Online Car Sales Soar Amid COVID-19... Expansion Not So Easy

[Asia Economy Reporter Kiho Sung] Since the outbreak of the novel coronavirus disease (COVID-19), the 'contactless (untact) channel' has been gaining attention in the automobile sales market. As related sales performance has grown rapidly compared to before COVID-19, demand for online sales is increasing domestically, but there is a challenge to overcome the barrier posed by the sales labor union.

According to Renault Samsung Motors on the 17th, the number of online subscriptions for the compact sport utility vehicle (SUV) XM3 reached about 2,000 units by April. This accounts for 16.8% of the total sales of 11,914 units. In particular, the online sales ratio even jumped to 24% in February, when the COVID-19 situation was severe in Korea.

The XM3, launched in February, had about 24% of online subscriptions during the pre-order period. A Renault Samsung official explained, "During the pre-order period, it was difficult to see the car in person, so online subscriptions accounted for a relatively high proportion," adding, "However, due to the impact of COVID-19, online subscriptions have continued steadily even after the official sales began." Renault Samsung Motors introduced the online subscription system for the first time in the domestic industry when it launched the QM6 in September 2016. However, before COVID-19, online subscriptions accounted for only about 1% of total sales.

SsangYong Motor is also seeing an increase in untact sales through TV home shopping. On the 3rd, the 'Respect Korando and Tivoli' models sold through CJ O Shopping, a TV home shopping channel, received 2,576 consultation reservations during the broadcast. This is a significant increase compared to the 1,813 consultation reservations received during the Korando sales broadcast in December last year, before COVID-19.

A CJ O Shopping official explained, "In the case of the vehicles introduced this time, customer inquiries were higher than expected due to the improved product appeal with the release of the Respect models," adding, "We also believe that the spread of 'untact purchasing' throughout society due to COVID-19 has had an influence."

A SsangYong Motor official said, "Sales processes are currently underway centered on consultation customers," and added, "Looking at last year's cases, many consultations led to actual purchases, so we have high expectations this time as well."

In the imported car industry, Audi Korea has officially introduced a 'contactless video consultation service' from this month, allowing customers to purchase and consult on vehicles without visiting showrooms. Consumers can apply through the Audi Korea website, after which a sales advisor contacts them to discuss detailed schedules for the video consultation. The video consultation is then conducted via Kakao FaceTalk at the agreed time. Additionally, key notifications such as reservation confirmation, one day before, and consultation completion are provided at each stage of the video consultation reservation.

However, there are still many hurdles to overcome before full-fledged online automobile sales can be realized. This is because the automobile sales labor union strongly opposes it. The sales union is concerned that if vehicle sales through TV home shopping or online channels become active, job losses will occur. Hyundai Motor Company currently conducts online sales only in overseas markets such as the United States and India.

An industry insider said, "In Korea, considering the opposition from the sales labor union, after receiving online subscriptions, actual contracts are made through dealerships or in the form of events, so only rudimentary sales are taking place," adding, "However, since 'contactless sales' are rapidly spreading, I believe online sales will become active in the automobile sector as well."

This content was produced with the assistance of AI translation services.