I recently had an interview with Keo Hlope from Newzroom Africa. We discussed the effect of the first 100 days of lockdown on the automotive industry, used car sales, trends and insights.

As car dealerships started to open their doors to car buyers, they’ve been cautious about operating under the new normal. Car dealerships have embraced the fact that all cars have to be sanitized before and after the test drive, they’ve complied and put in place solid PPE requirements. Car dealerships are signing registers, taking temperatures, wearing masks and staff have been trained. I visited a few already and I’m encouraged at how resilient our retail sales people are.

South African car buyers were insomniacs

On the 27th of March 2020, we saw a 71% decrease in sessions and 83% decrease in searches on AutoTrader. We hit an all time low of 661,000 daily searches, but, the interesting thing was that, searches between 11:00 PM and 3:00 AM in the morning were on the rise – a trend that increased by 20%, whilst searches made between 1:00 AM and 2:00 AM, surged by 78%.

Car buying consumers were looking for cheaper cars

Interestingly, we saw another trend in the increased demand for cars under R200,000 during lockdown, which indicated that car buying consumers were considering trading down their vehicles. We specifically saw an increase in searches for cars under R50,000, which ended up in the top three of all searches during the lockdown period.

We also saw trends of car buying consumers trading down R1 million cars to R700,000 cars, and people trading down from R400,000 cars to under R200,000 cars.

Car buying consumers created opportunities

When the government announced that food deliveries were now permitted whilst sit down restaurants remained closed on the 29th of April 2020, we saw a surge in searches for vans and bakeries during this period. We ascertained the increase in searches for vans and bakkies to being a direct correlation with the supply of food and the vehicle types South Africans were searching for – a clear indicator that we are a nation that creates opportunities even in a pandemic.

The demand for used cars is on the rise

On 22nd of June 2020, we saw an unprecedented all time high of over 1.6 million searches in 24 hours.

A trend that’s continuing into July 2020. For the month of June, we have seen a 60% visitor increase year on year – an indication that the car buying consumer is shifting their wallet to used car, as the new car market is under pressure.

Car dealerships opened just in time. Any longer and we may have seen many more dealers closing their doors permanently. The truth is that car dealerships don’t sit on piles of cash. They invest it in car stock.

With car buyers being prudent with their wallets – dealerships are also reducing their costs, where they can and they’ve been cautious.

Car dealerships are using Automotive Digital Retailing Strategies

As we transition into the new normal, where car buying consumers are doing most of their research online, I would advise car dealerships to start using Automotive Digital Retailing strategies. Some car dealerships have even started re-engineering their backend systems in order for car buying consumers to be able to perform more of the transaction online.

Adding to that, we know that car finance can be long and time consuming and if car dealerships could focus more on driving transparency and moving things like finance online, car buyers would welcome not having to spend too much time inside the dealership.

A few years back, the average consumer visited 5 physical dealerships before buying a car. That came down to 2 on average pre COVID-19 and the lockdown. I suspect this number will tend to 1 or even less.

Car dealership staff will ultimately become product specialists primarily with the internet and software doing the rest.