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Convenience no longer means local. The decline of dealer capture areas.

Convenience no longer means local. The decline of dealer capture areas.

Setting up car dealerships in geographic hotspots is nothing new. Even today, with the exception of highly populated areas like Quezon City, the majority of car brands in the Philippines only have a single dealer to serve a specific locale. This will consist of a centralized dealer in the province (maybe with a satellite office or two) and in Metro Manila – a core dealer taking center stage in much of the major cities.

The rationale behind this is quite simple, the dealership is to serve as the local dealer for the said community, providing sales and servicing options to the customers conveniently on its doorstep. In an age before the internet, smartphones, and social media, this made a hell of a lot of sense for dealers to capture that ever so important foot traffic.

With the rising trend of e-commerce and the tech-savvy nature of Philippine consumers, we decided to evaluate how relevant the notion of a local car dealer was based on the three billion pesos worth of sales that have been tracked using the AutoDeal.com.ph website.

Based on our data, we found that 37% of customers who purchased with the assistance of AutoDeal did not purchase from their local dealer. This is to say, that the customer bypassed the dealer on their doorstep and transacted with an AutoDeal Partner.

Looking closer, we discovered that of those 37%, the average distance travelled by an AutoDeal car buyer was 69 kms (the equivalent distance of San Fernando, Pampanga to the outskirts of Quezon City), some traveled even further. We could say that the furthest was 13,665 km - the distance between New York City and Quezon City, which was a transaction completed by an overseas Filipino worker (OFW), but that might distract us from the discussion at hand.

So why are customers traveling further distances?

There a number of possible reasons, the first could quite simply be that customers are finding better deals online from Metro Manila dealers who are better advertising themselves. However, even if this were the case, would the customer stop by their local dealer to compare rates? Possibly not. 

In the fast day-to-day environment that we now find ourselves in, being accessible online is the new form of convenience that customers are looking for, especially with regards to the new generation of first-time buyers who live in the on-demand world of UBER, iFlix, and food delivery services.

Put simply, if you’re not online, you’re no longer convenient.

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