Are virtual dealerships the next big thing for automobile makers?

Consumer preferences have demonstrated a shift towards the web when it comes to automobile dealerships in India. This is being touted as a natural result of customers’ propensity to ferret out deals online.


Several regular dealers are witnessing a decline in footfalls at their showrooms. Even roadside promotional stalls and camps are not doing much to spur the same. According to a Bengaluru based dealer, most dealerships initially steered clear of generating online leads. However, automobile dealers are now realizing that most customers are going online with a vengeance and hence this shift towards virtual dealerships. Several dealers are even refurbishing their websites and adding multiple interactive features to lure more customers.


In usual cases, dealerships would need to advertise various deals, send out emails to prospective customers or earlier customers and also embark on cold calling. Upon receiving an enquiry, a test drive has to be organized. Post financing, insurance and price negotiations and dealings, a deal is then closed. On an average, a sales person cannot really sell more than 2-3 vehicles on a monthly basis owing to the time intensive nature of the process according to industry experts. The cost of customer acquisition had also gone up rapidly owing to such a scenario.


Online presence of dealerships helps lower customer acquisition costs and spread the network without any locality wise presence or physical promotional. According to Bhavin Panchal, vice president of sales at Mumbai dealer G3 Motors feels that car sales will now be spurred by rural areas since metros are already saturated. In Mumbai for instance, Navi Mumbai interiors and places like Raigad are contributing to increasing sales volumes. These are areas where though the dealership cannot be physically present, it can definitely interact online. According to many experts, customers will always seek out the best discounts and other deals. As a result, virtual dealerships may well be the new space of the future for new cars.


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