Global Automotive Retail

The COVID-19 pandemic reshaped consumer behaviour worldwide, driving a surge in online car purchases. E-commerce became the lifeline, transcending borders. Safety, convenience, and sustainability emerged as universal priorities. As remote work blurred geographical boundaries, cars adapted to accommodate both work and leisure needs. In this blog, we explore how these shifts are reshaping the auto industry across continents. 

Digital Showrooms Have Become A Common Phenomenon 

The traditional car dealership has undergone a digital metamorphosis. Dealers are now offering consumers a virtual showroom experience by incorporating interactive 3D tours with high-resolution images, and detailed specifications. These become interactive experiences for prospects to  virtually “walk” through the showroom. Sites like Carvana, Roadster, and Vroom are also bringing in more transparency into the process by providing online platforms for prospective buyers to compare models, features, and prices online. According to reports, while consumer interest in online vehicle purchases has remained at 59%, increasing access to Internet, greater digital adoption, and a hybrid approach to researching online and buying offline could contribute to the online car buying market growing from USD 237.93 billion in 2020 to usd 722.79 billion by 2030. 

Contactless Transactions Are Becoming A Universal Trend 

As the world goes online, safety has become paramount. Especially post pandemic, customers worldwide are seeking ‘safe’ contactless transaction and payment solutions, because digital paperwork minimises physical interactions and reduces health risk, and the process, from financing to documentation is streamlined. According to reports, 60% of users reported increased comfort with contactless technology during the pandemic, and 74% plan to continue using it even after the pandemic ends. 

Electric Vehicles Are Going Global 

The pandemic ignited a global consciousness about sustainability. Electric vehicles (EVs) gained traction across continents. As of 2023, there are approximately 11 million electric vehicles on the roads worldwide, and China remains the largest market for EVs, followed by Europe and the United States. These regions have seen significant adoption due to government policies, incentives, and environmental awareness. For example, Governments across the world have started offering subsidies, tax credits, and rebates to reduce the upfront cost of EVs. They are investing in charging stations and fast-charging networks. They’re supporting EV research and innovation, and they’re also implementing stricter emission regulations to encourage automakers to produce more EVs. Consumers are also now considering the environmental impact of their choices, pushing the industry toward cleaner, greener mobility solutions. 

Work-from-Anywhere Mobility 

Remote work blurred geographical boundaries. The home office has become the epicentre of productivity. As commuting patterns shifted, so has mobility preferences. Cars have transformed into versatile spaces, accommodating both work and leisure needs. Features like Wi-Fi connectivity, comfortable seating, and advanced infotainment systems have started catering to the global workforce. 

Supply Chain Resilience and Localisation 

The pandemic exposed vulnerabilities in global supply chains. Automakers now prioritise resilience and localisation. From Detroit to Seoul, manufacturers seek regional suppliers, reducing dependence on distant sources. This shift ensures smoother production and faster response times, benefiting consumers worldwide. 

In this interconnected world, the auto industry adapts swiftly, embracing digitalisation, sustainability, and safety. As consumers navigate the “new normal,” cars evolve to meet their changing needs, transcending borders and continents. 

What We Can Expect in the Future 

In the wake of the post-COVID shift towards online vehicle purchases, the automotive retail landscape is undergoing a revolutionary transformation, guided by technological strides, evolving consumer preferences, and the pursuit of enhanced efficiency. Looking ahead, the future of online car sales is poised to reshape traditional paradigms. Digital showrooms and virtual experiences are set to become the new standard, allowing consumers to explore models, compare features, and take virtual test drives from the comfort of their homes. Augmented reality (AR) and virtual reality (VR) will amplify the online car-buying experience, enabling buyers to visualise vehicles in their own spaces. 

Contactless transactions and e-commerce will continue to thrive, with buyers completing the entire purchase process online, from financing to paperwork. Online marketplaces will flourish, connecting buyers with dealers and private sellers, streamlining the buying journey. Personalisation and customisation will play a pivotal role as online platforms offer personalised recommendations based on user preferences, driving habits, and lifestyle. Buyers can customise their vehicles online, selecting colours, trims, and features, contributing to heightened customer satisfaction. 

The utilisation of big data will be integral for dealerships, allowing them to comprehend customer behaviour, predict demand, and optimise inventory. Predictive analytics will guide pricing strategies and inventory management. Car subscriptions are anticipated to gain popularity, providing consumers access to a fleet of vehicles without long-term commitments. Mobility-as-a-Service (MaaS) platforms will integrate public transport, ride-sharing, and car rentals, offering seamless mobility solutions. 

As the electric vehicle (EV) revolution takes centre stage, online platforms will focus on educating buyers about electric mobility, with readily available information on charging infrastructure. Manufacturers are exploring direct sales channels, bypassing traditional dealerships, and online-only brands may disrupt the market, challenging established players. 

While Asia, Europe, and North America lead the digital transformation, emerging markets are catching up, guided by evolving regulatory frameworks that shape online sales practices globally. However, challenges persist. Building trust in online transactions remains critical, requiring a delicate balance between innovation and reliability. Dealerships must adapt legacy systems to digital platforms, overcoming hurdles posed by outdated infrastructure. Cybersecurity is paramount in protecting customer data, necessitating robust measures to safeguard against potential threats. 

In conclusion, the future of online vehicle sales promises a dynamic landscape shaped by innovation, personalisation, and digital integration. As the industry adapts to these changes, addressing challenges and seizing opportunities will be crucial for sustained growth and success in the evolving automotive retail space. 

Merit’s Expertise in Data Aggregation & Harvesting for the Global Automotive Sector 

Merit Data and Technology excels in aggregating and harvesting automotive data using AI, ML, and human expertise. Our capabilities include: 

  • Crafting end-to-end data pipelines and scalable data warehouses 
  • Designing compliant governance solutions for seamless integration 
  • Utilising high-volume, high-velocity data tools for nuanced insights 
  • Extracting retail product attributes and audience data 
  • Aggregating industry-specific data points for informed decision-making 

Trusted by leading automotive brands, Merit drives innovation and efficiency by delivering refined, actionable insights.

Key Takeaways 

  1. Digitalisation Reshapes Auto Retail: Online car purchases and digital showrooms are revolutionising the automotive retail landscape. The future promises augmented reality (AR) and virtual reality (VR) experiences, making virtual test drives and exploration of models standard. 
  1. Contactless Transactions Are Here to Stay: Contactless transactions and e-commerce are expected to thrive post-pandemic. Buyers are likely to complete the entire purchase process online, from financing to paperwork, with online marketplaces connecting buyers with dealers and private sellers. 
  1. Personalisation and Customisation: Future online platforms will focus on personalisation, offering recommendations based on user preferences, driving habits, and lifestyle. Buyers can customise vehicles online, contributing to heightened customer satisfaction. 
  1. Big Data Integration: The use of big data will be integral for dealerships, allowing them to understand customer behaviour, predict demand, and optimise inventory. Predictive analytics will guide pricing strategies and inventory management. 
  1. Electric Vehicle (EV) Revolution: As EVs take centre stage, online platforms will play a crucial role in educating buyers about electric mobility. Direct sales channels and online-only brands may disrupt the market, challenging established players. The future also anticipates the rise of car subscriptions and Mobility-as-a-Service (MaaS) platforms integrating various mobility solutions.

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