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Online car sales could spark 27,000 dealership jobs losses within a decade

Car dealers are being urged to move with the time in a bid to avoid a predicted trend which could see online car sales lead to the loss of 27,000 automotive sales jobs by 2027.

Research from online review community Trustpilot and the Centre for Economics and Business (Cebr) reveals motorists looking for a new car will become increasingly likely to buy online, rather than from a dealership, with around 20% set to be sold online within a decade.

Trustpilot warned that traditional salespeople could take a back seat as tech-savvy consumers become more comfortable making purchases of new and used cars online.

The new research uses consumer survey data to predict that car dealers could see more than £41 billion revenue and 27,000 jobs disappear if they fail to adapt to the new sales environment, with nearly £1.5bn worth of sales moving online by 2020.

Trustpilot’s UK managing director, James Westlake said “Competition will be stiffer than ever, as dealers will be forced to compete across both traditional and digital sales channels.

“The key to winning this race is not just on price, but by generating consumer trust and confidence to buy a car through their platform.”

Dealerships are being encouraged to adapt their current business model to meet changing consumer behaviours.

Manufacturers including Hyundai, Peugeot and Smart are already responding to consumers’ desire to purchase online, while Tesla’s new sales model cuts out the dealers altogether and sells direct to customers in their branded stores.

Christian Jaccarini, an economist at the Centre for Economics and Business Research (Cebr) said: “As automotive retailers establish online platforms and consumer behaviour adjusts, we expect to see car sales shift online, as seen in other industries.

“Transaction numbers may be small at present, but recent evidence suggests that businesses which fail to accommodate changes in consumer behaviour will leave themselves exposed in years to come.”

The pace of change could be slower than that seen in international markets, however. Whereas just 20% of UK consumers are open to buying a car online, 60% of consumers in China and India are already open to the idea, according to research from Capgemini.

Tim Smith, Group Strategy Director for GForces, a leader in providing digital technology, marketing, and consultancy services to the automotive industry, believes online sales are an opportunity, not a threat, to the UK’s vehicle retailers.

“More of the car-buying journey takes place online than ever before,” Smith said.

“And that online environment allows us to have more sustainable, productive, and engaged relationships with our clients. Ultimately, that means greater insight, allowing us to respond better to customer needs, and see improved conversion as a result.”

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