Is there still hope for a V-shaped recovery in the US and UK auto industry or are we past that recovery scenario? How strong will that recovery be? Will there be a second wave of COVID-19 and, if so, what will the impact be? A “V-shaped” recovery, in which a significant downturn in economic activity is quickly followed and matched by a dramatic upswing, has been debated throughout the summer in the UK auto industry and hoped for in the US.
There are signs of an underlying recovery in the vehicle market in the UK even as sales in August were down from the same period last year. With the end of the summer being a relatively quiet time for new car markets in general, market watchers are looking at the final September activity as a better indicator of recovery. In the US, auto sales is one place in the country’s economy that may still experience a V-shaped recovery. Vehicle sales in August were up 3.9% month-on-month even though sales remain lower than they were earlier in the year prior to the pandemic and down from the same period last year.
No doubt, signs of a persistent economic recovery and return to pre-pandemic consumer confidence will continue to be watched closely. One trend that is emerging and gaining traction among car dealerships and manufacturers is the ability to engage with car buyers online. anytime and bring the in-showroom experience to them anywhere.
Consumer buying behavior and some other positive trends
Since early May, reports of consumers feeling safer in a private vehicle and expectations that pent-up demand in both the US and UK will mimic the surge in sales that other markets such as China have experienced as they reopen have been widespread. As Motortrend observes these trends, it asks ‘So, are we ready for a huge sales rebound?’ With a COVID-19 vaccine still months away, some favorable trends for the automobile industry suggest a solid recovery with innovative dealers that meet consumer demands and buying experience coming out as winners.
Used car sales are increasing. As The Guardian reports, in the UK, many people in larger cities with public transit are deciding to forego the subway and buses to avoid exposure to COVID-19 by buying a used car. As a result, UK dealerships are experiencing growth in used auto sales. In the United States, used vehicle sales have been booming after decreasing by 38% in April 2020, as the Wall Street Journal reports. Very low interest rates, low new-vehicle inventory, coupled with a need to avoid public transit, are behind this trend in car sales in the US. Due to increased demand for used cars in the United States, USA Today reports that used car prices are soaring, with an average listing price of $21,558 in July 2020, up $708 from the previous month – a boon for used car dealers.
Online car sales are growing. Much car shopping and research now happens when a car dealership is closed – in the evening, between 6 to 10 pm. In pre-pandemic 2020, the average number of dealership visits was only 1.6 per purchase down from more than seven only five years ago. With 89 percent of consumers beginning their car buying journey online buyers prefer to browse online on their own terms.
Young people are buying more cars. This trend existed before the pandemic and is still continuing. Millennials, those born between 1981 and 1996, represented much of the car sales growth in North America in the first quarter of 2018. Millennials as a group are much more likely to refer to the internet, particularly video content, and their personal networks to buy cars, according to. They invest heavily in researching options resulting in feeling ‘very knowledgeable’ before and after their auto purchase. This group prefers browsing for cars online rather than physically visiting a car dealership, as reflected by the more general trend in car sales.
What do these trends mean for UK and US car dealerships? Dealerships should be prepared for the recovery with a digital strategy that engages their website visitors across channels anywhere, anytime, on any device. Because more and more people are both staying home and browsing for cars online, dealerships must replicate the in-showroom experience online now and be prepared for the longer-term trend of the online showroom.
Vee24 technology can help in a “Vee-shaped” recovery
Whether it’s to drive qualified leads, energize sales, or provide convenient customer service, a digital-first strategy that engages consumers online while they are researching and shopping or provides quick assistance and easy service scheduling will help car dealerships convert website visitors to test drives, sell more cars, satisfy customers and remain competitive. For dealerships seeking to adapt and accelerate their online strategy in the current economic environment and beyond, Vee24’s live engagement platform helps them create that convenient, personalized experience.
With automotive live chat – including high definition video chat – a salesperson can provide a detailed audio-video demonstration of a new car with a 360-degree, 5-point walkthrough seamlessly moving from the laptop camera to the mobile camera to wall-mounted. This live engagement experience transforms the online car shopping experience by bringing the vehicles to the customer without them having to leave home. Combined with other technology such as intelligent chatbots that provide customer assistance 24/7 to co-browsing and co-form fill that allow digital hand-holding through the financing application process, the Vee24 platform transforms a dealer’s website into its largest showroom.
Learn more about how Vee24 can help your dealership in a Vee-shaped economic recovery or get a glimpse of Hyundai’s Digital Showroom.