By: Saad Abdullah, Brand Director Lexus Al Futtaim
Last month, many of us around the world reflected on ‘one year of lockdown’. While the lockdown we experienced in the UAE was much less than others thanks to the proactive action of the government, it marked a good time to reflect on what consumers will look like in a post COVID-19 era and how brands can cater to their evolving needs.
Like many others, the automotive industry has been affected by the pandemic including supply chain, production output and sales performances. GCC new car sales saw a sharp drop in 2020 but is on the road to recovery – over the last few months the automotive industry has shown tremendous resilience. Al-Futtaim Lexus sales grew 14% in February and market share is up by 2% from 18% in January to 20% in February. However, numerous risks remain, and forecasts show that sales in Europe and the US will not rebound to pre-COVID levels until 2023 at the earliest. Meanwhile, China’s rebound continues to accelerate, with the potential to approach 30 million new vehicles sold by 2025. So, what can auto brands do?
Research shows that consumers would be more likely to start buying cars if they could do it online, with at-home test drives and vehicle delivery presented as alternatives to going to dealers. With less consumers visiting showrooms physically, digital and innovation will no longer be a nice-to-have, rather be a main part of to the customer journey. Some research has shown that around half of consumers would be willing to pay extra to be able to conduct the buying process online. Digital platforms are gaining more traction from buyers during the pandemic, with OEMS and dealers launching online retail and support services to simplify car purchases. Using digital marketing campaigns to promote promotions and deals will likely be an essential strategy for automakers that want to reach interested shoppers
It’s not just the buying journey that can be enhanced by digital, but the transaction also. With the rise in contactless services as well as a boom in e-commerce, new business models are likely to emerge as more companies evolve, and further development in this space will have a huge impact in the automotive sector in the region.
With the pandemic causing concerns for consumers in terms of financial strain, customers will be looking for the best value and our retail offering may look very different. Car shoppers are now looking for deals more than ever, and many automakers are responding by offering favourable terms and offering value in the form of activations such as seasonal offers, year-end discounts, extended warranties, and cash backs. We must maximize opportunities to be more proactive and nimbler, as well as able to anticipate customer expectations and needs.
In a time of global uncertainty, it’s easy to lose sight of the big picture. What’s needed most now is focus and brands must double down on what makes them unique. For Al-Futtaim Lexus, this comes in the form of ‘Omotenashi’ or customer experience of the highest quality, which has had a strong influence on the Lexus brand from the beginning and can be seen in every aspect of our business. It will continue to play an important role as we find ways to get even closer to our customers.
It’s safe to say it will be no mean feat for this year to be better than last and when this passes, which it will, brands should have a clear view of where they want to be. From an Al-Futtaim Lexus perspective, we have lots to look forward to in 2021, including new models, brand partnerships and showroom activations. We will continue our passion for brave design, imaginative technology, and exhilarating performance to enable us to create amazing experiences for our customers.