End-to-end online sales of passenger vehicles (PVs) have seen an upswing in the last three years as Covid-related disruptions led companies to focus more on such channels and customers getting more comfortable with the idea.
Some car manufacturers started basic online channels in 2019, which were sharpened during 2020-2021, and today, sales through the medium for leading players such as Maruti Suzuki, Hyundai Motor, Tata Motors, and Honda Cars India range around 10-25 per cent, with Maruti’s share being the largest.
Companies FE spoke to said that it’s the youth as well as the population in the metro cities which are driving online sales.
For instance, in April 2020, Hyundai expanded its end-to-end digital platform ‘Click to Buy’ to pan-India level after launching it on a pilot basis a few months ago. During the same month, similar platforms were introduced by Tata Motors (Click to Drive) and Honda Cars India (Honda form Home). While Maruti earlier had vehicle booking and configurator platforms, it came out with an end-to-end digital car financing platform, Maruti Suzuki Smart Finance, in December 2020.
The digital platforms provide comprehensive information to customers regarding car configuration and price, promotional offers, finance options, and preferred delivery locations, among others.
For Maruti, end-to-end online sales accounted for 11per cent of its total sales in FY20, which went up to 22 per cent in FY21 and 25 per cent in FY22. “Post-Covid, people have realised that it is easier for them to do an enquiry online than approach showrooms,” Shashank Srivastava, senior executive director – marketing and sales – Maruti Suzuki India, said.
Srivastava said that increasing internet penetration is a factor behind pushing sales via the channel. “We have close to 700 million internet users and they are almost equally distributed between urban and rural areas,” he said. Maruti has already digitised 24 of the 26 touchpoints that a customer has while purchasing a car from the company.
“Our estimate is that the industry-wide PV retails through online platforms is around 5 per cent,” Srivastava said.
Hyundai’s retails through Click to Buy have moved into double digits (in percentage terms) in CY22 from low single digit in CY20.
“These are concepts that take time to fructify. These are like startups, which should not be judged by the profits of the first year,” Tarun Garg, director – sales, marketing, and service – Hyundai Motor India, said.
A Tata Motors spokesperson said that in FY22, 45 per cent of enquiries that the company received and 15 per cent of its sales were from online channels, of which Click to Drive was a key source.
Honda from Home contributed 2 per cent of the company’s overall bookings and retails in FY21, with its share increasing to 5 per cent in FY22. During April and May of the current fiscal, the online platform’s share has grown to 10 per cent.
Kunal Behl, vice-president, marketing and sales, Honda Cars India, said that the new City e:HEV has got a tremendous response from the digital buyer and almost half of the bookings are from the Honda from Home platform.
“In an age where digitisation has become a defining force in human lives and there is an increasing trend of customers opting for the online car-buying journey, our aim has been to give them an up-close and personal experience of brand Honda through a digital platform right from exploration till they drive our vehicles,” Behl said.
Though companies are pushing online sales, they are also opening more physical retail showrooms. Since 2019, Maruti’s showrooms have increased by 8.43 per cent, Hyundai’s 8.08 per cent, and Tata Motors by 30.57 per cent.