Mobile.de, Germany’s largest vehicle marketplace, is calling a halt to its end-to-end digital retailing service for used cars at the end of September. The company, which shared the development in a letter to customers that it also shared with media outlets, blamed the decision on the cool market response to the offering.
“Through our Online Purchase product, we were able to achieve considerable improvements in customer experience and gather many important insights,” said COO Jochen Cuntz in the shared statement.
“However, the expected scaling did not materialize. Although German car buyers are increasingly researching online and using services, they are not broadly adopting a complete online purchase where everything is handled digitally. They prefer to use online services according to their individual needs and like to supplement these with direct dealer contact.”
The digital retailing service was built around selling certified used vehicles online on behalf of dealers, which paid Mobile.de a commission on every successful sale.
“Instead, we will focus our resources on other aspects of the digital retail sector that allow us to design the customer experience more flexibly and modularly between online offerings and direct dealer contact,” said the COO.
Cuntz added that the move was in line with market dynamics worldwide, citing AutoTrader UK and Carsales Australia among major global players that are “shifting their focus from a complete online purchase to more flexible solutions where customers can choose between online interaction and direct dealer contact.”
The COO said that Mobile.de was already working intensively on innovative data and financing services that enable “more binding” customer feedback.
“In these areas, we see not only positive customer feedback but also the desired scaling potential,” said Cuntz.
“During the second half of the year, we will introduce further product updates and digital retail solutions that build on our experiences with Online Purchase. With these product innovations, we plan to stand by the trade as a reliable partner in all phases of the purchasing process.”
The closure — which the company emphasized only covers purchasing used cars directly from Mobile.de and having them delivered to the buyer’s doorstep — comes during a challenging time for online auto sales in Germany.
In spring this year, Volkswagen pulled the plug on HeyCar, a Germany-based automotive marketplace. HeyCar’s difficulties were compounded by the slower-than-expected adoption of fully digital vehicle purchasing.
“The digital purchasing behavior of automotive customers has not developed as strongly as originally assumed. Most customers still inform themselves on the internet but then buy the vehicle physically at the dealer on site,” stated Volkswagen Financial Services, HeyCar’s majority owner and the financial arm of Volkswagen Group.
Mostyn Goodwin of OC&C Strategy Consultants added, “consumer purchase behavior for cars has proven stubbornly resistant to disruption … especially given the inherently physical stages of the car-buying process, such as test drive, delivery, part-exchange and after-sales service.”
Nonetheless, Mobile.de’s main rival in Germany — AutoScout24.de — is still running its own digital retailing service called Smyle. It’s possible that the company, owned by private equity firm Hellman & Friedman, has been more successful at building out the model.
Mobile.de is owned by Adevinta, which is reportedly considering an IPO for the company, potentially valuing the Germany-based auto marketplace at up to $10 billion. In April, Mobile.de altered its pricing structure, introducing adjustments based on the size and value of dealer inventory.
This article was amended following the receipt of a statement from Mobile.de.
