Op-Ed by the Editors
2021 isn’t over but many people seem resigned to the fact that it won’t be a good year for car makers, and the way things are going 2020 could only be described as diabolical.
One way it might improve – and possibly the only way it can improve at the moment – is through online sales. At this time of crisis auto dealers can no longer rely on a friendly handshake (this is no time for cynicism so let’s just say it is a friendly handshake) to deliver on a deal. Studying the statistics, this old system will need to change drastically. J D Power’s figures measure the first 19 days of March verses previous years at the same time and demand has dropped 13%. Things are even more drastic in places such as LA and Seattle with a 22% drop in just a 19-day period.
So how do online services compare? Roadster, which serves US and Canadian dealers shows an increase in 6%. Tesla uses a similar system relying on internet deliveries and an app. Unfortunately, Tesla relies on signed paperwork being taken to a drop off point. How this would continue to work during these emergencies isn’t clear.
So, the most innovative way to do sales in the future could be an app but then again people are wary of parting with huge chunks of money online. Even a seller such as EBay recommends seeing the automobile before parting with cash.
It seems counter-intuitive to work this way but even when the covid restrictions lift fully, the recession will likely go into full swing and somehow business enterprises must carry on. Dealers haven’t embraced the online market as a major source of revenue but a recession could change that.
An idea being test marketed is trying the car for a week and seeing if they like it. How exactly this method works isn’t clear. Supposing a person doing the trial refuses to give it back? Surely there is workarounds for such things, but the adverts don’t spell those out.
We can’t just rely on the showroom. It’s an antiquated way of doing things which continued because “it seemed to work” or “it’s what the customers are used to.” Or most likely it’s highly lucrative for dealerships. At the moment however, it fails to work, customers just can’t use these methods in purchasing a car, they can’t get out of their home in many cases.
Some dealers like Chrysler are adapting to new ways of working. Prospective customers can explore the latest models on FaceTime as the sales agent walks around the lot.
It’s one way to keep money in circulation but maybe we can do more. After all, if not now when?