Emerging Technologies

Strategic Partnerships and Investments To Prop Up Automotive E-Tailing Business Globally

Massive use of the internet and smartphone and the launching of new networks such as 5G has transformed into the growing popularity of online shopping activities. Moreover, automotive and automotive part manufacturers are trying to establish their online presence and boost their sales through the online promotion of their products. There is a huge investment in e-commerce tools for building a strong and upgraded online infrastructure for promoting products online. This has enabled the automakers in increasing their online product offerings, thereby enlarging the scope of their business. Moreover, the control over the online channels will help the automakers in pushing online services and new product offerings in the automotive sector. This, in turn, will help the target audience and viewers know about the automotive brands and their product offerings. It will also increase transparency about the performance of the brands at the dealer level, thereby enabling the automotive and automotive part manufacturers in improving their sales network and product distribution channels. As per the report published by Allied Market Research, the global automotive e-tailing market is projected to garner lucrative earnings in the coming years. 

Investments in e-commerce tools and online promotion of new kinds of vehicles including electric and hybrid vehicles have contributed massively towards sales of cars and motorbikes and vehicle components across the globe. Moreover, allocation of key resources, strong digital infrastructure, robust online security algorithms, use of AI and machine learning tools, customer churn analysis, and customer data analytics has compelled players in the global automotive e-tailing industry to enter collaborations and alliances with other players from the same or other industry. Furthermore, market players are signing agreements and partnerships for expanding their business portfolios across the globe. The need for increasing online presence and gaining a competitive advantage over business rivals has become a trending concept across the global automotive industry. Hence, players in the automotive industry are trying to advertise, promote, and sell their vehicles and vehicle components online to outwit their competitors and establish a strong position in the global automotive industry. In addition, industry players are acquiring new firms to expand their product lines and technology portfolios. Reportedly, the implementation of the aforementioned business strategies is projected to help industry players generate new revenue streams along with promoting product innovations. With every player in the global automotive industry trying to enhance its online presence, the global automotive e-tailing market is predicted to witness exponential growth in the coming years.  Let us discuss some of the strategies adopted by market players to spearhead their business along with the ongoing trends witnessed in the global automotive e-tailing market. 

With the surge in e-commerce activities and the rise in online car sales, the automotive e-tailing industry has gained traction in recent years. There is a growing trend of online sales among consumers as they conduct online research related to the pricing and features of vehicle brands. Moreover, online sales of vehicles and their components are easily financed by banks and huge discounts are provided, thereby driving demand for automotive e-tailing across the globe. Moreover, automotive e-tailing has also benefitted sellers with the latter gaining the opportunity of gathering customer data related to brand preference, location, and buying trends. The insights into customer data have helped automakers and sellers in boosting digital marketing and determining the sales forecast of vehicles. The outbreak of COVID-19 boosted online sales of vehicles and has contributed notably to the global automotive e-tailing industry in recent years. 

Furthermore, a large number of dealers are creating standalone brands by launching new online vehicle sales to target new customers and explore the untapped potential of the automotive industry. Online automotive sale has become a buzzword with the rising sale of premium cars in online mode. An increase in online reviews of an automotive brand as well as its components before making a purchase has generated lucrative growth avenues for the automotive e-tailing business across the globe. Furthermore, online ordering of vehicles and vehicle parts across the globe is increasing due to a massive trend among the targeted audience to compare a vehicle brand with others in the same product line through the digital ecosystem. Moreover, Volkswagen, a German motor vehicle manufacturer, launched online leasing of new vehicles for customers in Germany. For the record, all-electric ID.5 and ID.4 vehicle models are predicted to be offered on an online lease initially. Furthermore, ID.3 will be the next vehicle model to be offered to customers on lease online after a few days. The new strategy of the firm is aimed at digitization of its sales and this move will prompt other giant automakers to follow the suit. Furthermore, the automotive giant will roll out these offerings in other European countries in the next few years. 

Launching of new e-commerce networks has proved to be a core activity witnessed in the automotive e-tailing industry globally. Moreover, these activities are gaining momentum across the automotive e-tailing market and have strongly influenced its growth. For instance, the Indian government is planning to create an open network for digital commerce to reduce the domination of e-commerce firms such as Walmart and Amazon in the Indian e-commerce market. Reportedly, the open network is predicted to exchange products and services over electronic networks. Moreover, the strategic move will expand the scope of growth of the automotive e-tailing market in India. 

