China turns to online car sales as coronavirus spreads

Industry

More automakers are selling cars online in China as worried consumers stay away from showrooms to stop the spread of the coronavirus.

Chinese carmaker Geely is the latest to launch a new online service to try to boost sales in the country.

It joins the likes of Tesla, BMW and Mercedes-Benz who are now actively marketing cars over the internet.

The online trend comes amid a downturn in car sales in China, which plummeted 92% in the first half of February.

Geely, which owns black cab maker The London Electric Vehicle Company and Volvo, said customers can now order and customise their cars on its website.

China’s largest privately-owned car maker will also offer test drives without potential customers needing to visit the showroom, as the car can be driven directly to their home address. Geely calls it a fully “contactless” vehicle purchasing service.

Mercedes-Benz said it was working closely with its Chinese dealer partners to support its online channels. “In face of the current situation, we have extended our online offer and observe a positive response from our customers,” a spokesman for the German car maker said.

Consulting firm Frost & Sullivan estimates that almost 825,000 new vehicles were sold online globally in 2019, either through online financing or by making a part payment online. It estimates that by 2025, 6 million vehicles will be sold through online platforms and says “the coronavirus will provide impetus to digital retailing for cars”.

“As witnessed in China the postponement of purchase decision is encouraging vehicle manufacturers to redirect resources towards online marketing and e-commerce platforms,” said Sarwant Singh, managing partner at Frost & Sullivan.

Carmakers such as Tesla and BMW have also started to promote products heavily online as Chinese authorities warned people to stay away from public places. Elon Musk’s Tesla has already been shifting to selling more cars online to stay ”financially sustainable”.

Car sales in China dropped 92% for the first half of February, according to the China Passenger Car Association (CPCA). It said there was “barely anybody at car dealers in the first week of February as most people stayed at home”. China is the world’s biggest car market, selling more than 21 million vehicles last year.

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