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Digital Innovation and the Car Buyer Customer Experience

Digital Innovation and the Car Buyer Customer Experience

The car industry has been changing significantly, 10 years ago, car buyers visited 5 dealers before buying a car. Now they visit just 1.6 dealerships, on average. What will the customer experience be like for car buyers in the next 5, or 10 years?


The future trend is very clear - customers want the Amazon buying experience for cars too, now already available at An eCommerce platform they trust, where you get the best deals, and can compare every possible make and model,fiddling with filters for budget, seating capacity, fuel type, transmission, drive, year, accessories, insurance and other factors. Once you find a vehicle you like, the buyer will be able to customize it to match very specific needs and preferences. The next step would be the automatic scheduling of a test drive at a place and time of the buyer’s preference, and then - if you like it, the customized vehicle already there in the eCommerce portal’s database would be booked and delivered. 


Around half of a dealership’s profit typically comes from the workshop, and that’s about to change. Electric vehicles reduce wear and tear, and will not require as many trips for repair and maintenance. In-car monitoring technology and connected apps will automatically fix a lot of issues without requiring a trip to the garage, and autonomous vehicle fleets won’t cause the damage that human drivers are responsible for now. By 2030, the car buying experience will be hugely different - fully digitized, and providing the customer total flexibility in choosing what kind of vehicle they want. So where does that leave your dealership? The current dealership business model is unviable, and must move fast to adapt to meet buyers where they are enquiring about it - on their digital device and channel, which could be social media, email, a mobile app, or on the web.


For buying cars, much like everything else in the world, the research now begins and is mostly done online or on mobile, and you have to be on this very short list to get a test drive. Manufacturers and dealers must take notice of this change as well as the expectations of their customers to be provided with a seamless process of online research to offline transactions. The average lead-to-dealership conversion rate for automotive or vehicle sales websites is around 3%. The rest - the 97% who don’t raise a lead - are digital lookers. Any dealer that manages to convert even a small number of these interested parties into leads will be able to increase their conversion rate instantly.


Before we get to the part about how to convert more website visitors into leads, let’s take a look at why selling cars is so so different from anything else. In a recent talk, Martin Schwenk, MD and CEO of Mercedes-Benz India, said that digital will be a lot more than it is today, and their eCommerce solution will be selling new and pre-owned cars online, as well as accessories. However, he also stressed that there will be customers who want to see the cars and drive them, so the current business model also must be kept intact.


Striking this balance between increasing digital sales while continuing to maintain your brick and mortar locations and sales teams is one of the things we (Lucep) were asked to address under a collaboration with Daimler (facilitated by PlugandPlay APAC and StartupAutobahn). We have in fact already implemented this model of moving digital leads instantly into the hands of the right sales team member at the right dealer location for a Daimler company. How does it work?


The news for automotive sales, from all over the world, is just as dismal this month as it was last month, and the month before that. Auto sales have been going down for a record 15 months in China, and 11 months now in India. September sales were down 13.3% in the U.S., 24% in India, and 5.2% in China. Aside from offering huge discounts and pumping more resources into your marketing budget, what else can a dealership do to increase sales during such a steep and long-lasting global slump in automotive sales? 

This is where we come back to the 97% of digital lookers who don’t raise a lead. On average, a full 97 out of 100 people on your website simply visit a page or two and leave. They look at your social media posts silently, without interacting or letting you know who they are. They ignore your emails, or read them and delete.

To convert some more of these digital lookers into buyers, dealers must improve their digital customer experience, and make it a brand experience similar to what buyers expect when they visit your showroom. Specifically, they should be able to get the personal attention of a salesperson instantly, and get answers to all their questions. They should be able to ask for a test ride at their convenience, and at their preferred location.

If you can do this and offer a similar branded experience online and in-person at your dealership, with a seamless transfer of the buyer from digital to the phone and then to a test drive at a physical location, then you’ll be able to combat this global auto slump by generating more test drives from the same digital leads you were getting before.  



Zal Dastur is the COO & Co-Founder of Lucep.

Lucep is part of our Insurtech Batch 0 Program.

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