Online is creating new competitors in Automotive

Car manufactures are now facing competition not only from new manufacturers unencumbered by legacy preconceptions, contracts and systems, but also from niche players seeking to exploit digital weaknesses within the Automotive sector.

New competitors who sell cars

Tesla have disrupted the market, leveraging a Silicon Valley start-up mentality to drive a company value seemingly disconnected from sound traditional metrics around profit or number of cars sold. Whether this is sustainable is subject to debate, however it is clear that they have digital at the heart of products, sales and customers.

The ability to sell cars via digital channels, either exclusively or through a reduced offline footprint significantly reduces what were previously insurmountable barriers to entry and will allow new EV manufacturers entering the market to focus on highly targeted customers. Digital changes the all or nothing nature of automotive brands operating in markets and supports cost effective sales and operations in smaller and more tactical situations. However, it is also through the use of the same digital channels that car manufacturers are responding, reshaping their businesses and setting up for a bright future.

New competitors who don't sell cars

However, it is niche digital players such as Carwow that have enjoyed most initial success in taking advantage of the sector's slower take up of online. Creating a price comparison marketplace for franchise dealers by a simple, but effective application of a traditional online marketing solution to the industry problem of price transparency, we can see how, by applying best online practice from other sectors, they have been able to create a huge opportunity.

Other industry leaders such as Auto Trader are enjoying the fruits of being one of the first to successfully make the transition from offline to digital publisher, but it could be the threat from global digital powerhouses if they felt so inclined, that should be driving standards in an industry that is to a great extent, trying to reinvent the digital wheel.

In summary

Car manufacturers are having to deal with unprecedented levels of disruption. This has created opportunities for direct and niche competitors, all taking advantage of the slow digital uptake and using this to appear where once the barriers to entry were once too high. Car manufacturers are now responding, embracing digital in the same way as other sectors, such as in the retail sector and are reorganising their businesses. Assisted Selling helps by providing the six basic pillars required to make this change and an approach to help shape the type of organisation required to do so.

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