Strategic partnerships between manufacturers and e-commerce firms are also predicted to play a major role in impacting the global automotive e-tailing industry. Moreover, it has helped the e-commerce firms in gathering huge data of customers, thereby helping the automotive manufacturers and sellers in identifying customer trends and their purchasing patterns. In addition, it has also assisted the manufacturers and dealers in understanding the buying behavior and purchasing capacity of customers. Recently, Amazon.com Inc., a giant e-commerce company, and Stellantis N.V., a major automotive manufacturer, signed a partnership deal for producing software and purchasing electric delivery vans from Stellantis. Moreover, the move will also help in the marketing of Stellantis N.V.’s automotive components and cars on the website of Amazon, thereby increasing its online reach to customers across the globe. Earlier, Fiat Automobiles S.p.A, an Italy-based automotive manufacturer, joined hands with Amazon for selling cars at discounts in Italy. Reportedly, automakers and vendors make use of Amazon products to sell their vehicles and vehicle parts online. 

Continuing with the trends of strategic partnerships, BMW AG, a German firm manufacturing motorcycles and luxury vehicles, signed a partnership deal with Amazon for Alexa. Moreover, the initiative is aimed at offering a seamless driving experience to the customers. Apart from this, automotive manufacturers have joined hands with Amazon to perform routine tasks such as monitoring fuel proportion and igniting vehicles from remote places. In addition, these manufacturers will also benefit from online sales and advertising of their vehicles and automotive components on Amazon. Reportedly, Continental AG, a Germany-based automotive component manufacturing firm, and Amazon, Inc. entered into a strategic collaboration for developing Continental Automotive Edge, a modular software and hardware tool connecting the vehicle to the cloud with help of Amazon Web Services. Furthermore, Continental AG will derive double benefit due to its association with Amazon. Firstly, the development of software and hardware tool and another one is the promotion and selling of its vehicle components on the Website of Amazon. The strategic move will help Continental AG accrue huge revenues through the online sale of its automotive components and also assist Amazon to expand across the global automotive market. 

Acquisitions are the strategies put into practice by key market players to expand their business across the globe. Amazon, Inc., an online retailer and eCommerce giant, entered an agreement for acquiring Zoox, Inc., an on-demand autonomous ride-sharing firm, for nearly $1.3 billion. The move of Amazon is intended for the creation of a network of autonomous taxis along with its use in package delivery. Moreover, Amazon also offers customers vehicle information on its website along with reviews of new as well as used cars. 

Securing investment has been a major strategy adopted by the industry players to expand their business reach across the globe. For instance, Spinny, a used car e-retailing tool in India, and operated by Valuedrive Technologies Private Limited raised funds worth $283 million from a Series E funding round from investors led by ADQ, Avenir Growth, and Tiger Global. The strategic move is targeted at improving the online car buying and selling experience of the customers and is based on a customer-centric approach.  Moreover, Cars24, an online tool and marketplace for used cars, raised nearly $400 million as a part of its Series G funding round, It included nearly $300 million raised through equity shares and $100 million raised through debt from various financial institutions such as banks. The initiative is aimed at building new products and technologies along with enhancing the online buying experience of the consumers. 

As per the survey of the Indian Automotive Consumer Canvass 2021, online tools have evolved as the most preferred marketplace for purchasing vehicles. Furthermore, more than 60% of respondents demonstrated their willingness to purchase automobiles online. Moreover, the survey depicted the changing vehicle buying behavior among the consumers along with their changing perceptions post COVID-19 pandemic.  

Players in the global automotive e-tailing market are adopting new business strategies to expand their global presence along with increasing their customer base. A large online presence is predicted to help these players in reinforcing their position in the business and garner huge revenues. These business strategies will also help the automotive e-tailing industry flourish in the years to come. 


Dhananjay Punekar

Sr. Specialist Content Writer

Allied Market Research

Dhananjay Punekar is writer, avid reader & book lover, and interested in watching sports. He holds post graduate degree in management and is working as a Sr. Specialist Content Writer at Allied Market Research. 

Published in Telematics Wire

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