Team-BHP - Is car shopping shifting online?

This is a really interesting thread and I think the answer is going to be YES but over a longer term. I just finished reading Elon Musk's biography and read in detail about how he went about building and marketing Tesla. The big reason why they can go directly to consumers is that the car has such few moving parts when compared to a traditional car with an internal combustion engine. Most of the performance upgrades and downloaded directly into the cars and after sales service is not something that is of concern to most buyers since they don't have to experience it.

Most car manufacturers will be forced to go down this road soon given government and public pressure to embrace clean energy. That would hopefully give them a chance to reconstruct the car with far fewer parts like Tesla did and would change the game. A few marquee showrooms would become experience centers, and most test drives could be booked online. 360 videos of cars and VR experiences will give you a rich experience of cars from within your drawing room.

However, that future is distant in India given the infrastructure issues that are present here. Given that you are 18 and have a love for cars, start a kick-ass after sales service where customers can trust you, and you will succeed.
Keep an eye out for the future and learn about some of the advancements in the field and you could become a strategic contributor to help companies bridge the gap between planning electric cars and delivering them at scale to India customers.

Quote:

Manufacturers know manufacturing the best, not retail selling.

Sir, I beg to differ here. I am an automobile sales expert, having just returned from Oman after spending 11 years there. I rose the rugs and my last assignment was as Divisional Manager (Retail). My seniors (in sales) were from the the manufacturers in India. Be it Maruti, Tata, Hindustan Motors. As a matter of fact, our CEO was the VP (Export) of Tata motors. In the Oman market, all of us had to interact with customers, since we were working for the National Sales Agency (dealership) of a manufacturer. Since, my background was always at dealerships at India, before I moved to Oman, my career growth was overshadowed by people coming from Indian manufacturers - those who were working as dealer development / dealer interaction / meeting the dealer sales staff.

Additionally, I know many of my senior colleagues who after having worked in Oman for 6 to 7 years (mind you - their assignment was as branch coordinators, having to interact with customers, though they tried to avoid as much as they could), have repatriated to India to join the manufacturers again.

I have seen a couple of very senior M&M staff being recruited at our company, who just could not prove their worth and indirectly shunted out.

Yes, I do agree to the fact, manufacturer staff do not want to interact with customers as they have kept their dealers as their face of business. I remember many an instances, wherein the manufacturer dealer development manager was at our showroom, at the same time we have a customer who has a concern and is requesting for solutions, the DD manager has outright refused to meet him. It is as if "Once a vehicle is sold, the problematic customer is the dealer's 'crying baby'

For electronics, everything (including financing through EMIs) can be done online without paperwork; I am assuming replicating this for cars wouldn't be difficult.

I have shifted to buying stuff online purely because of the fact that they allow a 10-day return window for any product that might be a lemon. Just last month I exchanged a fairly-expensive headphones within the return window. :)

If online sales allow such return windows on "lemon" cars/bikes, I will surely order my next car/bike online.

Also, just to prove that online sales are possible, I would like to reiterate that I booked (and later bought) my Honda Navi last year, just by looking at the online pics and reviews, and never visited the store until the delivery day. And lest you think this is because it was a sub 50K bike, here's another BHPian who bought his Rs 10 Lac Ninja 1000 without looking, touching or test-driving the bike either.:Shockked:
Both of these purchase could well have been completely online!

Good topic there Vishy!
Few might disagree on how I visualize this but let me lay it out.

Though we intend to take a test drive before purchasing our ride, it may not be an essential part of purchase process in the future.

Test drives are predominantly done by first time buyers and buyers of newly launched models.

But if we look at the whole purchase process, test drives have become customary - whether we like it or not. The question is are all the test drive vehicles in top notch condition to get that 'feel of new car'? Look at the comments of our fellow members who have come back from test drives. That explains it all. This will certainly change the mindset of buyers.

Now leaving out the test drive part, rest everything could be digitized and made online.

Interested in a car?

1. Inquire
2. Request/receive quotes, brochures (probably 3D) and T & C
3. Confirm purchase and dealer acknowledgement
4. Provide periodical updates to customer on loan process, car status, RTO stage, etc.,
5. Take delivery of car

All goes online. Dealer(s) or manufacturers may organize stalls in common spots in city and offer free test drives irrespective of the fact whether you buy it or not and provide you with a limited coupon that can be used online at the time of booking for a discount or maybe some accessories, etc.,

When car shopping goes online I am sure that the operational methodologies, rules and regulations and T & C would also change to benefit the customer. This will promote online shopping.

Thinking how hard it would be for manufacturers to switch to e-commerce model. Setup large warehouses in major cities, take an online booking, deliver the car at a designated place. You can always outsource everything else including service.

Something like below:
1.Select the car model,variant and color.
2.Pay booking amount online.
3.Upon alloting a car, pay remainder of the amount.
4.Ship the car.
5.Take delivery from warehouse.

