Tesla’s online sales model means it is well prepared for...

Tesla’s online sales model means it is well prepared for Covid-19

As the world hunkers down to self-isolate and reduce the spread of the highly infectious Covid-19 virus, the world at large is shifting its work and learning environments to the digital age, cut off from physical contact with workmates, friends and teachers.

One of the industries to be hit hard is the auto industry. Car makers across the world are being hit by forced factory closures as governments impose lock-downs. Jaguar in the UK is the latest. Sales of existing stock are also getting harder, given the economic uncertainty and the restrictions of movement.

Reuters reports that in the US demand for new auto sales dropped 13% in the first 19 days of March, and it is likely similar effects will also be seen in Australia. For an auto industry already under siege from a declining interest in petrol and diesel sales, and a growing interest in electric, it’s going to be a difficult time.

The Australian Federal Chamber of Automotive Industries on Tuesday morning sought to reassure its member that car dealerships and service outlets are considered an “essential service”, but it also impressed that the industry is adopting measures to reduce contact with customers.

“The industry has considered and adopted a number of additional hygiene and safety protocols, including extended cleaning processes, personal distancing, and contact-less sales and service consultations – all with the number one priority of ensuring the safety and security of our communities,” FCAI CEO Tony Weber said.

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Tesla, which has long bucked the trend of traditional auto sales with its online sales model, is already prepared for this.

Buying a Tesla vehicle has always been possible to do online, and though there are showrooms that customers can visit it is not actually necessary to do so in order to buy.

Instead, customers can simply visit the Tesla website, configure a vehicle to their preference and hit the buy button. As many introverts can already attest, it’s already the perfect way to buy a car without having to be near anyone.

Tesla has also taken the buying process a step further since the introduction of a “touch-less delivery” system as we reported on Friday.

With the ability to assign a vehicle to a customer’s smart phone via the Tesla app, this removes the need to drop a car off face-to-face and hand over a key or fob. Instead, staff drop off the car in a delivery car park, disinfect and leave the vehicle ready for the owner to pick up after dropping off paperwork at a nearby location.

In the US, Reuters reports that despite a slump in sales, car makers that use online sales platform Roadster are seeing a 6% increase in traffic. One dealer told Reuters that for dealers that do not have an online sales model it may a “watershed moment”.

The online sales model is slowly being adopted by other car makers in Australia also.

In December 2019, Mercedes-Benz announced it would adopt an online sales model for its newly introduced all-electric EQC in Australia.

While customers can still visit one of 9 designated EQC showrooms to see and test drive the EQC, sales are now done via an online interface, and for a flat price (no more haggling with dealers).

Honda – which makes the all-electric Honda e (not yet slated for Australia) – has also on Tuesday morning announced it will adopt an “agency-style” business model, although it is unclear yet whether it will also adopt an online purchase interface.

Adoption of digital sales models may prove another brunt for already struggling dealers – but it is possible that in the brave new post-Covid-19 world, we will see an optimistic, electric, and digital future for the automotive industry truly emerge.

https://thedriven.io/2020/03/24/teslas-online-sales-model-means-it-is-well-prepared-for-covid-19/