Automotive News Europe - July 2019 - 7

AUTOMOTIVE NEWS EUROPE

COVER STORY

and the test country for many automakers' online sales programs, 60 percent
of dealers say they will have the ability to
offer online transactions within the next
two years, according to a new study by
Cox Automotive. "It will be the normal
way of selling in 10 or 20 years, no question," said Marion David, product director at PSA's DS Automobiles brand.
Car buyers are already online. Ford research in Europe shows that its customers visit a dealership just 1.2 times during
the purchase process, with much of the
decision-making informed by research
done on the internet. Automakers have
long facilitated that by developing increasingly sophisticated online configurators, where customers can create a virtual version of their ideal car, while seeing
how each change will affect the price.

Photo: iStock

But that's where it stops. Or in VW parlance,
where the link is broken. "In the future, we
will try to avoid these break points," said
Jürgen Stackmann, head of sales, marketing and aftersales for the Volkswagen
brand. Right now a customer's online
journey is largely invisible to VW. Car buyers don't emerge until they send a link
containing the details of their configured
car to their nearest dealer. The new system proposed by VW gives the customer
an ID number to make themselves known
to the entire VW dealer network and VW
itself. Not only will that enable online purchasing, but it means any interaction the
customer has, be it servicing reminders or
an email complaint to the dealer, will be
recorded onto that customer ID. "This way
everyone who needs to know, knows who
he is and what he needs. It has a total ecosystem advantage," Stackmann said.

Dealers' advantage
It might be VW creating it, but it will be
to the dealers' advantage. "The dealers
realize the future of customer connection is within our system, not within each
dealer. They can't create a journey for
a customer on their own," Stackmann
said. The dealer, however, remains a key
element. The move to embrace online
sales is not the same as a move to direct
sales, automakers were keen to point
out. "They are the face of the brand to
the customer. They help when things go
wrong. We can't pretend everything we
do is perfect," Stackmann said.
The online sales model that automakers
are largely adopting calls for the internet

JULY 2019

most like a contract for a mobile phone,"
Harrison said. Private leasing in Norway
has grown alongside its unique electric car
market, perhaps in response to nervousness about residual values. "It's possible
there is some shift away from ownership
because of that," Harrison said. Having a
younger customer base also helped.

We have to offer customers
another way in.
-- Roelant de Waard,
Ford of Europe General Manager of
Passenger Vehicles

order to be fulfilled by the dealer chosen
by the customer, most likely the store
that is nearest. "You don't want to just
drop off a vehicle and say goodbye,"
Ford's de Waard said.
Matthew Harrison, head of sales and
marketing for Toyota Europe, agrees.
"The purchase is just the first part of the
journey," he said. "It's important we look
after them through the ownership of what
are increasingly high-tech cars. Our retail
partners are central to that relationship."
Toyota has a pilot online sales program in
the UK and Norway ahead of opening online sales "across a number of markets"
within the next few years. But right now
they are still gathering information. "We
have learned it's not as straightforward
as putting a payment form underneath
your website," Harrison said.

Interesting findings
In Norway Toyota's online operation has
focused on the Aygo minicar specifically
and has generated some interesting findings. The first was that Toyota gained a
lot of conquest sales from other brands.
Secondly, the automaker learned that
offering finance in the form of leasing
was the key to success. "There has been
a very high mix of customers who want
to take the full private leasing package.
Finance, insurance and car in one. It's al-

The willingness of customers in the UK to
buy cars on finance is a big reason why automakers have chosen the country to trial
online sales. In the 12 months to the end of
March this year, 91 percent of cars bought
privately were done using finance, according to figures from the UK's Finance and
Leasing Association. "The 'how much does
it cost per month' mentality reduces the
barrier to an online purchase compared
with a capital purchase of 20,000 euros or
more," said Steve Young, managing director of ICDP, an analyst firm specializing in
automotive dealerships.
Volvo launched its online sales platform
in the UK in April, describing Volvo Online
as more comprehensive than similar services in the UK run by Peugeot, Hyundai,
BMW and Mitsubishi. A tick-sheet of online
features Volvo offers includes the ability
to have your current car valued prior to
trade-in, three different types of finance
(including personal leasing, hire purchase
and, the UK's current favorite, personal
contract purchase, where a chunk of the
car's price is held back to the end of the
contract to reduce the monthly payments)
and an online credit verification process
that is concluded by using an e-signature.
Volvo Online requires buyers to pick a
dealer first and then accept that dealer's
offer on finance packages. Unlike standard configurators, buyers can see how
the additional options or engine upgrades
will affect their monthly figure, not just
the overall price. Volvo said the system
doesn't just embrace dealers, it benefits
them. John O'Hanlon, CEO of Waylands
Automotive, which runs a small network of
Volvo dealerships in the UK, agreed. "We
don't care where that lead comes from,"
he said. "If you had asked me how I felt
about a manufacturer setting up an online channel 12 to 24 months ago, I would
have been more concerned," he said.

Not an aggregator
But Volvo warned customers that its
online sales site wouldn't necessarily
show the cheapest car available, partly
because customers couldn't search the

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Automotive News Europe - July 2019

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