Dealer group bosses predict just 10 per cent of sales will be made online within five years – and ‘even that’s ambitious’

Time 5:04 pm, October 27, 2020

Just 10 per cent of new and used car sales will be made online within the next five years, believe industry leaders.

Speaking at a CarGurus Navigate conference session, hosted by Car Dealer Magazine founder James Baggott, industry leaders predicted what percentage of sales they thought would be made fully online in the coming years.

The panelists were in agreement that they expected just 10 per cent to be at the top end of the number of their sales to be completely online within five years.

Head of marketing for used car supermarket Carbase Alex Jones said that his business has been delivering cars to customers’ homes for 20 years – but there hasn’t been too much demand.

Joining him on the panel, were Clare Wright, Jardine Motor Group’s HR director and Marshall Motor Group CEO Daksh Gupta.

Wright said that while Jardine had seen an increase in demand since lockdown through their Rockar business and Auto-e GForces online channel, she doesn’t think it will ever make up as much as 80 to 90 per cent of their sales.

She said: ‘It’s about experiences and I think our centres will become more experiential.’

Jones added: ‘I do think people are willing to buy cars online, but it’s the percentage.

‘There’s a huge appetite for customers to start the journey online and reduce time in the showroom. I think people like the simplicity of that.’

When asked how much penetration they predicted online sales would have in the next 10 years, all three speakers were closely aligned.

Jones said: ‘I think for nearly new, up to a year, that percentage could be high. For five to fifteen-year old cars I don’t think there will be the same appetite.’

He added that number as high as 20 per cent of sales carried out online seemed ‘very ambitious’, but added that he could see an appetite from customers who wanted to save time.

He said: ‘We’re doing completion that we could turn into end-to-end to improve efficiencies, but we’re talking about single digits at the moment. I think 10 per cent could be achievable.’

Gupta was in agreement saying that ‘in newer cars you’ll see a higher uptick’.

He said: ‘I think between five to 10 per cent. I don’t think it’ll be much more than that.’

Wright added that she thought it was still aspirational, but they were aiming to transact around 10 per cent online.

She also explained how using video calling had made a big difference, with higher conversion levels from customers they’ve spoken to ‘face-to-face’ in this manner.

Jardine has introduced a policy that anyone who doesn’t need to work in the dealership now works from home.

She said: ‘All of our head office functions are working from home. That’s a permanent decision we’ve made unless colleagues say it doesn’t work for them.

‘There’s no reason to change it because it works incredibly well.’

Gupta added that Marshall had seen similar simplifications in their business by using technology, saving time and money by using Teams instead of hosting conferences.

He said: ‘What we’ve been doing is management briefings on Teams. We were doing these literally every week.

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‘The ability to communicate like that is very powerful.’

When it comes to a potential second lockdown, Jones added that having these systems in place would make it much easier than first time around.

You will be able to watch the broadcast back on the Cargurus Navigate site here.

Rebecca Chaplin's avatar

Rebecca has been a motoring and business journalist since 2014, previously writing and presenting for titles such as the Press Association, Auto Express and Car Buyer. She has worked in many roles for Car Dealer Magazine’s publisher Blackball Media including head of editorial.

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