Cars

Car sales start on the online road

By Lian Mo (China Daily)
Updated: 2010-08-14 10:19

More and more people in China are using the Internet to buy cars. Jean Francois Frey / for China Daily

BEIJING - Jin Dong, a 25-year-old marketing executive, has just taken delivery of his new car - without stepping into a dealership.

Instead, Jin bought his 120,000 yuan ($17,720) Focus hatchback, made by Ford Motor Co's joint venture with Changan Motor Corp, through the Internet.

"I prefer online shopping. It saved both time and energy," said Jin, who ordered the car on one of China's many automotive websites, cheshi.com.

"I didn't even have to pay a deposit, just the full price when I took delivery five days later."

While Jin did not pay online, he did receive a gift pack of accessories with the car.

Jin is among a rising group in China who are using the Internet to buy cars, either through websites such as cheshi.com or direct from manufacturers.

Most deals through automotive websites don't ask for deposits, although some manufacturers are now beginning to do so.

FAW, one of China's largest auto manufacturers, has recently started asking for deposits from online buyers. A 2,000 yuan deposit, for example, will be needed to order a Mazda6.

Geely, China's largest privately owned automaker, announced in June that it will start selling its cars online next year through Alibaba.com, an e-commerce platform, with payments made through Alibaba's Alipay, the country's largest online payment company.

Liu Jinliang, Geely's vice-chairman, said work to set up the system is going well and Geely's target will be to sell 1,000 cars in the first month.

"Geely will offer special models for online buyers, which consumers would not be able to get from franchised stores," he said.

Hu Jun, Geely's online marketing executive, said the company has been researching the online market for several years.

"However, considering government regulations on e-commerce, privacy and safety concerns, we may start with partial payment online."

Geely is not the only manufacturer in China seeking an online market.

"Some manufacturers are willing to give some discounts or additional benefits to customers who place orders online," said Wang Chen, a marketing executive of cheshi.com.

"After the order online, customers could just go to the franchised store to make the payment and collect the car."

Bitauto.com, one of China's largest automobile websites, said it gets about 50,000 "positive" inquiries from online buyers every month. Sina.com, another highly popular Chinese portal, started its online "auto franchised stores" last year, with some of its operators requiring deposits.

Su Yunong, chief editor of sina.com's auto channel, said: "People are willing to buy laptops online which cost up to 20,000 yuan each, so they should have no problems in paying for cars online.

"But manufacturers often build online stores or offer online discounts just to promote their products as most people check the Internet before buying cars." He said online sales should theoretically reduce car prices, but this may not happen for several years.

Websites have also adopted 3-D modeling and offer virtual stores, and many receive more than 10,000 visits a day.

French consulting company, Capgemini, said that in a survey of eight countries including China, almost 40 percent of more than 3,000 respondents said they would buy a car online.

More than 9 million cars were sold in China in the first half of this year. Last year, about 13.6 million were sold in China, the China Association of Automobile Manufacturers said.

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E-commerce turnover in China in the first half of this year reached 2.25 trillion yuan and more than 10 percent was from personal online shopping, Iresearch, a consultant company specializing in the online market, said.

Iresearch's findings also show that more than 100 million Chinese have shopped online.

But Zhang Yanping, a senior Iresearch e-commerce analyst, said buying a car online completely will not be widely accepted over the next three to five years.

Most automobile websites work as information providers and making payments at retail stores is still necessary, she said.

"E-commerce in China is not mature enough to have high ticket transactions such as car purchases," Zhang said.