Error 404: online car sales not found | CAR Magazine

Error 404: online car sales not found

Published: 27 December 2023 Updated: 27 December 2023

► The state of online car sales in Europe
► Experiments in digital car buying have mixed results
► Some car makers have tried, only to go back to old habits

Buying a car online has its benefits. It’s quick, it can be done at a time that suits you, and it bypasses pushy salespeople. It also reduces some of the complexity of buying something so important it only comes second to buying a house.

Naturally, some car makers have cottoned on to the idea over the last few years when it comes to buying a brand new car. As well as offering digital storefronts that allow you to configure your new car and order it from your computer or phone, some even offer additional services like direct delivery and collections (including collections for servicing, in some cases).

Buying a car online: the car makers who’ve taken the plunge

For example, when Genesis – the Korean luxury car brand – officially launched in Europe in 2021, it originally didn’t rely on dealership locations spread in high-population areas like many other car makers. Instead, it used ‘studios’ in urban locations (there were originally two Genesis Studios in London and one in Edinburgh for its UK business), with every other part of the buying and aftersales process service being performed remotely. Polestar, too, follows a similar model.

Volvo goes even further, aiming to transform the experience of buying a car into something akin to buying a new phone. The Care by Volvo subscription service offers extra flexibility, meaning buyers don’t have to be locked into a multi-year lease if their circumstances change (albeit for a punchy premium over a traditional finance deal).

‘It’s a very digital offer,’ says Björn Annwall, Volvo’s chief commercial officer. He says one big weakness with the traditional approach is the likelihood that a car in the right spec will be in the wrong place at the wrong time. ‘Here it gets shipped directly to you when you order it.’

Buying a car online: why it’s not been that simple

But not everyone agrees it’s the future. Some buyers still want the tactility of looking at their next car up close ‘in the metal’, and even some of the manufacturers who’ve implemented online buying know there are limits. Back in the middle of 2023, an industry insider told CAR: ‘I’ve done the online stuff and the shopping malls, but it keeps reverting [to traditional dealerships] when all the hype has cut through. Look at Genesis, for example: they’ve recently announced they’re looking for retail partners, because they’ve reached a point where the online stuff can’t work any more.

‘Most of these models appear to work in the short term, but if you look back over the last three or four years, they’ve then morphed back into a traditional model much more quietly. All of a sudden, you realise that you’re selling around 60 to 70 per cent of your cars the same way as everybody else.’

And it’s true: Genesis’ chief brand officer Graeme Russell admitted earlier in 2023: ‘I think our larger markets, like Germany or the UK, will need an evolution of that model. Working with agency partners [i.e. more physical locations, but where the brand directly controls pricing and inventory] is a recognition that in order to achieve the potential of getting a brand to scale, we need to find the right partners.’

And that was the plan, in order to shift more units in its fledgeling European markets. Seven partners for the UK were initially located by June of 2023. But, by the end of 2023, it wasn’t enough for the brand in the UK market. Genesis’ UK operations as a separate entity have been wound down as the brand changes its business strategy; the brand will still sell cars in the UK, but via Hyundai dealerships as the restructured business is absorbed into Hyundai Motor UK as of 2024.

Volvo, meanwhile, also has its work cut out to convince more buyers; a spokesperson for the brand tells CAR it’s sold ‘over 12,000’ cars via Care by Volvo since it was introduced in the UK in September 2020; that’s a relatively low proportion given it’s closing in on selling more than 45,000 cars in 2023 alone.

Buying a car online: what happens next?

Volvo acknowledges buying a car online isn’t for everyone, and nor are subscriptions. Some customers still need that touchy-feely experience, and the company still needs locations for aftersales services and maintenance. ‘The need for a physical infrastructure is still there – you can’t stream a car – but over time it will be reduced,’ says Annwall.

While other manufacturers are almost entirely abandoning the idea. ‘Mainstream customers want to buy – and I want to underline this – want to buy a car in a dealership,’ says Luca De Meo (pictured above), boss of Groupe Renault, speaking during the Group’s Ampere Capital Markets Day in November 2023 and emphasising the point while discussing Renault’s growing range of EVs. ’70 per cent of them, according to our research, want to do that – against only around 30 per cent for early EV adopters. That’s where the Renault network in Europe takes the stage with its 4800 dealerships and 8000-strong service points, as well as 30,000 EV-trained technicians. This isn’t something a fancy website can replace.’

By Jake Groves

CAR's deputy news editor, gamer, serial Lego-ist, lover of hot hatches

Comments