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Online enquiries for Maruti grew from 4% to 16% between FY2017 to FY2020. This has jumped to 35% for the ongoing fiscal, according to the company. (Mint)
Online enquiries for Maruti grew from 4% to 16% between FY2017 to FY2020. This has jumped to 35% for the ongoing fiscal, according to the company. (Mint)

Covid-19 accelerates share of digital sales for automakers

  • Executives from leading vehicle manufacturers, including Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Tata Motors Ltd, Kia Motors India, Royal Enfield, Mercedes-Benz India Pvt. Ltd, said that they have seen increased traction in online sales amid the covid-19 pandemic this year.

Mumbai: The coronavirus pandemic has accelerated the adoption of digital platforms, with automakers witnessing a sharp rise in consumer enquiries and bookings coming through the online medium this year.

Executives from leading vehicle manufacturers, including Maruti Suzuki India Ltd, Hyundai Motor India Ltd, Tata Motors Ltd, Kia Motors India, Royal Enfield, Mercedes-Benz India Pvt. Ltd, told Mint that the companies have seen increased traction in online sales amid the covid-19 pandemic this year.

According to Shashank Srivastava, executive director, marketing and sales, Maruti Suzuki India, the share of online enquiries, which were growing at a slow pace year-on-year earlier, saw a sharp jump this fiscal due to covid-19.

“Online enquiries for Maruti grew from 4% to 16% between FY2017 to FY2020. This has jumped to 35% for the ongoing fiscal," Srivastava told Mint on Friday.

He said that India’s largest carmaker has received more than 1.5 million enquiries so far this fiscal and the month of October alone saw close to 300,000 enquiries.

When it comes to customers booking cars online, the senior company executive said that online bookings contribute upto 10% of overall bookings for Maruti. “Compared to pre-covid times, online bookings are higher currently by about 10%," he added.

However, Srivastava said, fewer customers opt for completing financial transactions online as most still prefer doing so at the showrooms.

“Most customers still prefer completing their financial transaction and taking the delivery of their cars at the showrooms as it is a high-value product. This trend has not changed even in the more developed countries," he said.

Several leading vehicle manufacturers including Hyundai, Mahindra & Mahindra Ltd, Honda, Tata Motors, Royal Enfield and others have launched their own online platforms in an attempt to transact digitally earlier this year. This includes Hyundai’s "Click to Buy" programme, Honda Car India’s "Honda from Home", Tata Motors’ "Click to Drive", M&M’s "Own Online", among several others.

“Since the launch of our online portal, we have noticed a great spike in the contribution of digital to our overall enquiries and sales. More than 20% of our sales have been garnered through online and digital channels with a sharp increase in direct booking of vehicles," said Vivek Srivatsa, head, marketing, passenger vehicle business unit, Tata Motors.

“Digital parameters, including web visits, lead generation, retails and others have more than doubled when compared to the same period last year. Our Click-to-Drive platform is integrated with our dealer systems, so bookings are passed on in real-time as well as transfer of payment, thanks to a complete mapping of all our sales outlets for seamless e-commerce functioning," Srivatsa added.

In a call with Mint earlier this month, Vinod Dasari, chief executive officer, Royal Enfield, had said that the bikemaker is receiving up to 60% of all bookings from its online platform.

Meanwhile, luxury carmaker Mercedes-Benz recently said that it sold over 900 cars through its e-commerce platform this year alone. For the German carmaker, which began accepting online bookings from this year, online is already contributing 15% of its overall sales so far, it said recently.

A spokesperson for India’s largest two wheeler maker Hero MotoCorp said that the company’s online initiatives have resulted in around 300% growth in both sales and leads from the eShop portal. “In the past six months, digital leads (generated through eShop portal and other connected social media) have grown to more than two lakhs in total."

While this digital trend is expected to deepen further as consumers continue to observe social distancing and follow health and hygiene protocols in their daily lives, vehicle manufacturers expect that the new normal way of life would be irreversible.

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