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100% digital sales? Not so fast

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The COVID-19 crisis has accelerated the move towards digital auto retail, but and the Honda executive say the process can only be pushed this far by a pandemic.

Dealers are essential to the car buying process, they say, especially for lease returns.

Honda Canada new CEO Jean Marc Leclerc said financial institutions generally wouldn’t accept transactions without “wet signatures on documents.”

“We have a captive finance company through Honda Finance,” Leclerc said. “There are solutions in place that we are developing. They weren’t quite ready to go.

“Obviously, we would have liked this to be the case in this crisis. But certainly, these things were in development.

Honda’s sales model will, at least for the foreseeable future, include in-store contact with customers, Leclerc said.

“We have told our dealers that we have no plans at this time to do something 100% online and just have the vehicle delivered to your door. Maybe one day we’ll go to that. But we still think human interaction, the relationship with the dealership you build, is important. “

In the meantime, Honda “develops the documents [for] electronic signatures versus wet signatures, which from a legal perspective in Canada, in terms of acceptance, continues to evolve, ”said Leclerc.

“But the technology is definitely there. It just needs to be, in our particular case, perfected so that we can launch it to add it to our e-business process.

Genesis Motors Canada, meanwhile, has a system in place to complete transactions entirely online, including lease and finance contracts. The Company’s leasing is through its own captive finance banner, which is a sub-brand of the Hyundai Finance business unit, and financing is arranged directly with RBC and Scotiabank. In each case, the customer downloads and prints a copy of the contract from the Genesis at Home platform, signs the physical copy, then scans and uploads it again to the same platform.

“Since launch, we’ve been working with the print / sign / scan / download formula in light of the ‘wet signature’ requirements,” Jarred Pellat, Genesis Motors Canada spokesperson, said via email. “Our current method meets all the requirements of lenders. “

WAITING FOR FRAUD

Resellers have said a physical presence is required, even though they allow customers to shop more online. Many have warned that online sales are more susceptible to criminal activity.

“This type of environment is so conducive to fraudulent transactions,” said Shahin Alizadeh, CEO of Downtown Auto Group in Toronto.

“We have already detected a few fraudulent transactions that attempted to wrest a car from us. They weren’t who they claimed to be, and we got the police involved. Alizadeh was among several dealers who said Automotive News Canada that fraud prevention has become a top priority and that they have implemented measures that include the requirement and verification of multiple forms of customer identification.

“I find it scary,” said Robert Stein, president of Plaza Auto Group in the Toronto area. “Online sales are great. If we can go in that direction, we’ll be very lucky to do so. But there is going to be a lot of fraud. There always is. You have to do your due diligence. It’s not like you’re just going to leave the car in a parking lot for the guy to pick up before you post a recording.

In Windsor, Ont., Terry Rafih, CEO of Rafih Auto Group, said his employees ask for multiple pieces of identification to prevent fraud.

“If someone wants to fuck someone, they can find a way to do it,” Rafih said. “But we do all we can [to prevent that]. “

Executives and dealers alike insisted that physical interaction was still necessary, not only to guard against fraud, but because “wet signatures” are still required in many cases to close a sale.

Rafih said the crisis will definitely transform automotive retailing. It is therefore essential that dealers find the best way to work with customers remotely, safely and securely, as many will be reluctant to leave their homes for a period of time even after the restrictions are lifted.

“Whether it’s restaurants, bars, dealerships, it will take a while for people to feel comfortable enough to come back,” he said.

With files from Stephanie Wallcraft