Online car shopping is getting big in SA
New vehicle sales are slowing due to the depreciation of the Rand, despite attempts to combat the downward curve with competitive pricing.
However, this does sound like good news for websites such as Gumtree and second-hand car dealers. The fallout of the phenomenon can clearly be seen in the increase of second hand vehicles, says Jeff Osborne, Head of Gumtree Automotive and former CEO of the Retail Motor Industry (RMI). “The quality and variety of second hand cars that has become available on the marketplace is improving dramatically,” says Osborne. “This means that consumers can buy their dream cars for considerably less, and they do!”
“I believe we are going to see two things happen as a result of this development,” says Osborne. “Obviously, consumers are more likely to opt for second hand vehicles when making a purchase decision, but on the other hand, we’ll also see a shift in dealerships’ strategies. I expect we’ll see an even greater uptake in terms of online tools for lead management and generation as dealerships become more competitive.”
How can car dealerships benefit? Osborne believes that dealerships need to become more tech savvy overall in order to compete. Osborne says that car dealerships will benefit by placing both their new and used vehicles online, especially if they deploy professional tools to manage their inventory. “The perception might be that only second hand cars (or cheap cars) are available on online classifieds and similar portals, but the reality is that there is a healthy mix of new and used vehicles, across all brands. If positioned correctly, you can not only generate great leads but convert users that were considering a second hand vehicle to look at a new alternative.”
According to Osborne, traditional car trade platforms have (thus far) failed the car industry. “Consumers are becoming more tech savvy – they aren’t popping into their local dealership to browse as a first point of call anymore. They are doing in depth online research, reading up on social media and comparing prices. As a dealership you have to keep abreast of this trend. You have to understand how this plays into the buying decision and you have to cater to that.”