The COVID-19 pandemic disrupted the world placing severe limitations on mobility and measures such as social distancing and lockdowns were necessary. This hit every industry across the world including automobile dealers.
While potential customers are preoccupied with health and safety concerns some still face mobility restrictions in other parts of the world. Due to restricted mobility a huge section of labor works from home and this also impacts sales. Car sales for dealerships at the moment seem rather bleak. A number of dealerships had to close down with car buying grinding to a halt. Automobile sales plummeted worldwide with a 47% drop in the United States.
However, there is light at the end of the tunnel and economies are picking up again. This revitalization has automotive OEMs, car dealers and government executives wanting to know projected recovery trajectories. Global studies by McKinsey show an overarching trend of recovery across various regions along multiple indicators.
Car Buying and Servicing Trends
In relation to shopping for cars, consumer purchase intent is still 14% below pre-COVID levels. However, this is still a 4% increase since the previous survey at the end of May.
- Out of those surveyed in the US, residents are more focused on their pre-COVID purchase intentions as opposed to Electric Vehicles (EV) or Plug-in Hybrid Electric Vehicles (PHEV) and Advanced Driver Assistance (ADAS) features.
- Digital interactions are becoming increasingly in demand across the entire purchase funnel. Respondents across all demographics prefer contactless services with approximately half willing to pay extra for it.
- New and used car intent to purchase is up by -10% and -7% respectively in comparison with pre-COVID numbers according to McKinsey.
- The number of consumers who purchase “independently of discounts” has increased across all markets revealing an increased purchase intent.
- Higher income households in particular have displayed an increased purchase intent across all those surveyed.
Mobility Trends
- One third of consumers place greater importance on a private means of transport post-COVID-19 to protect their health.
- 52% of respondents do not travel as much as they used to pre-pandemic.
- Switching from public transport for long distances such as air travel and trains are being opted out for private vehicles for inter-city travel.
Clearly there is a preference for private vehicles for transport and this is good news for automobile dealers.
Informed Consumers View Your Product through A Digital Lens
In today’s digital era, consumers are highly informed about the products and services they are interested in. This is thanks to the plethora of information available via the internet, social media and even voice searches through Alexa or Siri. Hence, online research is the biggest contributors to the decision-making process. In the case of automobiles, consumers aren’t making their decision to purchase based on the vehicle and its features alone. They’re also looking at the messaging and brand image that the company conveys making the decision process more complicated. The key take away from all of this is that automobile dealers must provide thorough vehicle information and enticing brand messaging to increase their sales. Building a strong brand image online is part of sealing the deal.
Personalization Is the New Normal
The concept of personalization has been around for a while now and has been a buzz word for manufacturers everywhere. However, it is no longer a nice to have optional aspect as today’s consumers expect genuinely personalized and tailor-made experiences wherever they go. Thus personalization is imperative in order to meet customer expectations and close sales. Pushy sales tactics are outdated and more likely to drive away customers than lure them in. It is important to take make your consumers feel nurtured and valued. This necessitates a customer-centric approach instead of a product-centric approach to sales. Taking the time to truly understand who your customers are, what they want and how you can meet their desires through personalization is essential.
When functioning in a highly competitive industry such as automobile sales it is imperative to take new digital innovations into account. In the aftermath of COVID-19, digitalization is imperative to meet customer expectations and drive sales. Cater to consumers and achieve greater agility with SalesCatcher’s Intelligent Offering (iO). Our AI orchestration platform – iOFlow, working in tandem with our intelligent RPA tool – iOBot can create a highly customized experience for each of your consumers. If you’d like to find out more our AI team at SalesCatcher would be happy to help.
