Dealers increasingly turning to digital

Dealers in the UK say they will increasingly adopt a multi-channel approach to vehicle stock acquisition, according a study by Cox Automotive UK.

Two-fifths of dealers say they have increased their use of digital auction platforms since being forced into lockdown because of the coronavirus pandemic, with 49 per cent of those indicating this will be a long-term change.

The latest sentiment survey also shows just seven per cent say they have no intention to buy digitally, while 20 per cent plan to go online in the short-term but will return to physical buying as soon as possible.

Two-thirds of those surveyed say they expect their use of physical auctions to stay at pre-Covid-19 levels in the medium to long term, while 13 per cent expect their usage to increase. 

Philip Nothard, customer insight and strategy director at Cox Automotive, says the lockdown has accelerated adoption amongst those businesses yet to embrace digital auctions. 

“For a sizeable proportion, the survey indicates that this usage will continue to become the ‘new normal’,” adds Nothard, pictured.

“However, it’s also evident that when auction halls can safely reopen, plenty will be keen to once again be back in the lanes. Despite the inherent efficiency and convenience of digital channels, the social interaction, hands on access, and pure theatre of the physical auction remains a powerful attraction.”

Sticking to prices

The sentiment survey also shows nine in every 10 dealers across the UK have no plans to cut their used car prices as face-to-face trading picks up.

Of those questioned, 54 per cent say they’ll hold firm on prices, while a third say they’re waiting for market data before deciding. Less than 10 per cent plan to implement reductions across the board.

This price position comes despite of dealers ranking cashflow as their second most pressing concern since the lifting of lockdown measures in June.

“It’s reassuring to see the overwhelming majority of dealers taking a calm and sensible view of their pricing strategies, despite the pressure they inevitably feel to get cash flowing back into their businesses,” says Nothard.

“It’s absolutely right dealers wait for market data that’s based on actual transactions now. We expect unusual things to happen with used prices over the coming weeks as supply and demand imbalances work out.”

Trading shifts Stateside

Cox Automotive experts in the US have also looked at how the automotive industry plans to take steps toward a recovery from the Covid-19 pandemic. 

The company’s Covid-19 Digital Shopping Study 2.0 aimed to gain an understanding of how the global pandemic has impacted vehicle shopping habits, how vehicle consideration has changed, and how luxury shoppers’ purchase decisions differ from non-luxury shoppers. 

A total of 1,125 consumers were questioned in late April as part of the study, with 575 of those questioned in the market for a vehicle, most of them leaning toward a new car. 

The survey reveals that with the economy in recession and unemployment elevated, consumers are interested in the “right deal”. Nearly half of consumers have also reconsidered their price point for a new vehicle.  

The interest in electric vehicles has increased since Covid-19, especially among luxury buyers. 

Consumers also want to do more business online, with two-thirds of those surveyed more likely to complete their purchase of a vehicle digitally.   

Vanessa Ton, senior industry intelligence manager at Cox Automotive, says vehicle buyers in general will be more focused on price, monthly payments and cost of ownership in the wake of the coronavirus. “While we will not see a major shift in what consumers are buying, we will see a shift in how consumers buy vehicles,” she adds.