1. Auto OEMs gear up for virtual dealer showroom concept to cut costs

Auto OEMs gear up for virtual dealer showroom concept to cut costs

If e-vehicles showcased by OEMs at the Auto Expo got the cynosure of all eyes, it is another concept that is fast catching up – 'bring the showroom home'.

By: | Chennai | Published: February 15, 2018 4:56 AM
Vehicle dealers, AUTO SECOR, AUTO INDUSTRY, AUTO EXPO, Mahindra & Mahindra Vehicle dealers will welcome the change as it will significantly reduce costs, and allow them to focus on delivering the best customer experience. (PTI)

If e-vehicles showcased by OEMs at the Auto Expo got the cynosure of all eyes, it is another concept that is fast catching up – ‘bring the showroom home’. What it means is that in future vehicle dealerships will come to consumers, instead of the opposite which is currently in vogue.

Vehicle dealers will welcome the change as it will significantly reduce costs, and allow them to focus on delivering the best customer experience. Though it is not the beginning of the end of conventional vehicle dealerships, this concept may act as the vision for future among OEMs.

Mahindra & Mahindra, which has shown that its vision of the future of vehicle retail is based on the ‘bring the showroom home’ concept, believes that through the digital world, vehicle dealerships could eventually boil down to being mere touch points, more for the brand than for vehicles, said Collin Noronha, senior consultant, mobility (automotive & transportation) practice, Frost & Sullivan, after analysing the happenings at the Auto Expo.

Mahindra is currently testing the digital dealership experience in a few locations across India. Other OEMs are developing, experimenting with and enhancing digital intervention at dealerships. Some of these initiatives may currently be a means to offer a unique and enhanced dealership experience, but they are concrete steps in the direction towards the holistic digital experience.
The best part of this digital and virtual world is its versatility. Frost & Sullivan’s extensive customer research finds that a growing number of customers (not first time car buyers) are often sure of the vehicle they intend to purchase, so much so that they don’t even need a test drive. These customers are open to making a purchase without visiting the dealership as long as all their needs can be met in the comfort of their homes.

Through the virtual world, future car buyers may invite a sales person to their home, wear a pair of virtual reality headset, give his preferred model and variant a once-over in the virtual world, select his preferred colour, check the dealer’s stock and complete the purchase right there, he said.

According to Noronha, diversity of Indian consumers leaves vehicle manufacturers with the need to have extensive product portfolios, and this presents them and their distributors with huge challenges. Manufacturers have to ensure that their sales are an even mix of all their products so as to ensure profitability from all their platforms. For distributors, this implies bigger stockyards and bigger showrooms. Not only there is challenge of sheer number of different models from manufacturers, but also the number of variants in each model.

Noronha said other than marketing, the definitive success factors for strong automotive retail are just two. One, be present in every automotive retail cluster in the country, and two, the ability to give customers the experience of the exact vehicle of their choice. “The current dealership formats suffer from space constraints and do not allow for a thorough customer experience, therefore, necessitating an immediate feasible, scalable and long-term solution.”

The solution to this challenge is digital. There will certainly be one or two flagship vehicle models, and the rest will pretty much be interactive digital walls. While this format will allow for smaller spaces, these dealerships will offer customers an unparalleled digital experience, which will in effect magnify the overall vehicle buying experience.

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