Industry Insights & Trends

The Impact of the Covid-19 Pandemic on Online Automotive Sales in Europe

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Two insights regarding the impact of the Covid-19 pandemic on online automotive sales in Europe are increased online automotive searches and consumer online purchase behavior post-pandemic. Detailed information is below.

Increased Online Automotive Searches and Sales

  • One insight regarding the impact of the Covid-19 pandemic on online automotive sales in Europe is that the Covid-19 pandemic has increased online automotive searches and sales.
  • McKinsey & Company states that in April 2020, many car dealerships closed, and car buying in Europe was halted, with sales dropping 80%. The closure of car dealerships due to the coronavirus pandemic forced automakers to become more creative in selling their wares. In the UK, carmakers, including Peugeot and Volvo, offer fully online sales and deliver new, customized vehicles to customers’ doorsteps.
  • The healthy and safety concerns during the coronavirus pandemic are shaping car consumer purchase behavior in Europe. Since lockdown started until now, consumers shifted their interests towards online channels to search for information and then buy the car. The pandemic provides car sellers with the opportunity to “bring the showroom experience to the home, using technology solutions that enable real-time video interaction with customers, from car presentation to contract closure.”
  • According to a recent McKinsey digital sentiment analysis, the use of digital channels has increased by an average of 13%. For Auto Trader, an automotive marketplace, despite closures and tight restrictions across the UK, the marketplace received 52.9m visits in November 2020, representing a 14.4% increase in November 2019. The trend has shown that lockdown “has done little to slow buyers’ desire to purchase their next car online.”
  • In addition, online car market AutoScout24, which operates in Germany, Austria, Italy, Belgium, and the Netherlands, records that internet searches for older cars had spiked since the summer. For example, the data showed that in July through September, online searches for vehicles over 20 years old went up by 80% in France, 77% in the Netherlands, and by 59% in Belgium. Across Europe, people are buying older cars because they are desperate to avoid public transport but wary of spending more on newer vehicles in these uncertain economic times.
  • According to the Auto Trader’s director of data and insight, Richard Walker, the company and other retailers are confident and believe the forecast for the months ahead is positive. He sees the consumer demand partly driven by the growing dislike of public transport.
  • McKinsey & Company surveyed consumers in several European countries, including those in the UK, Germany, Italy, and France, on their current and future sentiment, behaviors, and mobility surrounding car buying and servicing. The findings were that the digital channel has become more important in the whole purchase funnel, and “less than a third of younger consumers prefer conducting car sales & aftersales in person at a dealership.” The survey also found that respondents are more interested in contactless services, and around half of the respondents are ready to pay extra for this service.”
  • In the opinion of the Boston Consulting Group (BCG), Digital shopping for cars is expected to grow slightly faster in Europe because “a larger portion of its new-car market is built to order.” Also, dealer franchise laws are somewhat weaker than those in the US, which gives the industry more flexibility.
  • COVID-19 has caused many people to evaluate whether they should go back to using public transit or choose to drive instead. According to BCG research, 8% of European consumers say they are more likely to buy a car because of the pandemic.

Consumers Online Purchase Behavior Post-Pandemic

  • Research by Statista on the attitudes people have towards purchasing cars online after Covid-19 in the UK found that 32% of respondents from the UK would consider buying cars online in the future, post-pandemic world.
  • As stated by a survey by McKinsey & Company that studied consumers in several European countries, including the UK, Germany, Italy, and France on their current and future sentiment, behaviors, and mobility surrounding car buying and servicing, a third of consumers said they value constant access to a private vehicle more than before Covid-19, especially amongst younger consumers.
  • A global survey of over 3,300 consumers in nine countries, including Germany, the UK, Italy, and Sweden, during August 2020 found that as the world keeps wobbling from the impacts of Covid-19, millennials will lead the car ownership boom over the next six months. The survey adds that people aged 24-39 will lead the push towards personal car ownership. With millennials more comfortable using online platforms for car purchases, EY says carmakers must ensure the group’s preferred cars are available online.
  • Financial Times says the coronavirus pandemic has the potential to reverse long-term trends of non-ownership among younger consumers, with the majority preferring to shop for cars online and less than a third preferring in-person contact with sales & aftersales personnel in a dealership. This trend will impact future online car sales in Europe positively.
  • In the UK, since the prime minister urged those returning to work to avoid public transport, the UK online car marketplace Auto Trader received over 1 million views on the day of the speech, the highest since the lockdown began in March.
  • A survey by Auto Trader found that more than half of the UK driving license holders who don’t have a car are considering buying one in the future to avoid using public transport after the coronavirus lockdown ends. However, some feel that as more people return to work and the roads clog up again, the appeal of sitting in traffic may dwindle.
GLENN TREVOR
Glenn is the Lead Operations Research Analyst at Simple Manifestation with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.

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