The economic downturn the auto industry has faced beginning in early March was more devastating for those dealers who were not able to quickly and easily shift sales processes online if they didn’t have digital retailing channels already. Now as restrictions lift slowly across the country, we are waking up to a new digital era that could turn out to be more positive for the auto industry than previously anticipated.
Many industries have turned to digital retailing to keep revenue flowing as technophobia fades among businesses and consumers alike. Automotive remarketing needs to embrace digital solutions. Used car demand hasn’t evaporated into thin air for the past 3 months. that business has still existed in the digital landscape, the same place dealers find new and used car shoppers.
Supply chains in the auto industry are slowly returning to normal but restrictions on public gatherings have kept automotive auction business stuck in a standstill. Classic car events which usually draw large lucrative crowds have been canceled and have been reinvented into live video events. COVID-19 has almost rendered physical car auctions nonexistent for a portion of dealers in the short- to medium-term according to Cox Automotive’ s latest dealer sentiment survey. That is, unless we are able to find ways to shift more of the auto industry into the digital realm ASAP.
In questions focused on stock acquisition, some dealers said that they planned to either decrease or stop attending altogether. Two-fifths of the dealers surveyed told Cox that they have increased their use of digital solutions due to the lockdown, with 49% of those indicating this will be a long-term change with 7% insisting on avoiding buying digitally.
The majority of dealers are catching on to the inherent efficiency and convenience of digital channels and don’t see why they should go back to spending thousands of dollars and countless hours dragging inventory to and from auctions.
Customer and dealer to dealer trade-ins are an important part of the auto business and, luckily, there has been no need to stop as it is very easy to gather vehicle information from a customer and post vehicles online almost as soon as they are evaluated thanks to digital technology. Dealers can make confident bids on purchases with online tools and services because vehicle information can be laser accurate with the right photos and vehicle data.
Automotive dealerships will begin to adopt digital retailing channels quickly in order to be better prepared in the future. Socially distanced shopping will be a new normal for consumers. Dealerships have the option of turning to digital solutions surrounding vehicle sales and expect to see the more positive results. There are open opportunities for growth in digital trade-in appraisals, F & I, wholesale and dealer-to-dealer trades as the entire auto industry can see the long-term benefits of fully utilizing digital solutions in all operations as we all move forward into the ‘new normal’.