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Embracing the new normal in automotive trade

Ardyanto Alam
Ardyanto Alam

CEO of Garasi.id

Jakarta  /  Thu, July 2, 2020  /  09:36 am
Embracing the new normal in automotive trade

The first half of 2020 was a roller coaster ride for the automotive industry in Indonesia. New car sales grew healthily in Q1, but then as the COVID-19 pandemic forced many players to adhere to the large-scale social restrictions (PSBB), sales numbers across the board dropped significantly. New car sales reported a drop of 81 percent in May this year compared to the same period in 2019. This directly affects the dynamics of used car trade.

Since used car trade, car care and preventive maintenance services are not deemed essential, many businesses had to temporarily shut down. Some even had to exit the business. The surviving ones had to be creative without breaking the law. Some car dealers, of both new and used cars, were able to continue serving consumers thanks to their partnership with automotive e-commerce platforms. With this in mind, it is safe to assume that the demand for used vehicles is not disappearing, but merely delayed.

The best option for any business in the automotive sector to survive is to innovate and transform. Let’s talk about used car trade first. As the ability to visit used car showrooms was not possible during PSBB, many consumers turned to online platforms who advertised used cars as the primary destination to browse and hunt for their dream cars. With some extra time on their hands, consumers were able to further scrutinize their picks before making the decision to purchase. Even though the transaction may happen after PSBB is eased, the demand was stimulated and eventually realized.

Partnering with online automotive platforms provides used car traders the opportunity to get leads for incoming demand. Traditionally, online automotive platforms provide a selection of cars with attractive photographs. However, that’s not enough when the opportunity to visit, see, feel and test the cars themselves was restricted. Having additional features such as sales sessions via video call, live Instagram sessions and detailed reviews via pre-recorded videos became new innovative trends. They will continue to be so beyond this pandemic.

Taking it to the next level, proactive sellers go above and beyond by offering home test drives as well as remote financial simulations and consultations. One online platform even allows consumers to submit credit applications and get conditional pre-approvals within 2 minutes. This is thinking outside the box. Whereas in the past most people had to find a specific car before even applying for financing from leasing companies, now consumers are provided with financial assurance before finding their dream cars. This is a shift in the paradigm that has only come about because of the pandemic and its social restrictions. And this is actually great for consumers and leasing companies.

As virtual shopping becomes more acceptable, it is even possible for anyone to buy a used car without having to see it in person before delivery. This is already happening in the United States, China and some European countries, enabled by certain automotive online platforms. The one key reason for that: Consumers trust platforms that provide comprehensive information on the condition of cars, convenience and financial enablement for smooth transactions.

Another example of an online-offline collaboration is the home service/off-premise offering for car care and car maintenance. Many service centers used to do strictly offline business only and were not ready for an online presence. When PSBB hit, they were not able to open their workshops and many thought they had to wait and see, which adversely impacted their bottom lines. The creative ones found that there was nothing prohibiting them from providing off-premise services as long as they complied with health protocols. These businesses transformed their business operations, using online automotive platforms to match supply with demand. As many consumers become very conscious about face-to-face meetings in public places, shifting to home/off-premise-based service enables companies to continue serving their regular customers and even attracting new ones. When consumers are used to the conveniences of buying the service via online automotive platforms and the services are in strict adherence to the protocols, eventually this collaboration becomes the new normal.

Moving forward, the new normal is unavoidable, at least for the short term. To survive and eventually grow, all automotive players must transform and adapt to this new normal era. With the stay-at-home economy becoming the next growth opportunity, the best path to success is by collaborating and creating demand via online platforms, especially automotive vertical e-commerce. From something that was probably unheard of, auto vertical e-commerce became an essential part of fulfilling the necessity in car care and trade. For consumers, it is worth exploring and trying the services offered by online automotive platforms as the benefits in cost and time savings as well as peace of mind outweigh the traditional way of buying cars. (wng)

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Ardyanto Alam is the CEO of Garasi.id, an online automotive platform that provides a comprehensive solution for used car research, buying and selling, financing, all the way to car care and maintenance. Garasi.id was founded in 2017 and continues to grow via partnership, technology and innovation.

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Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.