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Online direct sales sites lead to “challenging year” for manufacturers

James Tew, iVendi

Manufacturers are struggling with the direct new car sales web sites they have established over the last year, says iVendi.

“The reports that we hear from official and unofficial channels are that the online direct sales sites established by manufacturers have only generated a trickle of new car sales so far,” said James Tew, iVendi chief executive.

He believes used car retailers enjoy a much higher degree of flexibility over factors such as price and can offer a broader and more effective range of part exchange solutions.
 
Commenting on the pitfalls of manufacturer, offerings, Tew said: “They all suffer from one key problem – in a market where virtually every new car is available at a substantial discount from a dealer or broker, new cars sold online by manufacturers are offered at list price.
 
“Unlike any other online retail model you could think of, it is more expensive to buy a new car online direct from the manufacturer than to pop out to your local retailer. Until this issue is resolved, these enterprises are severely compromised.
 
“To an extent, even franchise dealers selling new cars online suffer the same issue – they have to advertise at a discount to appear competitive – and this often doesn’t sit well with their manufacturer.”
 
Tew explained that used car retailers – whether car supermarkets, independents or the used operations of franchise dealers – were already establishing themselves as the leaders in generating significant numbers of sales online.
 
“The fact is that used car operations do not suffer from this structural pricing problem and are not caught up in the politics of manufacturer-dealer relationships, he adds.
  
Early in 2018, iVendi will launch the next release of its platform, providing what is believed to be a world first off-the-shelf complete online motor retailing platform for dealers. It will allow businesses ranging from major groups to small independents to simply plug in the solution to their existing web sites and start retailing online.
 
A trial version of the platform has been in operation with up to 500 dealers since Spring and is currently handling sales in excess of £2 million per month.  

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