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4 Key Phases that Car Dealers Need to Navigate During & Post Covid-19

4 Key Phases that Car Dealers Need to Navigate During & Post Covid-19

In the short-term while in lockdown, we have all come to realize how important digital infrastructure is as a means to maintain productivity and to keep the economy moving; not to mention to contribute towards saving lives. In the medium-term, we will see a new normal arise over the next 12-18 months, with social distancing and other restrictions becoming a standard part of life. While these things may seem inconvenient now, there are huge opportunities to make things better for society in the long-term. To get the economy moving again businesses need to think differently and treat digital as no longer a ‘nice thing’ to have on the side but as an absolute necessity.

Starting right now, automotive brands and dealers need to start thinking differently as business will never go back to exactly how it was before – and while this is painful for some, others will see the urgency to change quickly and adapt to overcome a more challenging environment. In its entirety, this mostly revolves around the necessity for strong technology infrastructure, streamlined digital processes, and an innovative outlook on business as a whole.

Those who make the changes and invest wisely in the right areas now give themselves the best chances of enduring current hardships and an increased opportunity to propel their business to greatness in the future. Those who move too slow may find themselves out of time and ill-equipped to make changes by the time that significant losses substantiate on their balance sheets.

What is the Timeline?

Covid-19 Car Dealer Strategy timeline

The above timeline is a rough guide split into 4 phases, based on what we have seen happen in China’s car market since they lifted restrictions, our own Philippine data, and the knowledge that a vaccine will take 12 months or so to get into mainstream production. It is during this timeline that key decisions need to be made to come out of this downturn prepared and in the best possible position to move forward in the future.

Phase 1 - Lockdown

Closed Dealerships COVID-19

This is the current phase that we are in, and this is mainly about cutting costs to protect employee jobs, maintain cash flow, communicate to customers, and marketing only in certain key areas.

Reduce Spends & Focus Your Marketing

From a marketing standpoint, budgets should be reduced to only two main digital areas, general top of the funnel marketing to keep the brand name out there and then much lower in the funnel aimed at those who still have intent to buy. The high intent to buy options that you should keep open is your Google Pay Per Click (PPC), organic social media like your Facebook page, and car buying platforms.

Communicate Sympathy, Relief Efforts & Dealer News

Change and adapt your communication to your customers by sympathizing with the situation they are in, providing financial relief, and informing them of additional services once enhanced quarantine comes to an end. Make sure you are providing customers with what the new safety procedures and processes will be when partial re-opening occurs.

Nurturing Your Lead Funnel

Now more than ever, really start focussing on nurturing leads that are in your funnel, as these will be the ones that will close first when we move into a less restrictive environment. Categorize those leads that are looking to buy now, in one month, 3 months, and so on. These leads will be mainly from your website, Facebook organic, and AutoDeal.

Review Available Data

Use available data sources to determine how the market is reacting as time goes on to help position the business and current inventory. Look at your google analytics to give you information on your website data, use AutoDeal analytics to view buyer sentiment and industry trends. One example is that we are seeing increases in google search for budget car models, and that is correlating with our lead data. This type of data is so important to understand what consumers will be looking to purchase over the next 12 months.

Phase 2 - Partial Re-opening

Partial Reopening COVID-19 Car Dealerships

During this phase, dealers should be able to open their showrooms by up to 50% capacity and start seeing some of the lead nurturing come to fruition.

Communicate Showroom Safety & Innovative Services

Now that showrooms are opening you will need to effectively communicate opening hours, staff, and servicing availability. Make sure you are providing a safe environment for consumers and explain the process when visiting the dealership. Communicate if new additional services will be possible e.g. home service options, single occupancy test-drives, and how to make payments online.

Get Creative with Financing Offers

Now that it is possible to purchase a car again, consumers are going to need help through innovative financial incentives to get the ball rolling again. This might be to pay a large reservation online and get a certain amount off the final price, or it might be to buy now and start paying amortization in 3 months. Car trade-in is an area that could entice consumers to purchase a new car if accompanied with a good financing offer. Dealers and banks are going to need to get creative to enable consumers to purchase again.

Start Building that Technology Backbone

It’s time to start thinking about what the dealership needs in terms of providing a consistent online customer experience, technology to manage customer leads, re-marketing. Once those pieces are put into place then you are ready for a CRM as you now have a process to get data into the CRM. Other digital services to consider are car loans online, digital payments, e-signatures, service booking pick up/delivery, and home car delivery. 

Phase 3 - Social Distancing

Social Distancing COVID-19

At this stage, society will need mobility to get back to some form of regular functionality, and with limited public transport due to social distancing, and limited external travel, then people will be looking for cheap private travel options.

Less Showroom Traffic 

If possible consumers will not want to spend an hour or two in a showroom when buying or getting their car serviced. It is during this phase that dealers need to start implementing better technical experiences and solutions for customers to enable them to do more of the car-buying transaction online. This starts with how to position your dealership during the research phase, how customers find out about your products and offers, online communication, forms, and payment options. 

What home services can be provided from car pick up and drop off for servicing to home test-drives and new car delivery. 

Customer Experience Online 

Be meticulous about how the consumer wants to shop and build an ecosystem to provide that frictionless and seamless buying experience. Business leadership needs to become attuned to digital experience to understand how their customers want to shop. How many dealers have a mobile technology first mindset? AutoDeal now has 86% usage on our mobile traffic, hence dealers need to be optimized to capture mobile consumers.

A recent study by Deloitte highlighted the importance of customer experience;

Generation Y car buyers “value customer experience three times as much as vehicle design.”

Phase 4 - Post-Vaccine

Buy online COVID-19 Car Industry

Capitalize on Tech Investment 

At this point, society should be starting to open up and get back on track, and it’s at this point that you will start to capitalize on the hard work over the last 12 months to become more tech-driven and economically solid. As society will have become more accustomed to online and digital methods, you will be ready to meet those online expectations. Not to mention your digital lead process, data management and communication tools will be bringing you new insights you have never had before. 

More Domestic Private Travel 

Whether it's a good thing or not, there will be more private travel from bikes, electric mobility options to cars, as ride-sharing will be restricted, as will public transport, so people are going to need to think of other ways to get around. International travel will be restricted and will no doubt become more expensive, and with that expect a boom in local tourism, which will involve more private vehicle land travel.

A Potential Younger Audience

With the younger population over the last 5 years, they have gravitated to ride-shiring, but with those services closing down during ECQ, it gave that demographic less control over their mobility options. The other focus area moving forward is hygiene, and without total control of this in ride-sharing, there may be a new younger age group looking to buy a private vehicle. 

Capgemini carried out a recent global study highlighting that under 35-year-olds are now considering to buy a vehicle.

The shift in thinking comes as they correlate health and safety risks associated with shared transportation, like Uber, Lyft or even a local bus network. A whopping 75% of those surveyed said buying their own car will give them greater control of hygiene.

Conclusion

As the pandemic rapidly shut down dealerships across the country, dealers were left with very few options on how to keep their business moving. This has highlighted the need for increased investment in automotive digital retail, which would have enabled better communication with customers, manage and analyze leads, accept online loans and insurance, take online service bookings and keep sales going. Moving forward if car buyers don't have to go to a showroom or a bank branch then they will prefer not too, so those dealers who can provide more and more services online, with seamless experiences, will be the ones who thrive. There will always be a touchpoint between the vehicle and the customer for test drives and final transaction, but everything else should be offered online 24/7. This is a perfect opportunity for dealers to become virtual, lean, flexible, and make current sales channels more efficient.

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