• Sensus Automotive

How we are digitalising the Automotive industry in the MENA region

It’s clear to say, 2020 will be a year to remember.

Looking at the positives, for Sensus it’s been a time for reflection and ensuring we are positioned to offer the automotive sector in the MENA region the tools it needs to succeed in the new normal.

It is clear that digital solutions are now at the forefront of engaging with customers.

One of the biggest, and in some cases hardest lessons automotive companies have learned from this pandemic is how critical it is to stay ahead with digital solutions. For companies that have made investments in digital already, switching to remote operations or customers not visiting the dealership have been less of a disruption.

Undertaking digitization, however, needs a well-thought-out strategy built on the selection of sustainable, robust and scalable technologies. We are seeing many automotive companies in MENA examining these transformation roadmaps much more carefully over this period.

From a consumer perspective it could be perceived as a pretty stressful time to visit a dealership and purchase car. You need to find the model you want, haggle the price, find a solid loan, all while thinking about the health aspects of social engagement. For most of us, this process can take hours. Luckily, new technologies are making the buying process easier. Websites that allow consumers to purchase or reserve a car online without even entering a dealership are becoming common and an accepted process for purchasing.

A recent study has said that 42% of consumers are willing to buy a car without a test drive. 83% percent of customers would like to do 1+ steps of the purchase process online.

There is also the generation Z factor, this generation are now our consumers, they are used to living online and expect that companies match with their purchasing expectations. 49% of all 16 to 35 year old’s are now willing to buy a used car online.

When displaying a car on a website, retail industry trends show a sharp transition away from inventory videos towards 360 spins. We have to ask ourselves, why are auto dealers selling the second most expensive product most people buy in their lifetime but are still using technology that is superseded by a product that is proven superior by proven data.

A recent study done with the VW group showed a 23% improvement in engagement time on the website by using 360 technology.

The capability of dealerships to capture and share videos is more important than ever in today’s unprecedented climate.

The enhanced ability to engage remotely and inform car shoppers helps propel the buying process and expand opportunities to make customer connections inside and outside the showroom.

Video communication has a strong impact on the automotive shopper. It has been shown to increase appointments, shows and sales. Customers seek comprehensive information when they contact a dealership. Videos meet that need most effectively in the current climate for remote selling. Being able to track how a customer engages with a video is key. Studies show that if a customer watches a video three times, there is an 80% chance of conversion.

Video platforms allow dealership staff to deliver a highly personalized and immersive customer experience, which ultimately drives more engagement, lead conversions and sales.

Due to the current atmosphere of constant change, quick and easy communication with the customer is crucial.

In developed markets, subscription-based ownership models have already crossed 10% of monthly household incomes. We are now subscribing for literally everything, from mobile phone packages to even shaving blades and Netflix. Not to be outdone, the automotive industry is responding by developing its own unique, customized subscription offerings, we are now seeing these models being embraced in the MENA region.

By 2025-26, vehicle subscription programs could account for nearly 10% of all new vehicle sales. Throw in predictions of over 16 million vehicles being part of vehicle subscription services by 2025, and of 1 in every 5 cars in a subscription offering being new and it’s little surprise that everyone—car manufacturers, automotive dealership groups, car maintenance and repair companies, insurance firms, technology startups, AI companies, lending companies, concierge operators, and, most importantly, customers—are salivating at what appears to be a rich and ever-expanding pie.

It’s hard to provide a definition for vehicle subscription simply because it’s such a new concept.  But, at its most basic, it revolves around the notion of “temporary ownership” a shared mobility service where customers can access a vehicle by the month.

In addition to being highly flexible, vehicle subscription programs are perceived as being more cost-effective than traditional car leases, rentals, or outright purchases.

These are exciting times for automotive in the MENA region as we enter into a period of digital transformation and new business models.

The digital transformation trend in the automotive industry in the MENA region is shaking things up in 2020 and beyond. By and large, these changes will see huge improvements for dealerships and consumers.

Kevin Davidson | Director Sensus Automotive

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