Volvo: Lockdown has changed car sales forever
Coronavirus means dealers have had to do business differently
Circumstances forced brands to speed up their transition to an online retail model, which will have a lasting impact
The push to expand online car sales services due to the Covid-19 lockdown will change the way new vehicles are sold forever, according to Volvo’s UK boss.
Registrations of new cars were virtually halted after the UK government’s lockdown rules forced dealerships to close in mid-March. Showrooms were finally allowed to open in England on 1 June and Northern Ireland on 8 June. There is still no firm date for when showrooms in Wales and Scotland will be allowed to open.
With dealerships closed, car firms and dealers attempted to maintain some level of service for customers by expanding current online services. Volvo UK, for example, accelerated enhancements to its existing online sales service, launched a ‘click-and-collect’ service and brought forward the full launch of Volvo Valet, a contactless collection and delivery option for cars that need servicing or repair.
“What we’ve done in terms of actions to tackle the coronavirus has essentially been two years’ worth of digital development in just eight weeks,” said Volvo UK boss Kristian Elvefors. “Despite the lockdown, we decided not to furlough many of our staff to make sure that we could keep a lot of people working on new developments that would help us keep customers interested and really help when it was time to restart.
“These are trends that we’ll see going forward. We’ll definitely see more of our operations move online in the future. We’ve learned so much working digitally which is going to be game-changing.”
Asked whether the online sales service has helped push sales during lockdown Elvefors said: “It has, and I’m sure that approach is here to stay now. Even with dealerships opening, the social-distancing rules are likely to limit demand, and there are people, such as those on high-risk grounds, who will be unwilling or unable to visit. So we need to make sure we continue to help them.”
“For us and the whole car industry, online sales are here to stay. The big challenge now is to offer all customers the same journey by whatever method they choose. Whether you’re at home or in a retailer, the approach should be omni-channel, with customers able to switch from online to offline and receive the same experience. That’s a big challenge to introduce, but it should become the norm.”
As well as new systems to aid new and returning customers, Elvefors said Volvo also “helped our dealers do whatever it takes to be online”. He added: “We developed material such as videos, e-learning training and PPE guidance for our dealerships to do what we can to keep them running and be prepared as possible for showrooms to open.”
Elvefors said Volvo UK will also embrace greater levels of flexibility and remote working now, based on “how much we learned working digitally” during lockdown.
He added that he has been impressed with the innovation shown by dealers in preparing to reopen, which began with service workshops opening. “We took a staggered approach, getting sales people working even before showrooms opened so they could call customers to set up deliveries or book in test drives,” said Elvefors. “I was really impressed by what our retailers did to be ready.”
Elvefors said he agrees with industry forecasts that the UK market won’t fully recover the sales lost from the lockdown period this year and is uncertain about June sales, given the likely reluctance of customers to visit dealerships when first open. But he is hopeful the second half of the year could be stronger.
“There should be a significant increase in Q3 and the rest of the year,” he said. “We’re confident customers will come back and there are many who will need a new car.
“It looks like it’s going to be a stay-at-home, stay-in-the-UK summer, with people having their holiday here, and that may help us because people holidaying in the UK may need to buy a new or used car.”
Volvo UK’s 2020 fortunes should also be buoyed by sales of the new XC40 Recharge Plug-In Hybrid T5, which was due to roll out to dealerships as the lockdown came into force. The full-electric XC40 Recharge P8 has also gone on sale, with deliveries due to begin early next year.
*Seat UK not convinced of demand for online car sales *
Not every car manufacturer believes that there is demand for a switch to online sales in the immediate future. Seat’s UK boss, Richard Harrison, said that although the firm has launched some digital services, there has been limited take-up of online sales.
Seat launched online sales capacity at stores located in the Lakeside and Westfield White City shopping centres, in Essex and west London respectively, but Harrison said demand had been “remarkably low – less than 1%.”
He added: “Buyers really value the human interaction, much more than being able to buy online.”
Harrison said Seat UK has developed a Live Showcase ‘virtual showroom’, where customers can be shown around a vehicle to help inform their decisions before they head to dealerships.
*READ MORE*
*Car showrooms in England re-open (1 June)*
*Volvo XC40 Recharge Plug-In Hybrid T5 UK review *
*Volvo XC40 Recharge P8: orders open for electric SUV*