Future of online car shopping

Nissan India recently announced a digital business model where customers can purchase their preferred Nissans online. Considering how retail buying has penetrated the web this sounds like a fantastic idea. Several other websites exist that conduct online automotive transactions. In fact, Nissan will use some of these online portals where they will place payment gateways to transact business rather than directly through their website, though the latter will also come up shortly. There is nothing new in this and several manufacturers already employ various transactional websites to help them generate leads. It is just the first time that a manufacturer has come out with a direct online sales point. In effect, you pay the entire amount for your Nissan online.

Yet a few questions arise:

1. Do you now need a dealer if you can buy a car online? The dealerships will continue to exist and do business like they always did. What the online model provides is a point of sale but deliveries will be handled at the dealer end. You will still walk into a showroom, get a box of sweets, flowers and there will be people around to clap and celebrate as you drive out of the showroom in your new car. Plus customers still need a touch point where they can get into a car, feel it, smell it and build their first impressions. This isn't going to happen online and the dealership still remains your sole point of contact with the car you want to purchase.

2. Can dealerships run a healthy business if the model is successful? As of now Nissan claims that the dealerships will still earn their margins. Post purchase your nearest dealer or you can even choose which dealer you would like to work with to process your paperwork and that counts as a sale and earnings for that dealer.

3. Is this a safe way to conduct business? I can understand the apprehensions most people might face with buying something as expensive as a car. This isn't a smartphone or a laptop or an LED television or even a paperback. A car is something that costs upwards of a couple of lakhs of rupees at the very least. Spending that kind of money online isn't yet perceived to be safe even though most banks and financial institutions offer state-of-the-art payment gateway facilities. People still find it more secure to carry wads of cash around on them as they go to put a down payment on a car. There is another fear most people have and that is if you transact online how do you make a down payment in black?

To me nonetheless this whole business is a very promising direction to head in. If you can buy garments, electronics, personal amenities and even food online why not your choice of wheels? E-commerce in the automotive industry is the future, it's a far more transparent model and there are no ill-informed sales people making tall claims just to make the sale. In addition this service puts forward all sorts of systematic processes in place. For instance you will be able to track your purchase online rather than rely on a dealer reassuring you your hot-selling car 'is on its way'. You won't have to pay a premium for a car that you and everyone else wants, simply make sure you have a fast broadband service provider with good and reliable connectivity!

2013 Nissan petrol

The disadvantage I see is that you won't be able to negotiate prices like you would in a dealership. This means other than the specified discounts offered at festivals or at certain times you obviously won't be able to haggle with your computer. Having said that, Nissan claims they are offering some discount schemes and adding freebies for the online buyer as well, so not to worry there is still some scope of getting better prices. There are however further bigger unseen challenges.

Firstly, can an e-commerce venture of this sort also empower a manufacturer to control opinion? Most of the transaction portals also provide editorial opinion. Can the content then be manipulated to bend opinion towards certain brands? It's a heavy thought because most online buyers find it easy to make a purchase if the review or a rating of that product is alongside the 'buy' button. While that sort of maneuvering can apply almost anywhere, it takes on a darker tone where the seller and reviewer are one and the same entity.

The second problem I see with models like these is that most commodities are purchased online through a credit card. Now most purchases online aren't very expensive, your highest spend may not have gone beyond a lakh of rupees. In several cases your credit card supports that expense, principally because you can afford to repay those amounts. But in a nation obsessed with EMIs, where almost every car is purchased on a loan, will a credit company's high interest rates encourage online purchasing? Or will you head back to the bank to avail a loan to pay off the financial institution? It's definitely a work in progress.

The whole initiative though boils down to convenience because isn't that what Nissan is selling at the end of the day? In this regard, Nissan is trying to build a network in the distant future that will not just accept your money but also ensure your car is delivered home to you. It is currently a work in progress but Nissan is ironing out the creases and putting systems in place that would make the operation as seamless as that at Flipkart or BookMyShow. This initiative may not entirely be foolproof at the moment and I worry there may be glitches but this initiative I sense will find lots of acceptance with a younger lot, an older generation will look at it with a lot of scepticism. Nissan is undoubtedly aiming at a wired age where all the information and opinion is available online. Yet somehow I can't help but feel Indians are not ready to let go of their dealerships just yet.