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Tech developments pose challenges for car dealers

Car dealerships will face significant challenges in the next decade, related to car sharing, alternative fuels, smart cars, and new competitors, according to research by professional services firm EY.

Botond Rencz

"Traditional dealerships will have to transform their operations in order to stay relevant," EYʼs press release says. The research was conducted with the involvement of more than 1,000 customers and 400 dealerships.

Eight out of ten people gather information online, for an average duration of ten hours, according to the research. Some 70% of people already arrive at a dealership with an intention to buy, buying their car from the first dealer visited.

"The process before purchasing a car has significantly changed," says Botond Rencz, EYʼs country managing partner for Hungary. "Due to technological development, the whole decision process of buyers can be supported with online tools, from gathering information, through picking the suitable vehicle, to the purchase and servicing."

Despite these findings, online visibility is still not the priority of sellers, with 80% of respondents not planning new developments related to their digital presence. Most dealerships still turn to traditional marketing tools, while about two-thirds of customers find events organized by eight out of ten dealerships less important.

"As soon as possible, dealerships will have to create a digital strategy that allows them to keep their decisive position in sales," Rencz adds.

More than 60% of customers over 50 years of age think they will buy a new car from a traditional dealership by 2025, with the ratio dipping below 50% in the case of respondents in their thirties.