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Car retailers should be ready for post-coronavirus bounce back, says Auto Trader

Nick King, Auto Trader’s insight director

While SMMT data detailing March's 44.4% registrations decline delivered evidence of the automotive retail sector's COVID-19 coronavirus lockdown decline, Auto Trader has insisted that car buyers are still researching their next purchase.

Auto Trader created a free webinar, “A view of the digital automotive landscape”, to help give some insight on what it has been seeing in the UK with consumer behaviour online as the UK continues its lockdown to help battle COVID-19.

And the classifieds website, which said it will suffer April losses of up to £7 million in a bid to help car retailers mitigate the impact of coronavirus by axing its fees and deferring March payments for 30 days, revealed that the UK’s broader classified industry had seen traffic volumes drop to a low of 48%, before before its own marketplace stabilised into what could now be seen as “the new normal” for this current lockdown period of around a 25% reduction.

As European new car markets like Italy, which is slightly further ahead than the UK in terms of where it is with the coronavirus outbreak, have seen its new car registrations decline by 85%, Sophus3, the consumer behaviour research company, said that OEMs have seen their own website traffic volumes reduce by 28% in March on average across the Big Five markets in Europe.

The UK’s OEM website traffic dropped by 26% month-on-month to March 22 from 774,000 to 572,000 daily visits. After the lockdown on March 23, site visits for OEMs dropped by 62% to 294,000 visits.

However, there is some positivity to be found with 75% of retailers telling Auto Trader in its own internal survey that they are continuing to stay active with online enquiries during the UK lockdown.

Auto Trader has also seen an 8% increase in visitors saving vehicles that they have under buying consideration, with a further 44% say they’re more likely to spend time online researching for their next car

Nick King, Auto Trader retailer insight director, said: “The consideration to purchase has not drastically changed, although the recency has been affected slightly.

“This is the time for retailers to make sure their digital forecourt is firing on all cylinders.”

Nearly 60% still in market to buy

There have been slight increases in those putting off their decision to purchase, as would be expected due to the current uncertainty on when the lockdown measures will start to ease, with the biggest increase seen in those looking to buy in the next six months.

Despite the lockdown, over half (58%) of respondents said they will still buy a car, but later in the year, while 14% said they still want to buy now.

Auto Trader’s consumer data shows email was the most preferred method of communication at 53%, followed by phone at 28%, then live chat 9%, text message 6% and online forms at 4%.

Sophus3 data also shows OEM website visit duration has fallen by 16% to 2 mins 30 seconds on average, while pages viewed also dropped by 18% to 2.7 on average.

Some manufacturers have seen less of a decline in traffic since the UK lockdown with Audi, Land Rover, BMW and Mercedes-Benz performing better than others, while VW, Hyundai and Nissan also have seen less of a decline in traffic compared with other volume brands.

Ian Plummer, Auto Trader commercial director, said: “Consumer behaviour is starting to stabilise and we could now be starting to see the bottom of the downturn.

“When the market does come back it’s going to be a while until build to order will return to normality, so retailers will be looking to fulfil demand from vehicles that are already in stock.

“The market will bounce back and what’s clear is that having stock that is easy to find and easy to buy will be fundamental to retailers’ reboot strategies when we come out of this.”

 

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