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File photo used for representational purpose. (AP)
File photo used for representational purpose. (AP)

Online sales platforms may just be band aids for bloody wounds of auto industry

  • Plunging demand and trickling sales have meant most auto makers have strengthened online sales channels in Covid-19 times.
  • Digital platforms promise a safe and convenient option but how many online visitors actually end up making purchases?

In a world continuing to evolve to newer ways of living, working and getting by, there has been a sea of change in how different organisations and industries have adapted to a new normal. The auto industry in India is no different and in the face of collapsing demand over the last several months, has turned to digital means to reach out to prospective customers and provide them with the promise of a safe and convenient way of making purchases. Footfall on these online platforms have seen a surge for most as people tend to steer clear of showrooms but the clicks may hardly turn into actual transactions in current times of challenges.

Going digital with sales channels was but the obvious way forward for auto makers who had anyway suffered a tumultuous 2019. The promise of demand picking up was blown to smithereens with the Covid-19 outbreak and the ensuing lockdowns the world over. A pan-India lockdown has now been lifted but the omnipresent threat from Covid-19 remains as cases continue to surge. The economy has taken a hit and many analysts agree that people would tend to conserve cash in current times of crisis.

While demand itself is woefully low, online sales channels of auto makers only offer a glimmer of hope at best. The biggest roadblock may be the will to make a new purchase itself - cars are the second biggest personal investments after homes for individuals. Apart from this, the concept of looking at a vehicle on a screen and going forward with a buying decision is still unlikely as most prefer to get a feel of the vehicle and possibly test drive it before making up their minds.

Yes, test drives at preferred locations can be arranged but even then, the question about how many would opt for it in present circumstances are aplenty. "We are seeing a high level of traction on our digital platforms. People even choose to have live interactions with sales executives but final purchase decisions are still low," said an official from a major car maker who did not want to be named. "It is not fair to compare how many visits to showrooms converted to bookings and how many clicks online convert similarly. Digital platforms are just an additional option, at least for now."

In an HT Auto poll on Twitter, 50% respondents were not in favour of making a new car purchase online. Although the size of respondents' polled was under 200, this still gives an insight into the thought process because these respondents can be assumed to be net savvy to varying degrees if they are on Twitter.

At a time when passenger vehicle sales have declined for the ninth-straight quarter - plunging 78.43% in April-June period, the recovery process in the automotive sector is expected to be painfully slow. In such times, digital sales outlets may only provide minuscule impetus to arrest the freefall.

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