More Cars Are Being Sold Online During Covid-19 Outbreak

With the Covid-19 virus still rampant across the world, the automotive market is experiencing a serious slump. This is especially true in China, where the virus is said to have originated from. According to the China Passenger Car Association (CPCA), the retail sales of passenger cars in China crumbled by up to 92% on an annual basis within just the first 16 days of February alone! These numbers demonstrate just how hard the epidemic is hitting the world's biggest auto market.

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"Very few dealerships opened in the first weeks of February, and they have had very little customer traffic," the CPCA said.

China's auto market is likely to see sales slide more than 10% in the first half of the year due to the coronavirus epidemic, and around 5% for the whole year, provided the epidemic is effectively contained before April, the country's top auto industry body, the China Association of Automobile Manufacturers (CAAM), told Reuters last week.

To combat this slump, China’s biggest privately-owned automaker Geely has launched a service for customers to buy cars online and get them delivered directly to their homes, joining the likes of other carmakers like Tesla, BMW and Mercedes-Benz, who have also started to promote their products heavily online in recent weeks.

Image from: BBC

Customers can order and customize their cars on Geely’s website, and it will also offer test drives where the car will be driven directly to their address, without potential customers needing to visit the showroom. Geely calls it a fully "contactless" vehicle purchasing service.

Image from: Reuters

“Promoting online sales will allow automakers to directly reach customers through sales and marketing and help them build experience should they want to continue to do so in future,” said Victor Yang, a senior official at Geely. 

On the other hand, in a bid to drum up sales as the coronavirus outbreak prompts buyers to stay away from showrooms, Mercedes-Benz is also working closely with its Chinese partner dealers to support its online sales channels. 

"In face of the current situation, we have extended our online offer and observe a positive response from our customers," a spokesman for the German carmaker said.

It is estimated that almost 825,000 new vehicles were sold in 2019, either through online financing or by making a part payment online, according to consulting firm Frost & Sullivan. They estimate that almost 6 million vehicles will be sold through online platforms by 2025, and that the current virus outbreak is providing an “impetus to digital retailing for cars". 

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"As witnessed in China, the postponement of purchase decisions is encouraging vehicle manufacturers to redirect resources towards online marketing and e-commerce platforms," said Sarwant Singh, managing partner at Frost & Sullivan.

To stabilize the market, where more than 25 million vehicles were sold last year, China's commerce ministry said it will introduce more measures to boost auto consumption.

Let’s continue to hope for the best for the automotive industry during these trying times. What do you think? Leave a comment below!