Is this the future of new car buying?
Tuesday, 12 May 2020
There can be no doubt that Covid-19 has drastically changed the way we do a wide range of things, not the least of which is buying a car under the soon-to-be-eased Level 3 restrictions.
A number of new car distributors launched 'virtual showrooms' during Level 3, using video calling technology to allow potential buyers to book a time for an online tour of any car they are interested in.
Renault was the first to do this, with Hyundai following suit shortly after.
The process is broadly similar for both companies; customers can go to the respective brand websites and select the model they are interested in, book a 30-minute session between 9am and 5pm on the day that suits them.
**READ MORE:
* Cars under Level 3 Covid-19 restrictions: What you can and can't do
* What Level 3 means for the automotive industry
* New Hyundai Elantra an accomplished entry in a tough market segment
**
An email confirmation will then be sent to the customer with a link to join the call at their selected time.
A product specialist will then talk to the customer live, guiding them through the car and answering any questions they may have. All the features of the car can be demonstrated live during the video call and a range of accessories, such as golf bags, pushchairs, child car seats and luggage will be on hand to demonstrate space.
Hyundai even say they will fire up the hot i30 N for a few cracks and pops from the exhaust if the customer wants to hear the angry little beast.
When the customer is satisfied with what they have seen, a contactless test drive can be arranged, while trade-ins, finance and leasing options can also be discussed over the phone or via video technology.
'It’s the same experience a customer would receive if visiting a physical showroom, the only difference is they don’t need to leave the comfort and safety of their home,' said Andy Sinclair, Hyundai New Zealand's general manager.
And while this sort of thing is necessary under Level 3, there is huge potential for it to become the default way we buy cars in the future - the technology is accessible to the majority of people and is literally as simple as clicking on a link to access the video call.
It also opens up an array of new conveniences, other than just being able to look at a car from your own home - Renault New Zealand's sales and marketing manager, Warren Willmot tells of one call that saw a couple view the same car in one car while the husband was locked down in Christchurch, while the wife was in Auckland.
'It's also very useful for companies, as they can get accountants and CEOs in on the calls as well,' Willmot said.
Other lockdown protocols for contactless interactions at car dealerships have resulted in similar streamlining and conveniences, such as documentation sent directly to a customer's phones when they arrive at a dealership for a test drive, with the customer supplying a picture of their licence the same way.
While Level 2 will allow for customers to return to dealerships, both Hyundai and Renault will continue to offer the virtual showrooms and, no doubt, if they prove popular with buyers could well prove to be a big part of the future for new car dealerships.
While Tesla has an online sales model - it's early-adopter customers have proven far more likely to embrace the digital side of things than traditional car buyers - others have yet to fully take the plunge, with Toyota New Zealand stopping short of full online sales when it launched its 'Drive Happy' programme two years ago, despite piloting an online sales model a few years earlier with the Prius.
The market leader's shift to transforming traditional dealerships into Tesla-style 'stores' - and doing away with the traditional 'hard sell' by removing all new-vehicle stock out of dealerships and locating it in three hubs, with vehicles only sent to stores when a customer has decided to buy - ideally sets it up for a similar shift into the virtual showroom world.
And, indeed, it has taken steps in this direction, with chief operating officer Neeraj Lala saying 'We are all over this and have already had virtual options available for customers for the past two years.
'Demand hasn’t been high, but they are available for those who have established relationships with their local Toyota Store. We will allow our customers to contact our stores and arrange a virtual appointment.'
He also added that Toyota New Zealand was in the process of developing high-resolution 360-degree interiors for key models to support the virtual experience.
Lala's comment about the lack of demand not being high is what has been holding local distributors back from developing the full virtual showroom model until now - while Kiwis have been quick to embrace concepts like online banking, shopping and other forms of e-commerce, that hasn't necessarily been the case in the new car market.
The larger amounts of money involved and that need to actually test drive the car naturally made people more likely to head into a showroom.
The internet has already drastically changed the way we buy new cars, with the brick and mortar dealership moving from the first stop in the process to almost the last - all new car distributors and dealers now say customers are turning up to dealerships having done all their research online, meaning they are only turning up to dealerships to test drive the car and talk deals.
Now that the 'talk deals' part has made its first major moves online, it's only the test drive that remains as the last physical step to make.
Could we be approaching a future where physical showrooms are no longer needed and test drives are conducted by a dealer bringing a car to the customer? It would save massive amounts of money for the industry and make things even more convenient for the consumer, but it remains to be seen if we are ready to embrace it.
But the way that the coronavirus has disrupted almost literally everything in our lives could be the push needed for even more of the new car buying experience to head even further online.