Car showrooms aren’t exactly what they used to be anymore. Drop by one on a long weekend or a public holiday, and there’s not much of a crowd going on. And this is all just a symptom of the change in direction for how we buy cars. In Malaysia today, we can already obtain comprehensive information about the cars we are interested in online, and from there only we proceed to contact a dealer. Things are about to change even further thanks to brands like Tesla, Smart, Mercedes-Benz, and Volvo. Here’s why.
All the companies mentioned are taking a direct-to-consumer approach, some of which have already been that way from the beginning (i.e. Tesla) and some which have switched to it from the traditional dealership model. And judging by how quickly we have all become accustomed to ordering food deliveries online, the adoption of the more direct-to-consumer method of buying cars shouldn’t be too difficult either. As Smart cars puts it on its website, “Ordering a car is as easy as buying pizza”.
If you’re still confused as to what this all means, you’re not alone, as we’ve become quite accustomed to the traditional dealership model
What it basically means is that you will be able to buy your car online from the comfort of your own home. And you will be able to see the full stock availability of the car that you would like to order. Take a look at Mercedes-Benz Malaysia’s website now and you will see what this means.
It is as if all cars are placed on a shopping rack for you to select – There might be a blue A 200 next to a grey A 200, and on the shelf below it is a black AMG A45 S and a red GLB. They won’t be arranged in such order, but you get what it means. You can also see where the stock is located on Mercedes-Benz Malaysia’s website
The same thing can be seen on Tesla’s UK website and Smart Germany’s website for example. It all just honestly feels like you are selecting which diecast car model to buy – It is quite an interesting experience. Volvo Car Malaysia’s website doesn’t quite give you the same feeling (of buying a diecast model), but the fact remains that you are able to see the stock availability of the car that you are interested in.
Buying experience aside, what this also means is that car prices will be standard and there will be no more such things as “Dealer discounts”. Fundamentally, what is changing is the fact that the stock of the cars available is owned by the manufacturer instead of the dealer.
With the traditional dealership model, you have car dealers buying the stock of cars and hence taking a business risk with them – the cars could either end up being sold or not. With the new model of some manufacturers (agency model), the stock is owned by the principal (i.e. Mercedes-Benz Malaysia), and the agent is paid a fee for their services. The agent does not take on any business risk like a dealer.
That is really what this all is about – A smoother experience for the consumer and a restructuring of the fundamental way that car sales are done. Volvo Car Malaysia was the first to launch its online car purchasing platform in Malaysia for its electric car. Mercedes-Benz Malaysia reportedly is the first to introduce the agency model in the SEA region.
Tesla will be launching in Malaysia soon and the company has always conducted its sales in this manner. There will also be the Smart electric car which, judging by its sales methods in other regions, will be available for purchase online in Malaysia too.
Even with all of these changes happening, it doesn’t omit the need for a physical showroom. Test drives still require physical presence and car ownership isn’t complete without experiencing how the brand presents itself (through its facilities). Car showrooms are also now often clumped together with the brand’s other services (maintenance, repairs, etc.).
We’ve gone from phoning taxis to just tapping a few buttons to get a ride quite easily. It shouldn’t be too difficult to change how we buy cars. After Mercedes-Benz, Tesla, Smart, and Volvo, many more shall follow.