Volvo has announced plans to begin to offer cars for sale online through a website, similar to announcements from other car manufacturers. The option to purchase a vehicle online appears to be a logical step in the transition of internet sales as individuals can already build a vehicle online and then search for local car dealerships that stock the vehicle. This can be burdensome to buyers and add a layer of cost.
The difficulty and challenge in the success in this model comes from three major areas. Local regulations are prohibative against online sales of vehicles, which is a hurdle that Tesla faced in recent years when they tried to sell directly to consumers and cut out the middle man of auto dealerships. Auto dealerships contribute large amounts in political contributions to local politicians to keep these rules in vogue.
Secondly, many people will finance their vehicle purchases which will prove to be difficult to pull off when using an online purchase model. Finally, the valuation of vehicle trade-ins will often prove to be difficult to value in an online model. Many people may thus find it hard to finance a vehicle they buy online though a network of sellers will likely emerge during the years to meet this need.
Still, Volvo’s commitment to attempt online vehicle sales despite the hurdles faced is a potential attraction for car buyers like Zeca Oliveira and a way to generate additional revenues for Volvo as a result.