Future of auto retail is online, but showrooms to stay, Hyundai Canada CEO says

TORONTO—The head of Hyundai Canada says the future of car buying is online, up to a point.

President and CEO Don Romano says the company, which launched its Genesis line of higher-end cars as an online only option in 2016, learned that many buyers still want to walk through a showroom.

Romano says the company, which also introduced fixed prices with the Genesis line to eliminate haggling, has since partnered with agents who are building physical showrooms to appeal to those who want to browse in person.

“We learned that it cannot be 100% online,” said Romano, speaking Thursday at the Elevate tech conference in Toronto.

“There are still a lot of people out there that that’s not what they want to do. They want to walk in to a showroom, but they don’t want the hassle, they don’t want the headache.”

Potential Genesis buyers will be able to go into a dealership, but they will still be buying the vehicles directly from the company and the agent will help walk them through the online ordering process in the showroom.

He said the overwhelming majority of car buyers hate the traditional process of buying a car, noting one survey that found only 17 out of 4,002 car shoppers liked the process.

Hyundai wants to shift the buying process for all its brands more online, but entrenched models make it difficult, Romano said.

“It’s difficult, because in this case, we have over 218 franchised dealers who have been doing it the same way as their father, their grandfather, maybe even their great grandfather over a hundred years, and that’s a difficult paradigm to shift.”

The company has made some inroads that still incorporate the dealerships. Last year, it launched a new online portal across that allows customers to build and price their model as well as get a firm quote on a trade-in value, go through an online credit application, and book a test drive.

Hyundai has been an early mover among major auto companies to shift shopping online, though Telsa Inc. has been selling vehicles online for years and others are moving more into the space.

Several automakers are testing online sales, especially in Europe. Volkswagen announced last year that it would launch a new digitized sales platform in 2020 that would “massively” expand online sales and allow for direct sales.

In the U.S., Telsa has encountered resistance with the direct sales model in several states that either already had, or have introduced, laws that require customers buy new vehicles through a dealership.