The rush to buy cars online at wholesale has shaken traditional car dealerships, forced them to rethink their business models, and caused many people to withdraw from the business altogether. But for those resellers who remain, the e-commerce takeover during the pandemic can ironically offer a big advantage.
Younger consumers are all the more likely to trust the auto sales process when it travels online. “For young Americans,” the rise of automotive e-commerce “has increased confidence,” Joanna Piacenza, head of industrial intelligence for Morning Consult, told me. His perspective is based in part on a new survey conducted by the Washington, DC-based market research firm of 4,400 adults to gauge their confidence in the auto industry and how it’s built – and hurt.
“It’s meeting them where they are. They are used to making sales on their phones. Don’t make them get up and go to a car dealership. They are used to the online platform. And if they are suspicious of anything, they know exactly how to go to the website where they can check something out. They are used to this interface. This will increase their confidence in the industry.
On the flip side, Piacenza said, the growing problem American automakers have with microchip shortages is eroding consumer confidence in the industry as a whole and in specific brands. As shortages continue to weigh on production at companies’ factories – when stocks run out, strapping selection, late deliveries and inflating prices – potential car buyers are increasingly frustrated, she said.
“There is a growing risk not necessarily of consumer mistrust but of dissatisfaction with not getting the product they have saved up and want to buy for,” Piacenza said. “It’s not available because of the supply chain.” She predicted that the car shortage “will get worse before it gets better” and that if consumers “haven’t bought cars during the pandemic outbreak, you should probably wait until the chip shortage is over.”
Meanwhile, the Morning Consult poll revealed several other highlights:
Carpooling : Consumer distrust of ridesharing apps and ridesharing services continued to grow in this survey, as it has since 2018. Piacenza said the pandemic was a factor in which “people have been put off by the idea of sharing a car “when it first appeared.
Ford reigns: Ford was the most “sticky” brand in the survey, with 62% of respondents saying they had owned the brand at some point. Among other things, Piacenza believes Ford has benefited disproportionately from growing American buying sentiment over the past 18 months.
Brands at risk: Chrysler, Dodge and Buick were the brands most “at risk” in terms of customer loyalty and with the largest gaps between previous owners and returning customers.