Car dealerships online: new cars at the click of a mouse

Shopping is becoming more digital, and that also applies to buying a car. Sales of new cars on the net have increased. Government purchase premiums also have a downside.

3, 2, 1. it takes less than ten minutes to buy a Tesla online. Photo: Ding Ting/XinHua/dpa

The path to owning a tesla is short. It takes less than ten minutes to reach your destination on the manufacturer’s website. Select a model, color, rims, interior – and the customer journey reaches the checkout after just a few clicks. Payment, leasing or financing is by credit card, bank transfer or immediate payment. If required, delivery is made by express and directly to your doorstep. The customer receives the appointment by e-mail or SMS. "as soon as the vehicle arrives, you simply sign the relevant documents and can be on your way in a matter of minutes," promises tesla.

More than 320.since the beginning of the year, the u.s. carmaker has used this or similar digital channels to sell thousands of its electric cars. A record in the middle of the corona crisis, in which the sales figures of the car industry as a whole have plummeted by more than 20 percent. This is no coincidence. "companies that were able to address their customers digitally even before the lockdown have a massive competitive advantage," analyzes a recent mckinsey study. This also applies to the car trade, which is expensive for manufacturers (30 percent of total sales) and with which, according to the study, only one percent of customers are satisfied.

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Corona brought a boost to digitalization, report operators of online portals for new or used cars. "people are now more likely to buy products online that they wouldn’t have expected to in the past. the corona crisis has strengthened this trend," says rudolf rizzolli. Rizzolli is managing director of mobility holding, to which meinauto belongs.De gehort, the market leader for online sales of new cars and new car leasing in germany. "In addition, there is a trend toward monthly installment payments, leasing or subscriptions. This lowers the inhibition threshold for online purchasing." sales of new vehicles via the platform almost doubled compared to the previous year.

Significantly more demand for mobile.De and meinauto.De

Also at the online vehicle dealer mobile.De, which mainly offers used ones, shows the trend. Around 1.5 million cars, commercial vehicles and motorcycles are advertised on the platform (including 140.000 new cars), the largest range for buying and selling vehicles in germany. "digitalization in car buying has been beamed forward a few years," says managing director malte kruger. "the entire industry must now adapt to this more strongly."Customers are making greater use of digital formats and also want online offers for topics such as financing, leasing or concluding contracts.

Some dealers or manufacturers offer the digital process themselves, most use the relevant new car portals. Completely digital processing of the purchase or financing, as with Tesla, is the exception; in most cases, the customer is ultimately redirected to a dealer. There are no figures on how many consumers have shifted the entire purchasing process to the internet and had their vehicle delivered to their home. There are probably not many of them yet.

Portals like meinauto have made it out of the niche.De, carwow or autohaus24, which manufacturers use to sell pre-configured new cars. As many as one in ten new car buyers in this country bought their car via such a platform in 2019, according to market researcher deutsche automobil treuhand (DAT). figures for the current year will be available in january 2021.

"more and more people are placing less and less value on individual equipment and brand loyalty," says rudolf rizzolli. "this is also related to the de-emotionalization of the car in general." another reason: manufacturers have to save money and are reducing the variety of models and equipment variants. This lowers costs and simplifies the sales process.

Countertrade. Gravis has been selling Debitel products in its stores since 2011, like here at Ernst-Reuter-Platz. Photo: Christian Mang

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premiums put residual values for used vehicles under pressure

This can be seen in the new electric cars, such as the VW ID.3, which are only available in defined equipment variants. VW had also announced its intention to focus more on the digital direct sale of cars and future electric models. Manufacturers are addressing customers’ uncertainty about whether to buy an e-car by offering favorable leasing or subscription models with one-, two- or three-year terms. This is where the online platforms show their advantage.

"The proportion of leasing customers is particularly high for e-cars," reports mobility holding’s head of sales, rizzolli. "after the increase of the purchase premium in the summer, the demand has gone through the roof." at times there have been more inquiries for electric vehicles than for diesels. However, the ramp-up of electromobility, spurred on by government purchase bonuses and tax benefits, has its downsides, which online providers are feeling particularly in the area of financing. because the cheaper new cars become, the greater the pressure on residual values and thus on used car prices.

"as financiers, we take an extremely critical view of plug-in hybrids in particular, with a view to residual values," says rudolf rizzolli. Purchase premiums for phevs are criticized because the vehicles are rarely driven electrically and therefore consume much more fuel than the manufacturers officially claim. "if the vehicles are far less efficient in everyday use, what value do they still have as used cars? Why should a private customer pay more than for a conventional vehicle??" asks rizzolli. rizzolli sees similar distortions for pure e-cars, especially small vehicles, which can only be sold as used cars at high discounts, as long as new cars are artificially cheapened with premiums.

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