On Monday, 4th June 1897, at 4pm, the first horseless carriage in South Africa made its debut in Brea Park, launching a love affair with motor vehicles that would endure for ages…or did it?
The 1940s saw the era of the “people’s wagon”, pioneered by Henry Ford and Dr Ferdinand Porsche, who focused on affordability and simplicity – making the motor vehicle accessible to everyone. As customers became more affluent in the 1950s and 1960s, and cars became more accessible, the focus shifted to promoting cars as status symbols. Bigger was better, and cars were given tail fins like jet fighters (and they burnt the same amount of fuel!) The 1980s saw Japanese upstarts Nissan, Honda, Mazda and Toyota undercut the European and America market – it was also the era that saw factories being exported offshore. The continued globalization of the 1990s saw greater cooperation as manufacturers began running plants together, and sharing designs. Today the industry offers greater variety in terms of price, design and technology than ever before.
However, there has been a significant shift in how consumers view cars. In the United States, drivers’ license ownership has dropped by close to 20% over the last ten years – millennials simply do not feel the need to own a car the way their parents did. Car-sharing, environmental consciousness about carbon footprints and alternatives has meant that cars are no longer the status symbol that they were twenty or fifty years ago.
“The trend is not as predominant in South Africa, where cars are still aspirational items, but it’s a growing concern in Europe and the United States. Young adults prefer urban living and they socialize online. Public transport and ride-sharing apps have enabled them to make do without a car,” says Nunben Dixon, Head of Gumtree Automotive. “That does not mean that South African dealerships won’t be affected. The primary reason for the decline proffered by Gen Y-ers and millennials in these studies was that they hate the traditional car-buying process.”
By 2025, Gen Y will make up 75% of all potential car buyers, and it is well worth influencing them now, says Dixon. “While Gen Y is perhaps more disinterested in car makes and models and more inclined to see them as a way to get from point A to point B, it doesn’t mean that they will never buy a car. As you mature, and your family expands, a car is a great convenience. The question is, Will they buy the car from you?”
Dixon says that changing customer expectations could well be at the core of Gen Y’s viewpoint. “They aren’t just comparing your dealership with your competitors – they are comparing the buying experience with all other buying experience. There are apps that can recommend products based on your past preferences and browsing history that allow you to pay and have products delivered to your door with a click. Younger consumers are comparing their experience in the Apple Store, their local restaurant and their favourite ecommerce website with your dealership and it has to live up to their expectations.
Dixon says that while it’s not necessary for each dealership to invest millions in apps, they have to live up to expectations. “Buyers that are growing up with Twitter and online shopping expect immediacy of responses and service. They want information. If they can’t find you and your stock with the click of a button, they will simply move on to a competitor. They will not visit a dealership and to see what’s in stock and they will not be prepared to listen to a salesperson haggling for twenty minutes,” says Dixon.
“They don’t like haggling, prefer a low-pressure experience and they especially don’t like any surprises in terms of costs.”
Dealerships must move to an online model, use rich video features and offer the details that these new clients will about.
“We have to be in touch with the ways these clients like to shop and how they think,” says Dixon. “Gumtree already provides many of the features they like to use – dealerships should deploy them.”