11:34 am, March 16, 2021
The changes car dealers have made to their businesses to continue to sell during the pandemic should not go to waste.
That’s the opinion of Auto Trader chief operating officer Catherine Faiers who praised car dealers for their rapid switches to their business models to cope with lockdowns.
In an interview with Car Dealer, which you can watch above, she said consumers are now more comfortable than ever buying online and the changes brought on by the pandemic should be here to stay.
Auto Trader says its research shows nearly two thirds of consumers are now quite happy to buy a car online, a figure that has been growing steadily during the pandemic – and it’s unlikely to disappear when car dealers reopen.
She said: ‘Over 60 per cent of consumers are now open to buying and completing that full end to end journey online.
‘It suggests the barriers that were there for consumers in the past are definitely decreasing.’
Consumers are now more comfortable with not taking a test drive as they get used to distance selling regulations meaning they effectively get a 14-day test drive during the cooling off period, explained Faiers.
She said what was seen in the early days of the pandemic as ‘a barrier to buying online’ has now been removed.
She added: ‘We won’t see online fully replace the current model – 30 per cent of consumers still say that they don’t want to buy online under any circumstances.
‘But there will be a blended retail model where consumers are completing more of the journey online.’
Faiers said that consumers are now buying half of products and services either fully or partially inline and this ‘significant step’ will only continue to accelerate.
She said: ‘What is clear is that the longer the pandemic impacts our lives the more permanent those behaviour changes are likely to be and more competent and embedded they become.
‘The more consumers embrace this way of buying across a number of categories the more likely it is to spread and that growth is likely to continue to accelerate.’
The Auto Trader chief also pointed to research that suggests consumers expect their online buying habits to be ‘sticky’ after the pandemic subsides.
‘There is now quite a lot of data that suggests that these behaviour changes may well be permanent,’ she said.
Faiers praised dealers for embracing the digital changes and said it’s clear that the motor trade has been able to take advantage of the opportunities the pandemic presented.
She also think dealers will continue to enjoy the benefits in terms of ‘profitability and costs’ that selling online offers.
March acceleration
Faiers said demand on the Auto Trader platform in March had grown – with visits last week up five per cent on the week before as 15m consumers hit the site.
She added: ‘Last week’s visits were up 24 per cent on that same period two years ago – we’re using that as our comparison as this time last year began to be impacted by Covid.
‘That proxy sold data is the best indicator we have [on the market strength] as it’s based on the number of unique vehicle registration marks we see being removed.
‘We have seen that step up consistently through January which was 6-70 per cent of usual volumes, up to 70-80 per cent in February. Now we are seeing that at the 90 per cent level.
‘It’s a growing sign that consumers are increasingly looking to get back into the market. They are engaging with the buying journey and now we’re a large number of months into the pandemic they are not wanting to wait any more.’
Pent-up demand
Faiers said she does think there will be some demand for cars when showrooms reopen again on April 12 – possibly up five per cent compared to the same period in 2019.
And she said the ‘positive shifts’ towards car ownership, which have seen people ditch public transport for a car of their own and, importantly, more young people wanting a car, will both be positive for dealers.
She said: ‘Consumers are saying owning a car is more important to them now.
‘One of the most exciting shifts we’ve seen and where we’ve seen the fastest growing audience on our platform is with younger buyers.
‘If you remember pre-pandemic many commentators had written off this group of consumers as not interested in cars.
‘There’s now a lot of evidence to suggest they do want exclusive access to their own vehicle rather than defaulting to other Uber like services.’
She added: ‘When the used car market was open, the transaction volumes were up around five per cent year on year and I’d like to hope we’ll see those levels.
‘I think April will be a bit odd because of the part month, but from May, June, July onwards I hope we’ll see it back at those types of levels if not higher, considering the savings levels and affordability stats we’ve seen.’
Faiers said dealers should continue to ‘expect the unexpected’ as 2021 goes on and to try and keep the ‘agility and responsiveness’ that have seen them excel in the pandemic at the forefront of their minds.
To watch the full interview, you can click on the video embedded in this story.
