Hyundai boss: car sales on the cusp of a revolution

Jan 20th

The way cars are bought and sold is on the cusp of a dramatic change, according to Hyundai UK boss Tony Whitehorn.

Predicting the rise of internet sales, home deliveries, more, better-targeted finance options and the end of haggling, Whitehorn said the established methods of car purchasing and selling “had to change” and that “buying a car from your living room must become a reality because it is what customers want”.

However, Whitehorn stopped short of predicting the end of the traditional dealership. He said “they will always be our shop front and the venues that represent our image and standards to the public” and predicted that “a large number of buyers will always want interaction with a human being and the reassurance of having a physical place to go is something goes wrong”.

Read Autocar’s review of the new Hyundai i20

However, Whitehorn said the growth of internet sales and marketing was inevitable, based on the evidence of the Hyundai Rockar dealerships in Bluewater and Westfield shopping centres. These dealerships sit alongside traditional shops and offer test drives and servicing but also allow the customer to order their car online with a no-haggle policy.

“Rockar is teaching us so much about how customers shop on the internet – and from the trends, we can see and understand the big changes that are coming,” said Whitehorn.

Whitehorn revealed the Bluewater dealership sold more than 700 cars last year, with the average age of a customer being 39, compared with an industry average of 51. He also revealed that 56% of buyers were female, again far higher than the industry average. Of those who placed an order over the internet, 51% bought their car between 7pm and 10pm.

“Those figures are transformational,” said Whitehorn. “We are on a journey, but what it tells us is that we are opening up new ways of selling cars, and as an industry, no matter how strong the allure of sticking to old, successful principles, we can’t resist that.”

While Rockar stores are allowed to discount stock, they do not offer the opportunity to haggle. In addition, staff are paid a flat salary rather than being incentivised to make sales.

“Again, these things are the start of a wider trend,” said Whitehorn. “If someone is paid to help rather than sell, the customer experience is that much better. Transparent pricing goes hand in hand with that. Internet sales will only work if we have one price and stick to it, and while that may take years to achieve, it is inevitable if we want a sustainable business.”

Whitehorn also predicted the rise of concierge buying services, where customers buy a car and have it delivered and maintained without ever visiting a dealership, saying that it is only FCA rules around signing financial documents in approved places such as dealerships that are currently holding the initiatives back. He also believes dealerships will eventually have to offer weekend servicing, as Rockar does, so that the car ownership experience fits better with modern lifestyles.

“When customers are demanding change, it is not a case of if it will happen, but when,” said Whitehorn. “Rockar is actually a halfway house to a new extreme, where you can buy a car from your home – and it is clear that is what a significant amount of buyers want to be able to do.”

Finally, with around 70% of Hyundai’s retail sales now on PCP,  Whitehorn is predicting the proportion will increase as customers and retailers better understand how to balance deposits and monthly payments.

Although most PCP deals are for three or four years, Whitehorn said the average point people swap to a new car is at 21 months, something that he sees as critical for driving new car registrations and allowing car makers to better predict demand and manage stock.

“Our industry needs to be more open-minded and more flexible in its approach than ever before,” said Whitehorn. “There are huge opportunities out there and the traditional models of selling cars don’t always cater for them.”

This review is about hyundai boss: car sales on the cusp of a revolution, read autocar's review of the new hyundai i.

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