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Tesla's Direct Sales Model Proves Dealerships Are Obsolete

by Ma. Claribelle Deveza March 31, 2020

Tesla-direct-sales-online-vs-car-dealerships

Tesla’s direct sales model may have proven that the way dealerships do business is obsolete during the current C19 outbreak. The pandemic has forced people to rethink certain aspects of society. For instance, people have wondered what can be considered essential and also the importance of digitization. Car dealerships may be starting to realize the significance of the latter. 

A joint study conducted by Erickson Research and MAX Digital revealed that more than 540 dealerships in the United States recognized the need to digitize the sales process by late 2019. Based on the study, digitization seems to be the best way for car dealers to keep up with automakers who adopt a direct sales model like Tesla.

Tesla has had to fight hard to sell directly to its customers since its inception, especially in the United States. The EV automaker has been excluded from car shows and events simply because it wouldn’t sell vehicles through car dealerships. 

But then the world was hit with a pandemic. Self-isolation and social distancing are the main ways to prevent spreading the virus and infection. Before the pandemic, not many people thought about the role human touch and contact played in society. Now, the world knows the significance of physical interaction and its pitfalls when it comes to business transactions as well. 

Since car dealerships aren’t considered essential businesses, the majority of them have had to close up shop until the end of the pandemic. People interested in purchasing a car will have to wait until car dealerships reopen. 

Tesla, on the other hand, has continued to get orders, specifically for its new Model Y. Tesla’s online ordering process is still operational. Customers don’t have to wait to order their vehicles. They can even make the initial down payments on their new Tesla online. All they have to wait for is the vehicle itself. Once Tesla’s facilities are green lit to produce vehicles again, deliveries are likely to ramp. 

Besides accepting orders, Tesla has also found a way to continue test drives and handovers. In China, Tesla showrooms adopted measures that allowed interested customers to test drive the MIC Model 3 Standard Range Plus without human contact.

Chinese customers simply made an appointment, and Tesla would prepare the test drive vehicle beforehand. When the potential buyer arrived, he/she would take the Tesla out for a spin alone and return it later. The whole transaction would happen without physical contact. 

Meanwhile, in the United States, Tesla has continued to deliver Model Y vehicles throughout the nation. Model Y delivery started at the beginning of March, right when the virus began spreading in the country, but handovers have not stopped. Similar to Tesla China, the US branch has adopted measures to keep customers and employees safe during Model Y handovers, starting with its home deliveries.

Featured Image Credit: Mediamodifier/Pixabay




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