Hyundai dealers set to offer online sales

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It's kind of funny that in 2018 you can buy clothes or even a bed online, but for the most part you can't get a car.

That's slowly changing, with Hyundai Auto Canada claiming to be the first mass-market manufacturer enabling its dealers to conduct full sales online.

Hyundai will begin offering the basic service through dealers this spring, with additional features being added throughout the year. Ultimately, customers will be able to preorder cars, put down deposits, build-and-price online, get a trade-in quote on their current vehicle, schedule a test drive and fill out credit paperwork. The final price will be displayed in their shopping cart.

Dealers will also be able to communicate with customers and customize offers with their own incentives and promotions.

Industry watchers believe car makers in many countries are now in an experimentation period with e-commerce. While many are likely to adopt online sales, they're also likely to find that a good portion of buyers will still prefer the traditional dealership model.

"Online grocery sellers have been around for 15 years and we still see grocery stores," said Brian Murphy, vice-president of research and editorial at Canadian Black Book, in an interview. "It doesn't mean this is the solution for every consumer."

Hyundai says the system will provide buyers with more information about the process and save time by allowing them to complete almost all of the necessary paperwork without having to spend hours in a dealership.

The only thing they will still have to do in person is sign the paperwork and pick up the keys.

In moving toward online sales, the South Korean manufacturer is taking a cue from Genesis Motors, the luxury brand it launched in Canada just over a year ago.

As a new brand without established dealers, the company opted to go for the direct-to-customer model.

Since November, 2016, Genesis has been allowing customers to build-and-price vehicles online, apply for credit and fill out paperwork. They can also schedule a test drive, in which case a Genesis employee arrives at the potential buyer's home or place of business with the car.

Would-be buyers can then drive around their own neighbourhood, rather than on streets that might be unfamiliar to them.

"We literally come to you," said Michael Ricciuto, brand director for Genesis Motors Canada, in an interview. "It's kind of like what Uber did with the taxi industry. They didn't really change the product they were selling, they just changed the way you deliver that product."

Genesis does have dealers, although it calls them "agents" because they use the same online portal to process sales that their customers do. Car prices – and the agents' commissions – are fixed, so there's no haggling. Genesis also controls vehicle inventory.

Some auto makers' dealers have opposed the online model as an effort by manufacturers to cut them out of the loop, but Genesis says it has seen robust buy-in. Of the 18 dealers the system was offered to when it launched, 17 joined in.

"Every good dealer knows this is the future," Ricciuto said.

Genesis is now expanding the model to other countries after testing it first in Canada, he added. Australia is about to launch the same system, while China is planning something similar.

Other car makers are offering some mix of online features through their websites, but Hyundai and Genesis believe they've gone furthest among the major players. Tesla Motors, a smaller manufacturer, is also offering direct-to-consumer sales to Canadians.

Canada can actually be seen as being further ahead than the United States, where laws in a number of states prohibit direct sales. Texas, Arizona, Utah and a number of others have disputed Tesla's ability to sell online, insisting that vehicle transactions must be done by independent dealerships.

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