Online vehicle sales will soon become the preferred form of car buying among private consumers, according to a Frost and Sullivan analysis.
In its recent report, the Global Vehicle OEMs' New Online Retail Strategies, the Texas-based market research firm projects that online retail sales will reach 1 million by 2020. By 2025, the analysis projects that number to increase to more than 6 million, representing 5 percent of global vehicle sales with China as the leading market.
"The popularity of the ecommerce model among the younger audience and the success of Tesla's online retail strategy is likely to encourage other automakers to explore online retail beyond just pilots," said Isaac Abraham, Frost and Sullivan senior consultant, automotive retail and business strategy. "With the emergence of novel purchase models such as vehicle subscription and short-term leases, the dealership of the future is expected to become more experience-centric."
In the report, an online transaction is considered to have occurred when a vehicle is purchased via a digital platform, without interaction at a physical dealership. Traditional retail transactions will remain a popular option for fleet and corporate buyers, the analysis determined.