Motor dealership showrooms may downsize in the future, but the need for customers to interact with a person in the final stages of buying a vehicle means the dealership will still have a crucial role to play.
The National Automobile Dealers Association chairperson Mark Dommisse this week said customers were, however, likely to do substantial research before buying a vehicle.
“We are already changing the way we do business,” Dommisse said. “Buyers today have a choice of 49 vehicle brands in South Africa and they don’t want to make the wrong decision, so they are still likely to discuss the pros and cons of the vehicle and the deal offered with a sales executive.”
Dommisse said motor vehicle dealers in South Africa had heightened efforts to further improve customer relationship management.
He said dealerships, especially those in rural areas, also played a big role in the life of their communities, which remained important even in these changing times.
AutoTrade chief executive George Mienie said their company saw vastly different search patterns for cars taking place during the various stages of lockdown.
Mienie said customers had changed their search patterns.
“Night owls were busy in the late hours and at one stage we were getting more people searching at midnight than at 9 o’clock the next morning. The number of people searching for cars during lockdown was 50 percent higher than pre-Covid-19,” he said.
“In addition, the main vehicles being searched for during the lockdown were Volkswagen Polos and Vivos, while in November it switched to the Toyota Hilux bakkie,” he said.
Absa vehicle and asset finance head Faizal Mkhize said although more consumers were using websites as sources of research, they still went to the finance and insurance representatives at a dealership to finalise their deals.
Mkhize said many went through the pre-approval process, but used this mainly as a tool to assess their credit rating and to see how much they could spend on a new vehicle.
“We still get about 80 percent of our business through our business flow from the dealers’ floors, but realise that we need to make the paperwork necessary for obtaining a loan or lease as easy and simple to complete as possible, while the finance and insurance representatives play an important role in ensuring financial compliance with the purchasing and financing processes,” he said.
Dommisse said as sales were falling and fewer vehicles were serviced at dealers, dealerships needed to consider other revenue streams, such as selling tyres, and providing quick service for clutch and shock absorber replacements, as well as brake system servicing, to compete with external service providers cash flow.
“Dealers must think less about survival and rather concentrate on planning for the future,” said Dommisse.
Mienie said the current high demand for good used cars was not sustainable in the light of the low rate of new vehicle sales.
“Dealers are complaining about a lack of good, sellable stock,” he said.
He said the number of searches in the 26 days before lockdown fell by almost half, which he says was probably due to people going out to panic-buy a new or used cars and no longer surfing the web. The number of searches increased once the first, hard lockdown was enforced.
He said an interesting trend was a 10-fold increase in searches for armoured vehicles.