New research released today by NTT DATA, a leading IT services and consultancy provider for the automotive industry, has uncovered a renewed drive towards online buying behaviours among the UK public as a result of the coronavirus pandemic. Over a quarter of people are looking to ditch the visits and in-person interactions with car dealerships by communicating with them online only, while almost 1 in 6 people say they’ll buy their car online without having to visit the seller during the buying process.
Many people have shifted to remote working over the last year as COVID-19 has forced businesses to prioritise the safety of their workers, which has reduced the need to commute and resulted in reduced demand for new vehicles. The latest figures from the Society of Motor Manufacturers and Traders (SMMT) indicate that 2020 saw the fewest new car registrations since 2004, with registrations down 29.4 per cent year-on-year. Similarly, used car sales have been heavily impacted by the pandemic too, with transactions down 17.5 per cent year-on-year through to the end of Q3 2020, according to SMMT.
As a result, dealerships have been hit hard and now need to adapt to consumer demands as they are starting to change the way they are purchasing cars. The research by NTT DATA found that 15 per cent of consumers will look to purchase their next car completely online, without visiting a dealership showroom, which marks a 500 per cent increase compared to those who had previously bought exclusively online. In-person and human interactions are also set to continue to decline, with 28 per cent of respondents stating that they’d like to communicate with the seller online, using a website or email.
Car dealers will need to act quickly to respond to these expectations, as according to the research, 22 per cent of consumers intending to purchase their next car online have plans to do so within the next year. In addition, 61 per cent stated that they were planning to buy within the next two years.
NTT DATA’s research, conducted with 2,000 UK consumers, also asked about what type of car they had most recently bought, as well as the type of car they planned to buy next, which showed a strong trend towards electric vehicles and away from petrol and diesel. Of the respondents surveyed, only 4 per cent of people currently own an electric or hybrid electric vehicle, with the vast majority opting for petrol or diesel cars. However, 39 per cent of respondents plan to shift away from petrol or diesel, to an electric or hybrid car with their next purchase.
Nick Smith, Head of Manufacturing, Automotive and Services at NTT DATA UK, commented: “It is clear that consumers have a real, and growing, appetite for sustainability and that is increasingly influencing all aspects of their life. Choosing an electric or hybrid car is another step in the pursuit of leading a more sustainable and eco-friendly lifestyle.
“It is important for dealerships to note that customer buying behaviours are shifting towards digital platforms too, with almost 1 in 6 consumers planning to purchase their next car using online platforms only. As the majority of digital buyers have plans to do so within the next two years, the onus is on car dealers to ensure their online platforms and communications are up to scratch to ensure the best customer experience possible. Having a strong digital presence has never been more important, and is vital if dealerships are going to thrive in the post-pandemic recovery.”