“In June we launched a process where customers can apply for credit from more than one source. This changes how the market works for verticals in Brazil owned by banks. It increases leads and delivers more customers to dealerships.”
Ricardo Bonzo Filho, CEO at digital automotive marketplace ICarros thinks integrating banks and dealers into the transaction has benefits for all.
He will be speaking at AutosBuzz.com (upcoming in London 17-18 Sep) about how simplifying user registration boosts conversion rates.
“I will be exploring the idea of how we move from a classified model to transactional for credit and finance in Brazil.
“In Brazil, due to financing, banks own verticals like ICarros. I will show why the market is like that and what makes it unique.
“ICarros belongs to Itau BBA, one of the largest banks in Brazil. I will show how we have started to integrate banks into our platform. We can now offer customers [who are] looking for a new vehicle, credit options from two banks, which can be completed and approved online.
“We are looking at how to add even more to provide better customer options, more credit proposals to increase leads and deliver more customers to dealerships.
“This is the first model in the Brazilian market to provide more bank options inside the classified model, fully integrated during the customer journey to find a new vehicle.”
Does the system work?
“Yes, it’s a good strategy for a bank-owned vertical because the customer is searching for a new vehicle online. If the bank doesn’t have a forum like ours for customers at the beginning of the journey, they lose the opportunity to get customer information at the start, before being approved for credit and finishing the transaction at the dealership.”
How do you encourage dealers to move to an online transactional model?
“Customer behaviour helps. Data shows six years ago in Brazil they took six different steps to buy a car from a dealer. Now, it’s around 1.5 steps. Customers are not researching vehicles at dealerships anymore. They go to the dealer to close the deal.
“If the dealer doesn’t have an online inventory, the customer will not reach his vehicles and will negotiate with another dealer. It’s not complicated to convince dealers to put their inventory online, the complicated part is showing them the benefits and how the new business model drives sales.”
How do multiple banks help your business?
“Full integration helps the customer because they need to know if they have credit in place to buy the vehicle before purchasing. If I capture them at the beginning, I get relevant and important information to lead the customer to finish the purchase or understand why they decide not to buy.
“Previously, the information provided online at the start was not always identified as a potential problem, so when a customer visits a dealer and human judgment is needed to decide if finance can be offered, this can cause problems.
“Using our finance model lets customers apply for credit from their own home and avoids potential human conflict, so it’s less intimidating. This has helped us attract customers inside our forum.
“By the time they go into the dealers, most questions have been answered through the initial finance application process, so no personal information needs to be changed. The dealer enters the ID number to get the customer information or print the contract.”
What are the big issues in the Brazilian automotive marketplace?
“In Brazil, sales have dropped due to the struggling economy, so we hope this improves.
“We need to work a lot on the offline process at the dealership because it is frustrating for the customer. The customer has a smooth online experience then the dealer forces him to almost start again.
“The second point is to look to the future. A younger generation is coming to the market. They don’t want to buy from a physical site so we need to help dealers sell differently.
“We need to decide how we go deeper into this journey, not only in approving credit but to put the entire process — including selling the car —online, with no obligation to visit dealers to close the deal. That is the next challenge.”
What are the most important things happening at ICarros?
“Moving from a simple classified only to a classified business with transactional processes and eventually, a full platform that includes finance. We will keep adding transactional products like insurance that will be available online.
“We expect that in 5 to10 years, our business model will be completely different, more transactional and closer to dealers’ revenue model. Today, banks don’t pay ICarros a fixed monthly subscription. They pay a success fee. Why not change to a single subscription process where they pay to announce the vehicle? I think this is a strategy for the future.
“In the second half of 2019, we want to integrate transactional solutions and increase the number of dealers who work with us, by promoting our credit proposition alongside the banks. We are in the integration phase with other banks to be able to give consumers more options than two banks.”
Ricardo Bonzo Filho is the latest in a series of interviews with speakers at the AutosBuzz.com conference in London on September 17 – 18. Ricardo is CEO at ICarros, the leading automotive vertical in Brazil. He is skilled in business planning, digital management, risk management and corporate finance.