How Covid-19 is Influencing Retail Car Sales and Consumer Attitudes

How Covid-19 is Influencing Retail Car Sales and Consumer Attitudes

COVID-19 has disrupted our lives, how we work, how we shop, and even how we invest. The pandemic has affected all industries, but the automotive industry has been hit hard. 

When lockdowns were imposed, many car dealerships closed and car-buying stalled. Mobility behavior also changed drastically as some commuters avoided public transportation owing to health concerns. Many people worked from home to stay safe. 

Things are better now, thanks to vaccines. However, key players in the automotive industry must understand how to adapt during such tough times to position themselves for faster recovery. Here’s how Coronavirus is influencing things in the auto industry.

Widespread Uncertainty Among Consumers

The sudden onset of the pandemic taught us one thing--life can change in an instant. People had to adjust instantly--cancelling flights and adjusting to lockdowns. Many people’s finances were affected, and some are yet to recover. 

Many consumers are still unsure about the future, and some have opted to postpone car-buying till things get better. Financial uncertainty among consumers has affected financial plans, and most are now taking time to make spending decisions.

More People Now Want to Own Cars

Consumer attitudes towards ride-sharing have changed, and more people now prefer to own cars. Many are finding comfort in their personal spaces and see car ownership as a great way of curbing the spread of the virus. 

When Coronavirus was at its worst, reliance on public transportation fell drastically. Usage of personal cars has almost doubled, and people who didn’t own cars before the pandemic are now considering buying one for health-related reasons. 

Digital Shopping Has Taken Over

Social distancing has significantly changed consumer behavior. Most customers now want to purchase cars with as little physical interaction as possible. And they don’t mind paying more for this service. Dealership sites which offer a great user experience and feature great car stock images are now very appealing to consumers. 

The car-buying journey--from shopping to delivery, is slowly shifting online. Automakers and dealerships must start providing at-home test drives and digital showrooms. They must start delivering vehicles to consumers’ doorsteps. Those who haven’t adapted to changing consumer needs must now digitize all steps of the car-purchase journey. 

More Targeted Offers and Deals

When it comes to car purchases, price has always been the key factor. Now more than ever, consumers are rethinking their decision to buy cars. Dealers can convince them by offering targeted offers, such as incentives and discounts. 

Savvy car shoppers are increasingly turning to digital platforms to compare prices, models and to find the best deals. In the first half of 2020, the search volume for the keyword “best vehicle deals” increased exponentially. 

Deals can speed up the customer’s buying cycle, which is a good thing for car retailers. Some dealerships are now offering customers cash discounts, flexible payment options, and shorter contract periods. Some are allowing consumers to purchase vehicles at short notice and offering 0% annual percentage rate and no-penalty payment deferments. 

It’s clear our world will never be the same, even after the pandemic is over. Consumers have had to change the way they shop, and manufacturers and dealers have to adapt if they want to stay afloat.

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