GM’s Saturn Brand went down this road years ago, until other GM brand dealers started squawking.
Data from PwC’s 2022 Car Consumer and Dealer Survey just published indicate that shifting customer behaviors show more than half would consider purchasing an EV. Moreover, auto dealers say that online sales are growing markedly. A majority of car dealers expect at least two-thirds of all vehicle purchases will be done online by 2030. Mainstream adoption of complete online vehicle purchasing is approaching a tipping point, according to PwC. With 49% of car dealers surveyed* reporting that at least 9% of recent vehicle sales took place entirely over the internet.
Now wonder then that Jim Farley, CEO of Ford, has been telling dealers they need to trim $2000 from their cost of selling a vehicle to remain competitive in the marketplace. This of course apples to Ford Motor Company as well. Ford is working on an e-commerce program for purchasing EVs at non-negotiable prices.
Simply put, PwC thinks that there are opportunities for “auto leaders” to introduce new business models that could alter decades upon decades of relationships between automakers and dealerships. Right now the buying process is evolving into a hybrid so to speak. This means there is online information gathering and a visit to a dealership to test drive or pick up the vehicle. “Pricing and financing are the two areas that aggravate customers the most and are shifting strongest to online,” said PwC.
Key PwC Findings
- While just 5% of consumers choose an EV for their last car purchase, 52% of all car buyers said they considered buying an EV.
- 80% of car buyers prefer to visit dealers in person to experience brands and products, test drive and complete transactions. For consumers that have visited dealerships, the top reasons for doing so are to test drive a car (89%), interact with a salesperson in-person (82%) and to experience the car in the showroom (82%) – respondents were asked to choose their top three reasons.
- Overall, nearly four in five consumers (79%) said they completed their last purchase transaction in-person at the dealership.
- Given that the hybrid buying experience is the norm, automakers and dealerships should make sure consumers have a “seamless, consistent and reliable experience as they toggle between digital and in-person channels during their purchasing journey.”
- Online sales are growing in popularity with 49% of car dealers reporting that at least 9% of recent sales occurred online.
- Additionally, 59% of dealers believe online sales will comprise 20%-40% of all sales by 2030.
- 71% of car dealers say subscriptions are a viable franchise business model
- Consumers are like-minded, with 40% saying they’ll consider a subscription for their next car.
Right now dealers are making broad adjustments to meet the customer online, “with the most common being changing the sales process (45%), increasing digital marketing spending (45%), adding new digital marketing tools (42%) and changing the sales team compensation structure (33%). Despite such efforts, only 60% of dealers said they are ‘very’ or ‘extremely’ prepared. Adapting to and preparing for increased online sales will likely be an area OEMs can – and ought to – focus on with their franchises,” said PwC.
*PwC’s 2022 Car Consumer and Dealer Survey was conducted in April, 2022 and including 1,275 US car-owning consumers and 100 owners/general managers of new car dealerships.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Dealers Think Online Sales to Expand Markedly by 2030
GM’s Saturn Brand went down this road years ago, until other GM brand dealers started squawking.
Data from PwC’s 2022 Car Consumer and Dealer Survey just published indicate that shifting customer behaviors show more than half would consider purchasing an EV. Moreover, auto dealers say that online sales are growing markedly. A majority of car dealers expect at least two-thirds of all vehicle purchases will be done online by 2030. Mainstream adoption of complete online vehicle purchasing is approaching a tipping point, according to PwC. With 49% of car dealers surveyed* reporting that at least 9% of recent vehicle sales took place entirely over the internet.
Now wonder then that Jim Farley, CEO of Ford, has been telling dealers they need to trim $2000 from their cost of selling a vehicle to remain competitive in the marketplace. This of course apples to Ford Motor Company as well. Ford is working on an e-commerce program for purchasing EVs at non-negotiable prices.
Simply put, PwC thinks that there are opportunities for “auto leaders” to introduce new business models that could alter decades upon decades of relationships between automakers and dealerships. Right now the buying process is evolving into a hybrid so to speak. This means there is online information gathering and a visit to a dealership to test drive or pick up the vehicle. “Pricing and financing are the two areas that aggravate customers the most and are shifting strongest to online,” said PwC.
Key PwC Findings
Right now dealers are making broad adjustments to meet the customer online, “with the most common being changing the sales process (45%), increasing digital marketing spending (45%), adding new digital marketing tools (42%) and changing the sales team compensation structure (33%). Despite such efforts, only 60% of dealers said they are ‘very’ or ‘extremely’ prepared. Adapting to and preparing for increased online sales will likely be an area OEMs can – and ought to – focus on with their franchises,” said PwC.
*PwC’s 2022 Car Consumer and Dealer Survey was conducted in April, 2022 and including 1,275 US car-owning consumers and 100 owners/general managers of new car dealerships.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.