Thursday, August 22

Tesla will close the showroom, only sell cars over the network

The CEO Elon Musk described the return policy after 7 days and the process of buying the car “only takes a minute.”

Since participating in the market, Tesla Motors goes against nearly every usual business standard of the automotive industry. Now, the new strategy of the Executive Director reveals one of the biggest challenges that the American car carrier has to face: to convince mainstream customers to buy cars over the network, in the right way they still buy books or clothing , according to The Wall Street Journal.

With the new strategy, Tesla will only sell cars over the network. The airline needs savings from the closure of shops, showroom to help discount model sedan Model 3. The price of only 35,000 USD of this product still helps Tesla collect profits. Meanwhile, the first two products were Model S which cost from 75,000 USD and Model X to 97,000 USD.

“In the year 2019, people just want to buy items on the net,” Musk replied to reporters when the announcement of the change on 28/2. The customer attraction is a 7-day return policy and the purchase process takes only one minute to complete.

Only a small fraction of U.S. car sales come from the Internet, while Tesla strives to reach the new mainstream customer segment and increase the Model 3 sales. This is like a test, whether customers are willing to make one of the biggest trades in their lives without a test drive, nor Showrom.

The Tesla brand has the advantage of being impressed with some tech savvy customers. Musk can gain good feelings from a number of car buyers who do not like the traditional buying style with unpredictable gimmicks as well as the bargain-filled process.

The current distribution type of Tesla-uses the private and Internet store system-like a heresy type. In the U.S., nearly all new vehicles are sold through third parties, franchising agents, as well as under state law. Tesla has found a way to do so in many states by the airline which has never been a franchise agent.

Car carriers have long since wanted a simpler and more direct sales process. General Motors (GM)-America’s largest car carrier-introduced online purchase page in 2013 as Shop Click Drive, which allows customers to handle most of the process of buying a car over a network, such as payment norms and estimates if the old car buy a new car. The tool leads users to the website of local dealers, and only a handful of vehicle buyers use that tool, according to GM.

However, customers usually end up “Transverse” by calling or directly to the dealer while trading online, Brad Sowers, President Jim Butler Auto Group, the unit owns a number of agents in St. Louis (Missouri State). “Buying a car still needs a few direct support “, Sowers commented.

The largest automobile dealer group in the United States, AutoNation Inc., experimented with a digital store called AutoNation Express for several years, but said it was difficult to complete a transaction entirely on the net because the States required the signing of papers very differently.

In addition, old car sales estimated to be less than 1% of 39.5 million old cars sold in 2018, according to Cox Automotive. There is not much data to know how many new cars are sold on the net or how many car resellers over the network.

Scott Painter, a veteran merchant in the automotive industry, says the trials of the cars are increasingly less important than before. The Startup of Painter, Fair Financial Corp., buys vehicles from dealers and then primarily rents them through applications at monthly expense. Painter sees that customers are often comfortable using the service without running a test for high-class models.

Tesla’s customers do not seem to like driving trials before buying, according to Strategic Vision’s survey. Data from the previous two years showed that 66% of Tesla car buyers have a test run before checkout, compared to the 82% of the industry.

He said that 78% of Model 3 orders were placed over the network. Previously, simple transactions over the internet for large-size sedan models S and SUV models X were less than that.

Tesla also aims to increase sales real fast. Musk says that Tesla can make the most of 600,000 cars this year after having delivered the 245,000 car in 2018 and nearly 103,000 cars in 2017. It refuses to comment when asked.

A few weeks ago, Tesla was still promoted to the opening of new stores, hence the information on the sale of goods only over the network was very sudden. On the Tesla website lists about 130 shops and car displays in the US, where anyone can see the car but cannot afford it due to local laws. The airline said a small amount of stores were still open in crowded places where customers could know about vehicle models, but would buy them directly online.

Over the next few weeks, Tesla will evaluate every sales area as well as marketing units in terms of efficiency and how to support online sales. The airline has said that owning its own stores helps them to better control the customer experience. But the lack of franchise system makes Tesla have difficulty in the service, which leads to some customers waiting for a long time. Musk also promises to increase personnel for the service, despite closing the shop.