Online Vehicle Sales Increase in Mexico

Amid lockdowns, most automotive dealerships in the country remain closed. According to El Financiero, out of the 76,931 new vehicles sold in the country between April and May, 15 percent were purchased through digital sales. This sales channel doubled its market share when compared to the same period in 2019. 

"The use of digital channels for the sale of vehicles will deepen. In these days of social isolation to face the health contingency, many people have changed their consumption habits and this includes using the internet to interact with vehicle dealers. This trend requires a radical change in attitude to serve the customer, generating empathy in the care process, even in distance care," wrote Guillermo Prieto, AMDA's President in an article for Mexico Business News. 

You can read Guillermo Prieto's Expert Opinion here.

Not every brand in the country had enable digital sales channels. El Financiero reports that while all Toyota sales in May were online, Peugeot just launched its online platform. Last year, digital sales represented between 5 and 7 percent of the total sales volume, but the pandemic has increased that figure between 10 to 15 percent. 

There are powerful allies in the digital world. Mercado Libre, the Argentinian e-commerce unicorn, has continuously grown its platform with automotive-related companies. "A couple of years ago, Mercado Libre bought Autoplaza and now we are the biggest motor vehicle platform in Mexico. Mercado Libre also has the biggest online market for auto parts and general equipment for mechanical shops. This is a complete ecosystem for automotive players, which is why many companies are looking at our services," said David Geisen, Country Manager of Mercado Libre to MBN. Iliana Vetrano, Motor Division Director of Mercado Libre told El Financiero that major dealerships expected digital sales to increase up to 20 percent. 

You can read the full interview with David Geisen here.

The aftermarket has also seen enormous opportunities in e-commerce. "Crises are major opportunity generators. It is best to think about a solution. A major trend emerging from COVID-19 is that consumers and companies have realized that e-commerce is the most important trend in the market today. Disregarding e-commerce will mean bankruptcy for companies," says Antonio López, President of ARIDRA. Director General of ZF Services, Gerardo Varela agrees. "The crisis generated by COVID-19 has given us the opportunity to grow in this segment (the aftermarket) – sales through e-commerce increased 74 percent in April and May." he says. 

You can read the full interview with Antonio López here.

Digital sales channels for used vehicles are an opportunity that entrepreneurs are betting on. KAVAK, is a Mexican start-up with four years in the online used vehicles market segment. "KAVAK has been in the market for four years and, during this time, we have become the country’s No. 1 platform for selling and purchasing used vehicles. More importantly, given the current circumstances, we are the only alternative that allows people to sell or purchase their vehicle without leaving their home," says KAVAK's CEO Carlos García. 

You can read the full interview with Carlos García here.