Dealers need to keep up with car-buying trends
With consumers now informing brands, they must adapt to customer needs or perish
A CAR represents a significant, emotional purchase for the average South African. For most of us, the car we drive is an extension of our personality, and a symbol of our status in society.
There’s no denying the fact that the internet has drastically changed the way we buy cars. The average South African customer spends around 10 hours browsing motor trading websites before setting foot inside a bricksand-mortar dealership. And when we do, we visit less than two dealerships before making a purchase.
On the back of this change in buying behaviour and with many companies grappling with high staff turnover and slumping profitability, there’s been a lot of postulating by doomsters that the local bricks-andmortar car dealership is on the brink of extinction. From my vantage point, however, we’re a long way off that yet.
While 80 percent of us in South Africa research the car we’re thinking of buying online, most of us still want to see and feel the car, and take it for a test drive, before signing on the dotted line.
In fact, nearly a third of South African customers consider dealerships and salespeople as crucial criteria to the car purchase process. Almost 60 percent of us say that we would use a traditional dealership over other channels to buy a car, even in 2025. And more than 80 percent of new car sales took place at a dealership in August 2018.
So although dealers may have fewer walk-ins than they did in the past, the ones that they do have are serious buyers. Once a customer is on that showroom floor, they’ve done all their research, and there is already an intention to buy.
From a servicing perspective, while cars are still powered by an internal combustion engine, dealerships are
here to stay. In fact, it was this engine, with its more than 10 000 moving parts requiring regular maintenance, which gave birth to the dealership model in the first place.
Dealerships took on the role of managing every stage of the car ownership life cycle, from sales through to service.
Dealerships of the future may have more service facilities, and less showroom space. From both a convenience and investment perspective, it makes sense. This will require a redesign of processes, to achieve good flow.
And I do foresee many more dealerships offering express service facilities, not unlike a Formula One pit-lane operation, where customers can be in and out within an hour. You will see more comfortable lounge spaces in dealerships, offering complimentary wi-fi and coffee and snacks.
Dealerships of the future will become more mobile. You will see more pop-up shops and dealerships exhibiting their cars in shopping malls, to leverage the high footfall these retail spaces enjoy.
Dealerships of the future will continue harvesting big data, to analyse information which can highlight trends and provide insights, to craft
services or products tailored to a customer’s unique wants and needs.
There is increasing digitisation across the value chain, and dealerships of the future will utilise technologies and tools, like apps, to provide even more convenience for customers.
For example, in China earlier this year, Alibaba and Ford Motor Company launched the world’s first multi-storey car vending machine to facilitate self-service three-day test drives. Via an app, customers provide identification details, pay a deposit and a service fee, and then access their chosen car in the garage.
In the always-on culture of today’s world, dealerships of the future will become more agile in the online space. A dedicated employee will be tasked with flagging the urgency of queries or complaints received via email or social media.
Interestingly, more than 80 percent of dealerships in South Africa do not plan to expand their online presence by 2020. I think that any company that ignores or neglects this part of their business is very short-sighted.
Social media has changed the balance of power between consumers and brands. Consumers are not shy to make their voices heard. Complaints or
compliments are aired with confidence and authority. And customers expect an immediate response. They want to be acknowledged and heard. They want their pain points to be addressed efficiently and resolved effectively. If a company only responds two days later, the customer forms an opinion about the brand – the automaker or the dealership – based on that interaction.
Remember, the average customer doesn’t differentiate between automaker and dealership – they are perceived to be one and the same – so automakers and dealerships would be wise to use an integrated and collaborative approach.
The bottom line is that consumers now inform brands, and dictate how companies do business. Those dealerships that keep pace with change, that adapt to and accommodate their customers’ needs, and rise to meet and exceed their expectations, will remain the linchpin of the auto distribution chain and customer interaction. Those dealerships that are slow on the uptake, or that remain stubbornly entrenched in the outdated traditional dealership model, will become obsolete.
Neale Hill is managing director of Ford South Africa and Sub-Saharan Africa.