luxury manufacturer Mercedes-Benz further embraced the digital age and launched plans to allow customers to order and finance new cars through online shops, research by  GfK reveals how tech-savvy younger Britons are increasingly embracing the idea.

Among the key findings of GfK’s ‘Future Trends’ survey:

  • Nearly one third (31%) of under 35-year-olds would buy a new a car directly via the internet. At 28% the figure is only slightly lower for older drivers
  • The experience of going to a dealership is changing, with as many as 80% of potential new car buyers having all the information they need on a particular car before stepping into the showroom. People now come to view a car model for reassurance and for a test drive – rather than to be ‘sold at’
  • Social networks are playing an increasingly important role in the decision making process. 16% of under 35-year-olds use Facebook for research before buying a new car vs 2% of older drivers

Manufacturers such as Vauxhall, Nissan and Audi are responding to the role of the internet in car buying by launching virtual showrooms and demonstration centres.  From salesroom banter to digital dealing “BMW’s recent decision to make their new i3 electric car available to buy online is a significant event,” observed Damian Long, Divisional Director for GfK Automotive. “With Mercedes-Benz also announcing plans for online sales in Germany by the end of the year, buying cars directly from manufacturers via the web is only going to gather momentum.

“Although they’re at different ends of the market, Renault’s Dacia brand is already selling its low-cost cars via the web to defend its leadership of Europe’s buoyant budget vehicle market. And with the world’s biggest search engine set to enter the market, the next place you buy a car may soon be Google. The move should revolutionise the market, improving transparency and empowering consumers as automotive pricing data becomes increasingly normalised and easily searchable.”

At the start of the Millennium, the automotive industry was confidently forecasting that new car buyers were about to enjoy the benefits of online purchasing. Unfortunately the predictions proved premature.  “It’s fair to say that so far both car makers and the public haven’t been able to capitalise on the transactional benefits the internet has offered other sectors,” said Joe Vaughan, Research Manager at GfK Automotive. “But we’re now at a tipping point where the auto industry is revisiting the principle of leveraging the web as a sales channel. The signs look a lot more promising this time.

“Car manufacturers like Mercedes-Benz are responding to changing attitudes towards car ownership and how the public research and buy their car of choice. But as our research shows, they need to combine online sales opportunities with experiential marketing. Demonstration centres like Nissan’s Brand Centre at the O2 Arena, road shows and pop-up dealerships will be essential to give customers that all-important chance to see and try their preferred car in the real world before purchasing in the virtual one.”

In GfK’s survey, while nearly half (45%) of owners agreed that negotiating over the price of a car is something they enjoy doing with a dealer, opening up the internet for car sales will allow buyers to choose the purchase process that suits them best.  A move to easier online purchasing at a fixed price with all the financial information up front is likely to make the journey smoother for those who don’t enjoy negotiation.