In the past, car dealerships have been slow to embrace e-commerce, yet now with the ongoing coronavirus crisis, retailers have registered spikes in online traffic, as showroom traffic began slowing to a halt.
We can expect U.S. new car sales to take a beating from this pandemic. Demand dropped 13% in the first 19 days of March, as per research firm J.D. Power. However, in markets such as Seattle, San Francisco, Los Angeles and Chicago, that number is closer to 22%.
According to Moody’s Analytics, new and used vehicle markets could register 20% drops compared to 2019 levels, and remain at this level well into 2021, reports Reuters.
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As if that wasn’t bad enough, analysts at Evercore ISI estimate that the March seasonally adjusted annual selling rate for the U.S. could be 11 to 12 million vehicles, on par with levels seen during the 2008/2009 financial crisis. Yet, online traffic for some 1,000 U.S. and Canadian retailers is up by about 6%.
“Many dealerships are going to get caught with their pants down,” said Brian Benstock, a NYC dealer. “This will be a watershed moment for the dealership industry.”
Dealerships have of course been doing business online for years, however, it was never a major focus for them – only 15% of all transactions are online. That being said, online sales are expected to double by 2025.
Read: GM Pushes Online Sales As Coronavirus Keeps Shoppers Out Of Showrooms
One carmaker that’s always been ahead of this curve is Tesla, frequently relying on internet orders for its models. The California-based brand is now implementing “touchless deliveries” in many locations, allowing consumers to unlock cars using an app, as well as to sign any relevant paperwork online.
