With 77% of respondents wanting to limit the use of public transportation over the next few months, contactless sales the way forward for Automakers

It is a known fact that the COVID-induced lockdown has kept customers away from buying or leasing new cars at dealerships as they normally would. Going forward, a car buying experience for a wannabe customer will never be the same again thanks to the hangover of social distancing norms and enforced quarantine policies. As a result, digital and “contactless” sales with minimum human intervention, kickstarted by many carmakers earlier, will be the mantra going forward. 

Maruti Suzuki India Limited (MSIL), which lords over half of the country’s passenger vehicle market, had chalked out a digital strategy-hyper-local enquiry management system for its dealers. And that gambit eventually paid off as the company now derives 15-20% of its numbers from the leads generated by online medium. The company recorded a 40% jump in digital enquiries in March and over 70% jump in April, both on a month-on-month basis. 

“Three years back, we derived just 3-4% of our total numbers from web enquiries. The contribution went up to 10-12% and nearly doubled to 20% during March this year. The trend was already there, but it’s been accelerated since media consumption is now majorly happening on the digital route. It is giving us rich dividends in the current scenario and I won’t be surprised if 40% of our sales is derived the leads generated by the web,” reveals Shashank Srivastava, Executive Director - Sales & Marketing, Maruti Suzuki India, while talking to BW Businessworld exclusively.

According to the research report prepared by Deloitte, there is a rising interest amongst the consumers to buy their next vehicle online given the advisory by the Government of India and the health professionals to make contactless purchases. Given the trend of buying cars online, the trend of e-commerce platforms for an end-to-end online car purchase is likely to find more acceptance among Indian customers.

In a sample survey of 1,000 people in the age group of 15-55 from various cities, Deloitte found out that 77% of respondents wanted to limit the use of public transportation in the next few months. And 71% of respondents said they want to limit the use of ride-hailing services like Ola, Uber, etc. 

Rajeev Singh, Partner and automotive sector lead at Deloitte India, “Seeing the current trends, small cars and pre-owned vehicles are the segments which are expected to see a massive offtake in the near term.”

Meantime, some of the leading car brands especially in the premium or luxury space such as Honda Cars, Volkswagen, Mercedes Benz, BMW, etc., have started dedicated online portals and embarked on digitalisation of consumer touch-points in order to offer a convenient purchase experience to its customers. With digital solutions, backed by the streamlined sales process of the dealership, customers can manage their car purchase from the comfort of their homes without having to visit the dealership. The platforms allow customers to browse through the product options, select their preferred dealership and proceed to book their car online.

Honda Cars India Ltd. (HCIL) recently rolled out its ‘Honda from Home’ online booking platform which will soon integrate its pan-India dealerships. Rajesh Goel, Senior Vice President and Director, Sales and Marketing, HCIL said, “It offers a simplified and secure booking experience for the ever-evolving digital consumer who makes his purchase decisions online. This platform is part of Honda’s digitalization efforts in car retail experience that not only drives convenience but also efficiency.” 

Likewise, Volkswagen is digitizing its sales and service portfolio enabling customers with the flexibility to choose their preferred models at their comfort and convenience. Steffen Knapp, Director, Volkswagen Passenger Cars India said, “With the launch of our simple, secure and user-friendly online retail platform, we are pushing the boundaries of end-to-end retail sales and strengthening our commitment to customers.”

Puneet Gupta from IHS maintains that the world is changing and for the last four to five years consumer was looking forward to an online experience but now COVID-19 is acting as a catalyst to push online business. 

He affirmed, “Online process gives an end-to-end contactless experience and is hassle-free. Out of 24 touchpoints when customers get in touch with dealerships, we were already seeing 17 touchpoints were already contactless. Going forward almost everything, from a consumer showing interest, to a conversation with the sales consultant up till the vehicle handover process, will be conducted virtually.”

While premium carmakers are exploring unchartered territories, luxury carmakers are also going the extra mile when its physical stores are closed. India’s largest luxury carmaker Mercedes-Benz rolled out a campaign called ‘Merc from Home’ wherein the focus will be on the ease of purchasing a vehicle using digital tools to facilitate the entire process including online payment of products and services. Similarly, BMW India has enabled a unique contactless experience for its customers in India to explore and buy new and pre-owned BMW cars, book vehicle service, make payments securely online and more. 

"Digital" will be a viable, effective, efficient and sustainable new medium of selling. Some brands like Hero and Hyundai have tried it earlier and with some success. If people can buy smartphones worth Rs. 50,000 and above on the net, why not vehicles? To me it seems very logical - if the customer operates in a digital space, without physical boundaries, why should vehicles be sold differently? The test drive and the physical delivery process will remain while all else can be digitised and transacted through devices on the cloud. The salesperson will definitely remain in an evolved role, but the showroom will go!” maintains Avik Chattopadhyay, co-founder at brand consulting firm Expereal.