One in five cars to be sold online in a decade, costing 27,000 UK jobs
18 May 2017
Online car sales could cost 27,000 UK automotive sales jobs by 2027, when one in five cars will be sold on the internet, according to the Centre for Economics and Business Research (CEBR) for Trustpilot.
Based on consumer data, the research suggests that in just three years’ time, almost £1.5 billion (€1.75 billion) worth of sales will be conducted online by the turn of the decade.
CEBR economist Christian Jaccarini said: ‘As automotive retailers establish online platforms and consumer behaviour adjusts, we expect to see car sales shift online, as seen in other industries.
‘Transaction numbers may be small at present, but recent evidence suggests that businesses which fail to accommodate changes in consumer behaviour will leave themselves exposed in years to come.’
Trustpilot UK managing director James Westlake said: ‘Competition will be stiffer than ever, as dealers will be forced to compete across both traditional and digital sales channels.’
This will make it far easier for consumers to compare prices and offers, and the local location advantage of dealers will be less of a factor; if necessary, people may be willing to travel further for better deals.
Westlake added: ‘The key to winning this race is not just on price, but by generating consumer trust and confidence to buy a car through their platform.’
The Capgemini study on Tuesday revealed that a third of customers are now willing to buy their car online. Notably, while two years ago this was largely restricted to premium buyers, this has now shifted to volume buyers being much more likely now too. Among volume customers, 39% are now very likely to buy their next car online, up considerably from 31% in 2015. The percentage continues to approach half for all premium buyers also, now at 47%, up from 45% in 2015.
BMW has been selling new cars in the UK since 2015, and is looking to expand the service to Germany. The business goes through its dealer network, which BMW believes is an important part of the current consumer package. Head of BMW sales in Germany Peter van Binsbergen points out that while many go online to acquire information about a purchase, those ‘who actually press the ‘order’ button online are very few.’
Tesla is notable for conducting a large number of direct sales, bypassing dealer networks.
Sixt Leasing meanwhile is pushing hard to make its online platform ‘the largest business segment of the group,’ saying it is the last large market in Germany yet to digitise. Board chairman Rudolf Rizzolli stresses its customers do not want to buy cars, but buy mobility services – following the surging trends in the industry – and that this is best done online.