News Article

Car Sales: Digital vs Physical Access to Market

Thu, 09/22/2016 - 11:36

The presence of 65 million internauts in Mexico has shifted the way we buy cars. “The traditional commercial process will never be the same,” said Juan Manuel Díaz de León, Automotive Practice Director of Overlap Consulting Mexico, at Mexico Automotive Summit 2016. “We no longer hand out leaflets to inform people about automotive products.” Customers have leveled-up in knowledge, sometimes even exceeding dealership staff in technical prowess and arrive at agencies with a list of comparative models in mind.

Mexico’s automotive sales have grown 18.5 percent in January-August 2016 compared to 2015 and during their panel Carlos Alberto Lopez de Nava, Director General of Grupo Alden; George Magda, Director of Latin America at Dealer.com; Ricardo Deeke, Country Manager of Autocosmos; Gerardo San Román, Head of Latin America of JATO Dynamics and moderator Díaz compared digital and physical access to the market and the effect on how companies reach customers.

Consumers can have more information than the sales rep and digital market access has meant sales representatives do not necessarily have to respond immediately to clients, said San Román.

“Response times used to be 15 minutes according to the traditional sales process. It can take weeks now,” said Gerardo San Román, Head of Latin America of JATO Dynamics. 

Companies must refocus on product distinction and financing to make the buying process much more amicable. Demand for service at dealerships is higher than manufacturing can meet, according to Lopez. Should the fleet of cars ready for sale increase, dealers could respond to customers much faster on online platforms. “A dealership in Mexico City can see 700-800 orders per month,” Lopez said. Eighty-five percent of deals are down to a dealership’s location, he added.

Undeniably, the digital revolution has filtered through to the sales process, which has to be much more personable at the distributor’s location. Should clients want distant contact they can shop online, said Deeke. Sales people must offer something extra: precise information and a warm welcome. Autocosmos is focusing on micro-moments. Complete availability of an assessor online, being quick and useful when handing over information is the only way to secure digital sales successfully, Deeke said.

Sometimes sales assessors understand the technical details of one brand but not of competing brands, said Díaz, a sentiment San Roman reiterated. “This prevents dealerships from being able to offer quality sales services in person,” he said.

The issue is not just service. Inventories need to be online, Magda said, so customers no longer have to ask whether their preferred car is available.

“The US already went through this 19 years ago. Mexico needs to catch up so that people begin to ask ‘what time will the car be ready for me?’” – George Magda, Director of Latin America at Dealer.com

Autocosmos mainly compares new cars but San Román of Jato said that simple comparison no longer is enough. Customers want an emotionally and financially positive experience. “We have to give them total visibility and transparency to create trust,” he said.

The emergence of the digital market also has forced sales reps to evolve and offer a wholly different buying experience. The overbearing issue facing car manufacturers is that distributors manage smaller and smaller inventories. Toyota is the best example of doing this well, however, with 45 days of inventory. Lopez agreed this is the hardest thing for dealerships to overcome.

Buying cars with one click has led digital technology companies such as Google to take starring roles in car manufacturing. Maserati sold 100 of its latest model in 18 seconds on the internet, Díaz pointed out. San Roman said that we needn’t fear cars disappearing. “People will continue needing to get from location to location,” he said. “We will undoubtedly see an overhaul of how cars are used and owned.”