Online tools spurned by drivers, survey reveals
More carmakers and dealers in China offer digital tools of one sort or another in their sales and aftersales processes, but a recent survey by J.D. Power finds there is a long way to go before the tools are fully utilized.
A total of 32,702 vehicle owners were surveyed in 70 major Chinese cities. They bought their vehicles between March 2016 and July 2019.
The findings, which were released last week, show that when digital tools are available, Chinese customers still tend to refer to dealership staff members, especially in terms of after-sales services.
For example, when they have their vehicles serviced, only 15 percent will check the status via WeChat or smartphone apps. Some 22 percent will learn the latest progress via digital screens inside the dealership, while more than 60 percent sit and wait for information from the dealership staff.
The situation is somewhat improved when it comes to making appointments with after-sales staff.
The survey shows that 29 percent of car owners do this via digital tools, but one-third of those who do would find their online appointments failed to reach the dealership.
Ann Xie, senior director of the digital retail consulting practice at J.D. Power China, said digitalization in after-sales service, dealers' efficiency and customer satisfaction have greatly improved, but they are not fully optimized or utilized.
"The lack of continuity in digitalization across entire service processes will negatively affect the customer experience and overall satisfaction," Xie said.
She agreed that it is no easy task to change the situation, but said it is vital for automakers and dealers to do so to provide smarter services and benefit customers.
"It is equally important to proactively send service notifications or reminders and cultivate customers' habits of using digital tools," Xie said.
Consulting firm McKinsey suggests that carmakers and dealers should speed up digitalization as automotive retail is changing, with the pandemic as a catalyst.
In a report released last week, the firm found that for those potential buyers in the United States who mainly use online channels, their purchase intent only dropped by two percentage points, compared with pre-COVID-19 levels.
By contrast, purchase intent for consumers who plan to buy in person dropped by more than eight percentage points.
Its survey of more than 3,000 car owners in China, Germany and the US found that about half of them would consider purchasing their next car online.
The key reasons are time savings, the hope for better prices through online price transparency and the convenience of online shopping.
McKinsey estimates that online sales will make up 10-25 percent of global automotive sales by 2025.
It said several companies have announced their internal targets: Peugeot aims to complete 100,000 online sales by 2021; Mercedes-Benz aspires to sell 25 percent of its new cars online by 2025. Meanwhile many others, including Hyundai, Volvo, Jaguar Land Rover, Mitsubishi and BMW, are operating online sales pilot programs.
"In light of COVID-19, OEMs (original equipment manufacturers) and their retail partners are at a crossroads and should use the rising momentum to accelerate their transition into the future of automotive retail," said an analyst with McKinsey.
