By Nora Naughton
Car dealer Earl Stewart had all but given up on his efforts to
sell cars online before the coronavirus pandemic. But after a
gloomy sales weekend at his Toyota store in North Palm Beach, Fla.,
where buyer traffic had plummeted because of the outbreak, he is
giving it another go.
"Maybe coronavirus concerns will bring us customers we would
have not otherwise seen," Mr. Stewart said.
With millions of Americans stuck at home, dealers and auto
makers are giving their online car-selling operations a push in an
effort to salvage some business as vehicle sales collapse and
customers forgo service work and repairs.
While the idea of buying a car online has largely failed to
catch on, some in the industry are hopeful this time buyers might
give it a try as large parts of the country shut down and people
adjust to conducting more business remotely.
AutoNation Inc. and Sonic Automotive Inc., two of the nation's
largest dealership chains, are pushing their online retailing
services, including sending sales associates to customers' homes --
where social-distancing regulations allow it -- and adding new
features to their websites that make completing more of the process
over the internet easier for customers.
General Motors Co. is expanding its "Shop-Click-Drive" online
shopping program to more dealerships. The service, which GM first
launched in 2013, allows customers to price a car, get a trade-in
estimate and apply for financing without coming into the store.
Some dealerships are also offering to pick up and drop off
customers' cars for repair work and routine maintenance, such as
oil changes and tire rotations, to try to keep their service
departments busy and prevent layoffs.
"This may be the iPhone moment of transitioning to a more
digital retail environment," said Tyson Jominy, auto analyst for
J.D. Power.
The auto industry has long hoped to replicate the success of
online retailing giants like Amazon.com Inc. Tesla Inc., which
allows shoppers to order vehicles directly from its website, has
proven there is demand for such transactions, though it still
operates stores.
However, most car buyers still prefer to do test drives and
complete financial transactions at the store, dealers and analysts
say. Most car sales are still executed at the dealership, analysts
say, though online sales are difficult to track because so much
research and initial shopping is done on the internet.
Some state laws also make it difficult for retailers to move
this complex purchase fully online, requiring that certain parts of
the process, such as signing the paperwork, be done in person. A
J.D. Power study found that customers are generally reluctant to
share personal financial data before entering the showroom.
Mr. Stewart said his "click-and-buy" sales program generated few
sales, despite offering home delivery and a money-back
guarantee.
Dealers and car companies say they have little choice now. Some
retailers have been forced to close their showrooms temporarily to
abide by stay-at-home orders. New-vehicle sales dropped 29% last
week from the same period last year, according to Cox Automotive,
and industry executives and forecasters say demand will continue to
fall next month and likely into the summer.
Sonic Automotive, which has 95 dealerships in 12 states, is
rushing to bolster its online operations and promote its no-contact
sales service, where buyers complete most of the transaction via
the web and a salesperson drops off the vehicle and paperwork at
the customers' home.
David Smith, Sonic's chief executive, said that with travel
limited, people still need reliable transportation for the trips
they must make, whether it is to the hospital or grocery store.
That is why the company is expanding its remote services. Still, he
is skeptical that buying habits will be altered permanently.
"What a far majority of our customers like to do is still see
the car in person, even if they start the process online," Mr.
Smith said.
AutoNation, the U.S.'s largest publicly traded dealership chain,
is speeding up the nationwide rollout of a new service, called
Store-to-Door, that combines online shopping and at-home delivery.
The auto retailing giant began testing the new service last
year.
GM says the number of customers shopping for new and used
Chevrolet vehicles via its "Shop-Click-Drive" website increased
nearly 30% with more than 5,000 site visits since March 16.
Fiat Chrysler Automobiles NV is working with its dealers to
build better online tools for getting financing approved over the
internet and to configure and order cars from home, a spokesman
said.
Auto makers and dealers in China also made a big push earlier
this year to sell cars online as the coronavirus outbreak spread in
the world's largest car market, causing vehicle sales to
crater.
Chinese auto maker Geely Automobiles Holding Ltd. said more than
10,000 customers have bought cars through its online store, which
launched in February. But February car sales in China fell 79% over
the prior-year period, according to the China Association of
Automobile Manufacturers, and are expected to tumble again this
month.
In the U.S., dealers say the outbreak has spurred more interest
in at-home delivery services, although it is too early to tell if
it will catch on more widely and give sales a meaningful lift.
Mike Bowsher, president of Carl Black Automotive, which operates
five dealerships in Tennessee, Florida and Georgia, said his stores
used to get one or two shoppers a day interested in online
transactions. Now, he is seeing nearly 10 daily, he said.
Lena Williams, a 43-year-old security dispatcher in Winter
Springs, Fla., was one of them. She rushed to buy a vehicle last
week as she watched airlines limit seating and figured she would
need reliable transportation for trips planned later this year.
She came across GM's Shop-Click-Drive program on Carl Black's
website and completed the transaction online, she said. A sales
manager then arranged to pick up her trade-in and deliver the used
2017 Chevy Colorado pickup truck she bought to her house. She
signed some paperwork in person, but the contact was limited.
"I feel safer doing it this way," Ms. Williams said.
--Ben Foldy contributed to this article.
(END) Dow Jones Newswires
March 26, 2020 09:40 ET (13:40 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Mar 2024 to Apr 2024
General Motors (NYSE:GM)
Historical Stock Chart
From Apr 2023 to Apr 2024