Supply chain constraints and rising inflation have hurt car sales. Last year, UK new automobile sales hit a 30-year low.
While recovery is expected, Gartner projected in February that “2023 will be a deceptive year for automotive online sales” as automakers slow digital retail spending due to instability. Gartner also advises that automobile firms can use the economic crisis to improve their online capabilities, save costs, and gain market share.
What trends are changing the sector as shoppers increasingly shop online and offline?
Online-only sales growth slows post-pandemic, but digital acceptance grows.
Online-only car buyers have decreased in recent months. What Car? found that 4.2% of consumers plan to buy a car without a salesperson, down from 9.7% in June 2022.
Auto Trader COO Catherine Faiers saw this tendency, according to Car Dealer. “We did see significant growth during the pandemic,” Faiers told Car Dealer Live.
Faiers also noted that more clients are arriving at the forecourt after starting their journey online.
“Many of those consumers were highly informed and ready to buy, so they had spent a lot of time doing their research and narrowing down to a specific vehicle, understanding the finance options, and were fully ready to buy by the time they arrived on the forecourt.”
While most consumers still prefer to buy cars in person, data reveals a rising acceptance of digital and omnichannel automotive retail. This parallels customer behavior across retail, with ecommerce sales plateauing over the past year while high street retailers have grown.
Markets mixed, with auto parts increase.
Carvana and Cazoo benefited from the COVID-19 pandemic, which increased used car purchases. As consumer demand declines, many marketplaces must decrease costs to make a profit.
Due to consumer need for test drives and forecourt fulfillment, some pundits have questioned the long-term viability of the online-only automobile business. Pureplays’ high marketing spending and low used car margins offset the cost savings from not having brick-and-mortar facilities.
AIM’s “2022 Automotive Marketplaces Report” suggests that more automaker-owned marketplaces could challenge third-party internet markets like Auto Trader. AIM cites Stellantis’ SpotiCar, which runs in 11 countries, and General Motors’ CarBravo, a new site.
Auto parts ecommerce is growing as consumers want a hybrid online-offline car-buying experience. The worldwide automotive aftermarket is anticipated to reach $559.9 billion by 2030, with online automotive part revenue reaching $67 billion.