Automakers Turn to Virtual Reality to Boost Sales
As auto manufacturers aim to keep sales ahead of 2015’s record pace they are doing everything they can to pull in buyers and virtual reality may be their next big step in this regard.
Audi is planning to unveil Oculus Rift headsets in a number of dealerships by the end of this year and Johan de Nysschen, president of Cadillac recently encouraged some of the company’s lowest-volume outlets to go the virtual reality route.
With dealers all over the place already experimenting with virtual reality, automakers see double benefits of this technology. One is to enhance the consumer experience and secondly they get to shave off some of the $2.75 billion US dealers spend annually on interest to keep new vehicles on their lots.
“You’re wearing the glasses and you really think you’re in the car,” said Marcus Kuehne, Audi’s virtual-reality project lead. The brand already allows customers to pre-equip cars in a handful of highly digitized urban dealerships and sees virtual reality as the next step in letting shoppers see what they want to buy. “You get a good feeling for the size — do the rims fit to the body of the car, do the colors inside the car fit well together?” he said. “You can judge this much better through this technology than on a screen.”
With consumers now able to manipulate models, color schemes and other features in a virtual environment, automaker can now distinguish themselves in a growing and profitable market. The sales for April will show profits for most of the biggest US and Japanese automakers as the annualized selling rate rises to 17.5 million according to a Bloomberg survey.
“Top-line performance of the industry remains robust — retail demand is strong, transaction prices are at record levels and consumers will spend more on new vehicles than in any other April on record,” John Humphrey, senior vice president of the global automotive practice at J.D. Power, said in a statement. “The slowing rate of growth, shift in consumer demand away from cars and toward SUVs and elevated fleet volumes pose significant challenges to manufacturers as they compete in the marketplace.”
General Motors Expect Increase
General Motors anticipate an industry wide sales increase of 5 percent and a seasonally adjusted annualized pace of 17.5 million vehicles or higher said Kurt McNeil, vice president of US sales. Ford and others have increased sales to fleet customers this year and GM has reduced them.
“The economic fundamentals are there,” McNeil said. “Interest rates are still low and gasoline prices may be the lowest this summer since 2005.”
Nissan Sales Might also Rise
Nissan sales too might also increase by 11 percent and this will be the biggest increase projected by the analysts’ estimates. It will be followed closely by Honda increasing by 10 percent. The combined sales of Volkswagen and Audi brands will probably fall 1.5 percent as Europe’s largest automaker attempts to overcome consumer distrust since its diesel emission cheating scandal which may cost about $18.2 billion.
“What companies are doing is they’re creating these consumer touch points to differentiate themselves and be more competitive in terms of the experience,” said Bloomberg intelligence analyst Jitendra Waral in a phone interview. “It’s completely different than the way you do things right now, so that novelty is what grabs the attention.”