Lockdown likely to accelerate remote sales of cars
Increase in pre-owned sales provides a glimmer of hope for the embattled automotive industry
While new-vehicle sales in SA plunged 29.7% last month versus March 2019 as a result of Covid-19, used-vehicle sales increased.
Pre-owned vehicle sales on the AutoTrader website — one of the country’s biggest motoring marketplaces — rose from about 30,000 units in March 2019 to more than 33,000 last month.
Though social distancing and the start of the 21-day lockdown caused a 13% decline in March compared with February, this is far from a doom and gloom story, says George Mienie, CEO of AutoTrader.
“The cumulative used-car sales for March is impressive, amounting to more than R10bn, reflecting a year-on-year increase of 14%. There’s little positive news out there, but used-car sales in SA during March do provide a glimmer of hope,” he said.
Searches on the site have also grown year on year, from
26-million in March 2019 to 33-million in March 2020.
The top 10 brands all increased in search volume month on month. The top-selling vehicles in March were the Volkswagen Polo, Ford Ranger and Volkswagen Polo Vivo.
Digital solutions to car purchases that avoid human contact are one area of retail that will get a boost from the Covid-19 crisis, according to GlobalData, a leading data and analytics company.
Mike Vousden, automotive analyst at GlobalData, said: “With governments issuing stay-at-home orders, dealerships have seen customer footfall drop significantly or dry up altogether, leading to markedly reduced auto sales.
“We are already getting an indication of change ahead by seeing how dealers are approaching sales in China, which is a few months ahead of the Western world in terms of managing the outbreak. Geely, one of the country’s largest vehicle makers, has already launched a no-contact car buying service. The disinfected vehicle is delivered to the customer and the keys are sent separately via a drone.”
However, completely “faceless” vehicle buying is not likely to take off in markets used to a more traditional way of doing things.
“Now more than ever, dealers must embrace new methods of selling cars to customers — especially those that allow more of the shopping and buying process to be done remotely. While we expect a relative return to normality once the pandemic passes, we also see a longer-term shift away from face-to-face sales as customers become more cautious about their interactions with others,” said Vousden.
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