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Send  Share  RSS  Twitter  23 Sep 2014

MOTORING: Downward Curve Of New Vehicle Sales Indicative Of Larger Trend

 





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New vehicle sales are slowing due to the depreciation of the rand, despite attempts to combat the downward curve with competitive pricing. Chief Executive Keith Dye, of TransUnion Auto Information Solutions, has said that motor manufacturers are “struggling to move metal and therefore trying to hold prices as much as they can”.

The fallout of the phenomenon can clearly be seen in the increase of second hand vehicles, says Jeff Osborne, Head of Gumtree Automotive and former CEO of the Retail Motor Industry (RMI). “The quality and variety of second hand cars that has become available on the marketplace is improving dramatically,” says Osborne. “This means that consumers can buy their dream cars for considerably less, and they do!”

Gumtree’s automotive category has grown drastically, attracting over 1.2 million unique visitors a month (equal to that of the 8th most popular local site on the web, Yahoo ZA), whereas Gumtree ranks as the most popular local website in South Africa overall.

“I believe we are going to see two things happen as a result of this development,” says Osborne. “Obviously, consumers are more likely to opt for second hand vehicles when making a purchase decision, but on the other hand, we’ll also see a shift in dealerships’ strategies. I expect we’ll see an even greater uptake in terms of online tools for lead management and generation as dealerships become more competitive.”

Osborne says that car dealerships will benefit by placing both their new and used vehicles online, especially if they deploy professional tools to manage their inventory. “The perception might be that only second hand cars (or cheap cars) are available on online classifieds and similar portals, but the reality is that there is a healthy mix of new and used vehicles, across all brands. If positioned correctly, you can not only generate great leads but convert users that were considering a second hand vehicle to look at a new alternative.”

Osborne believes that dealerships need to become more tech savvy overall in order to compete. “Consumers are becoming more tech savvy – they aren’t popping into their local dealership to browse as a first point of call anymore. They are doing in depth online research, reading up on social media and comparing prices. As a dealership you have to keep abreast of this trend. You have to understand how this plays into the buying decision and you have to cater to that.”

According to Osborne, traditional car trade platforms have (thus far) failed the car industry. “You need more than a dashboard that keeps a track of your ads in a dynamic dealership. You need creative control over those ads, and you need to be able to manage them effectively. Moreover, you have to operate the same way your dealership operates – acknowledging the various tiers that encompass a dealership, and the varying information that each tier will require. Effectiveness involves analytics, stock control, lead and staff management...traditionally sales platforms have offered an un-customisable, simplistic model for years, and it’s simply not good enough in this competitive environment.”

Osborne says that their site has recently opted to monetise the automotive category for that reason, while introducing what has been dubbed as the industry’s most advanced online inventory tool for professional dealerships. “Internationally, this has been the trend for classifieds. We’ve seen even the biggest industry leaders monetise specific categories – such as real estate or employment – in order to maintain and improve the integrity of their respective sites. Monetisation for us has never been about generating income, but about eliminating issues such as duplicate ads and placing more power in the hands of the advertiser. That is exactly the way sites should be operating.”

Still, Osborne cautions that dealerships should take an active role in the online world. “It’s not about sticking an ad up on a high-traffic site – the same principles employed in the offline world apply. Following up on leads, putting real effort into the copywriting and photography used...it’s about being an active participant.”




 
 
 
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