Weekly energy recap: Dec. 25, 2020

Weekly energy recap: Dec. 25, 2020

RIYADH: Like most sectors in the Kingdom, the car-buying experience in Saudi Arabia is evolving with the times and the coronavirus pandemic has fueled consumers’ demand for online purchases.

In its latest 2020 report, global research consultancy firm Gartner predicted that by 2025 the automotive retail landscape will be disrupted, with 20 percent of all new cars sold entirely online.

“The COVID-19 pandemic has accelerated the sales of cars online and convinced a growing number of customers to avoid showrooms for future purchases,” said Pedro Pacheco, senior research director at Gartner.

Less than 1 percent of new cars are currently sold online, but an increasing number of automakers are implementing online platforms to fully transact the sale of a vehicle from ordering to finance, purchase and home delivery.

Mazin Ghazi Jameel, managing director of Toyota Marketing Operations at Abdul Latif Jameel Motors in Riyadh, told Arab News: “The car-buying experience in Saudi Arabia in the future will be significantly different from what we see today. The process of buying a car will increasingly move online, and car dealerships will evolve into experience centers.”

He added: “Even today, a large part of the car-buying journey is spent online — in doing research to fully understand the capabilities of the car. This is followed by test drives at the showroom.”

In the future, advancements in technology-driven solutions such as augmented and virtual reality will replace the need to visit the dealership, and give customers the option to not only closely experience the car at their convenience, but also to choose finance and insurance schemes, he said.

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“At Abdul Latif Jameel Motors, we’re committed to continuous sector innovation of new-age solutions to streamline digital transformation and keep our customers on the cutting edge of emerging automotive technologies,” he added.

“To connect with customers before scheduled showroom visits, we launched the Toyota Saudi Select app in 2018, which allows users to interact with all Toyota car models through an augmented reality interface to view car interiors and exteriors.”

Gartner’s latest report for this year also highlighted that the increased digitization of the automotive sector will see payments made through a vehicle total $1 billion by 2023, up from less than $100 million in 2020.

“Car drivers can currently make in-vehicle payments by using applications such as Alexa, Xevo Market or the Banma platform to purchase fuel, food, or pay for parking,” said Mike Ramsey, research vice president at Gartner.

“The types of services available will continue to increase as automakers, merchant brands and services, and software suppliers’ partnerships proliferate.”

In addition to making in-vehicle payments through a cloud platform that connects to the car, drivers will be able to use a third-party app mirrored on the screen from their phones or through a smart wallet based on blockchain, which lets drivers earn cryptocurrency that can be used for in-car purchases, or through a digital wallet built into the car. The latter could create the capability of a vehicle to not only make payments but accept them.

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“The car would have a unique ID and function almost like a credit card with the ability to make transactions,” Ramsey said.

Jameel said: “For the large-scale and successful implementation of in-car purchase facilities in Saudi Arabia, automakers will need to work closely with technology providers and software developers to ensure competitive infrastructure, digital capability and product compatibility with the cars manufactured.”

He added: “All of this requires meticulous and long-term planning. However, this reality isn’t too far away for the automotive sector in Saudi Arabia. Under its visionary leadership, the Kingdom is achieving great strides in tech advancements and breakthroughs, especially with the arrival of 5G.”

Adam Whitnall, co-founder and CEO of Drive Ninja, a Dubai-based car website, said: “In terms of connected cars and the ability to purchase through your car — yes, more and more manufacturers are integrating internet connectivity into their cars.”

He added: “The first stages of this are where brands are giving consumers the ability to unlock certain services related to their car by paying a subscription, combined with the ability for a driver to mirror their phone display on the car’s screen. These two features will continue to evolve and merge until we get to the point where you have seamless connectivity between your payments, phone and car.”

Whitnall also highlighted the trend toward online purchases, saying: “Most of the major car dealerships in the region now offer the ability for customers to perform at least some part of the buying process online — from simply placing a deposit to secure a car, all the way through to complete purchase with home delivery.”

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Motor company INFINITI Middle East has also embraced the digital era by launching the “showroom of the future” — the INFINITI Configurator.

Available in 11 markets including Saudi Arabia, the UAE, Kuwait, Oman and Lebanon, the virtual experience brings the dealership to car buyers, using high-quality, realistic visualization and customization content.

Through the interactive configuration panel, customers can explore and modify six INFINITI models at the touch of a button before requesting a quote, booking a test drive, or sharing a personalized configuration with anyone to view.

“Automotive brands are facing the priority of joining the physical world with the digital one. INFINITI has now taken another step to allow customers to connect with our brand anytime and anywhere,” said Markus Leithe, managing director of INFINITI Middle East.

“As a forward-thinking region, we are proud that the Middle East is the driver and testing ground of the INFINITI Configurator, and look forward to connecting with our customers on new levels.”

As cars become more digital, the possibilities could be limitless. German carmaker BMW announced in July 2020 that all cars equipped with its newest Operating System 7 software will soon receive an update that makes it possible for the company to tinker with all kinds of functions in the car, like access to heated seats and driving-assist features such as automatic high beams or adaptive cruise control.

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