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17 July 2020

Covid-19 gives Saudi automotive brands the opportunity for digital growth

Improved digital service channels could be key during pandemic recovery.

As industries across the world continue to navigate the Covid-19 crisis, consumer behaviour and priorities have also shifted. In order to assess how Covid-19 has affected the automotive industry in Saudi Arabia, BrandsEye carried out an analysis of Twitter conversation about four automotive brands from 1 April – 28 June 2020.

Consumers remain focused on conventional service channels

While Covid-19 and lockdown have increased online conversation for the automotive industry, there has not been a significant increase in tweets about the brands’ digital services. Consumers remain focused on conventional service channels such as service centres and showrooms for the time being.

BrandsEye’s Middle East Business Director, Virginia Lin suggests that given changing consumer preferences in other industries such as retail, automotive brands may want to focus on enhancing customer communication through digital offerings, such as virtual tours, video-call consultations and low-touch vehicle purchase customer journeys.

Customers have expressed dissatisfaction with the level of customer service provided, citing a lack of responses, especially since access to showrooms and other physical touch-points were temporarily suspended during the pandemic. The most common complaints mentioned that they had not heard back from brands after enquiring about their business hours.

Covid-19 health and safety concerns

Consumers expressed concern around physical safety and hygiene, closely linked to the perception that showrooms were not doing enough to protect consumers. Consumers sought assurances that showrooms will provide security and comfort. These consumer requests were related to delivery and maintenance services.

Commenting on the new health demands facing the industry, Lin said: “Consumers have become very conscious of hygiene and personal safety in their shopping experience. As lockdown restrictions ease, it is crucial for brands to continue to meet consumer expectations and comply with government regulations, however without sacrificing quality customer service”.

Operational issues, such as stock availability, were major customer pain-points

Stock availability and turnaround time were the most negative topics and were behind many customer complaints during the reporting period. Stock availability coincided with other service and operational issues, such as turnaround time and specific dealership or branch, which indicated that brands were unable to meet customer expectations during the crisis.

Consumers complained that they could not find specific models and parts at showrooms, sometimes even months after placing orders. Others complained about service centres not having required parts or having to order them from another centre, increasing costs and waiting time. Consumers often replied to brands’ Twitter adverts to share their grievances.

June saw an increase in acquisition opportunities

Topics relating to the desire to own a vehicle doubled in June compared to previous months. Affordability and practicality of vehicles were the main drivers of conversation. Consumers expressed their desire to purchase vehicles after seeing brand adverts on Twitter.

Top positive and negative topics

VAT increases drove consumer uncertainty

However, the increased enthusiasm in June regarding new vehicle purchases may ultimately be tempered by the VAT increase to 15% on 1 July 2020. VAT conversation within the wider automotive industry began to double around 11 May, coinciding with the government announcement of a VAT rate increase.

Senior BrandsEye Analyst, Bilal Bassiouni noted that consumers expressed concern about the impact that the 15% VAT increase would have on the prices of vehicles and parts. “Some consumers wanted to know if this would affect the prices of existing orders. Other consumers warned that they would not purchase a vehicle due to uncertainty, and would rather wait for price clarity. Brands may benefit from publishing educational content regarding the impact of VAT increases on prices and purchase timelines to reassure customers.” said Bassiouni.

Volume breakdown volume The conversation in the above chart has been surfaced through content matching. This graph looks at the wider automotive industry consisting of 42 automotive and distribution brands.

Increased economic pressures on Saudi consumers may prohibit them from being able to afford a new vehicle. The immediate macro-economic impact of the crisis has led to higher unemployment, and the VAT increase is also expected to add financial pressure to consumers. Coupled with remote working trends, the demand for new vehicle purchases could be lower.

Methodology

BrandsEye carried out an analysis on four automotive brands using public Twitter conversation from 1 April – 28 June 2020. The conversation about Covid-19 was segmented through a keyword filter. 76 196 tweets were collected. 30 589 of these tweets were sent to BrandsEye’s Crowd of human verifiers for sentiment analysis, of which a sample of 4 706 was analysed for conversation topics.

A complete analysis is contained in the report

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