Used car dealers will take the lead in online motor retail in 2018, as manufacturers fall behind with their direct channels, iVendi chief executive officer James Tew has said.

While OEMs struggle with the direct sales platform for new cars that they have established over recent years, Tew said, used car dealers will be able to take advantage of flexibility in prices and part-exchange solutions to reinforce their online retail position.

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“[Manufacturers] all suffer from one key problem,” Tew said. “In a market where virtually every new car is available at a substantial discount from a dealer or broker, new cars sold online by manufacturers are offered at list price.

“Unlike any other online retail model you could think of, it is more expensive to buy a new car online direct from the manufacturer than to pop out to your local retailer. Until this issue is resolved, these enterprises are severely compromised.

While manufacturers and franchised dealers can only offer new cars at retail price online, with little in the way of discounting compared to point of sale, used car dealers do not face such problems, Tew continued.

“For them, the issues surrounding adopting a complete online motor retailing model are all about practical issues, such as their preferred method of handling part-exchanges, which lenders to include within their offering, and the sale of value added products. While some of these are tricky, they are managerial choices.”

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iVendi will fully roll out their off-the-shelf motor retail platform in 2018, which will be incorporated in dealers’ existing websites. Tew cited results from the platform’s trial test period across 500 period, which it said was bringing in £2m worth of sales each month.

He added: “[It is] significant that nearly all of these are used car sales. While we expect that the new car market will resolve its issues – it simply has to – it could potentially lag some years behind used in adopting this technology.”