I know its not that easy as I haven't considered bank loan approval, PDI's that enthu's do, return policy if car is damaged etc. But I believe it's not something that is impossible to overcome.

Quote:

Originally Posted by abhishek46 (Post 4279829)

There are a lot of things "online" does not offer like:
1. Touch and feel of interiors
2. Sit and feel of the seats/cabin
3. Drive and feel of the Engine/NVH/Ride/Handling

In short, buying "online", robs you of a very emotional and connected feeling of choosing youy ride for the next decade/half.

If buying a car is the destination, then the process of choosing it, is the journey.

It need not be a purely online behavior. There are folks who cruise the local Lifestyle / Shoppers stop stores and then order them via Amazon.

From the booking to the buying experience, there are multiple steps in terms of a test drive or even signatures. At least for a foreseeable future, it won't be a fully automated process.

But think about the purchasing process itself. Remember the craze only a short while ago about PayTm / Freecharge and the lot giving back crazy cash-back. It could happen in the auto industry as well. Because the more we send in cheques / cash / non-digital currency, the more paperwork gets generated at the back end. A dealer / manufacturer could very well pass back a 2% discount back to you if you make the entire procedure paperless for them. The banks / insurance companies are already on a war-path on this. It's only time before this gets done online.

Very interesting thread. I would go out on a limb and say that the answer depends on the speed of electrification of transportation. According to Tesla which sells only electric cars, dealerships are not sustainable because service is their bread and butter and electric cars are expected to cause a big drop in service costs and hence their no dealership policy.

Due to some obnoxious laws in the USA, in many states the only way to order a Tesla is online

A completely online model is possible only if the manufacturer takes care of sales. If dealerships are involved it is not in their interest to support this system because it will make the whole process transparent and they will lose their pricing flexibility.

I feel that we make online purchases for uniform items that do not have a lot of customization possible. For example, even an expensive item like a TV can be bought online because it is fairly standardized and we know what to expect.

But for a car, I feel the scenario is totally different. We would be spending a few hours in it everyday and also use it for around 5-7 years on an average. Thus, as many other BHPians have said, we need to form an emotional connection and on a more practical note also get a feel of what features are necessary for us on a day to day basis and accordingly choose a suitable variant and this cannot be done online.

Hence, I feel that there will always be dealerships around at least for the next 2 to 3 decades, after which technology may catch up and developments like VR could provide you a test drive from the comfort of your home.stupid:

A lot of car enthusiasts have this exact same dream when they are young - getting into the car business because they like cars. And the intention is also the same - that of providing quality service that is non existent now.

Until reality strikes maybe 10 years down the line.

Here's a small part of reality:

1. Dealing with customers who don't understand cars and will make your life miserable because of a problem that is of their mishandling.

2. Dealing with customers who are frauds.

3. Dealing with customers who take excellent service as a given that doesn't need appreciation but will blow out of proportion the smallest failure.

4. A non cooperative manufacturer who doesn't provide spares, technical support or adequate product training to you and your employees.

5. Manufacturers who make cars that aren't suited for the Indian market and leave you to deal with the end result - read that as a lot of disgruntled customers that you have to give explanations on product / component failure without any knowledge of whether you will get the requisite support from the manufacturer etc.

6. Wafer thin margins on sales and service that have made a lot dealerships close down including that of Hyundai, Maruti, Skoda, VW etc (which incidentally is the reason they try and cheat unsuspecting customers - survival game).

7. Lack of skilled labour - add to this the fact those whom you painstakingly train would join your competitor making you live with mediocre skilled technicians that result in mediocre service to customers.

All of the above are only a SMALL part of the problems that you will face and if you are still excited to jump in (which you will be for now regardless of what you may read anywhere) the least of your worries is whether car shopping will go online. Even if it does, your stated objective is to "provide quality service" and service will NEVER get online.

My advice - avoid getting into car business like the plague. Just enjoy driving and looking after your car, keeping it in top shape and ensure you don't get cheated by your dealer during its service - that in itself will be quite a task as time goes on.

I think the poll should indicate the time in years to define "long term".

Like most of the comments above, i agree that researching, comparison, shortlisting can and already is happening online. But that's where i think the online track ends for car shopping (for mid term). Once the shortlisted cars are noted then, at least for the foreseeable future, i think the off-line/traditional outlets will come in.
Here the aspects like Test drive, look and feel, physical presence of the car will matter. To this aspects, i don't think a online replacement is doable.

That being said for a true long term (>20 years) maybe virtual reality coupled with 5D, 7D experiences will become mainstream, and can give a very very close match to the real driving experience.
This coupled with schemes like Aadhar with biometric identification (which is used to open accounts online, rent registrations, sim cards, etc even today) has the potential to move even the "post-buying" experience online.

PS: In absence of timeline in years to define long term coupled with inefficiencies normally associated with India i have voted "No".