Motoring

Cupra disrupt traditional car sales model and lure buyers to the “meta-hive”

Craig Duff

Posted July 22, 2022

The newest car brand to land in Australia will bypass the traditional dealership sales model in favour of an online, fixed-priced agency agreement to target the younger market.

Cupra is looking to disrupt the traditional new car sales model.

Potential buyers have traditionally spent time in a range of dealerships, test driven their new ride, and gotten a feel and smell for their investment. That approach has worked - and continues to work - for the majority of buyers and sellers.

But according to Cupra CEO Wayne Phillips, the VW offshoot brand will be targeting the “next generation” of buyers in an online environment where they can immerse themselves in the metaverse they’re familiar with, and simulate car ownership before placing an order.

The only physical contact, should buyers wish to go down that route, will be when buyers walk in to a Cupra “garage” to finalise the sale.

Alternatively, they can visit a “city garage” to go for a test drive and then finalise the transaction online.

Cupra opened its first “city garage” in Sydney in July of 2022, with another due to open on Melbourne’s Swan St in Richmond in the near future.

Like Mercedes-Benz and Honda, Cupra has adopted an “agency” pricing model, meaning a fixed online price that doesn’t change between dealerships.

Cupra argues this approach provides transparency and avoids differences in “transactional prices” that can see some owners pay thousands more than their neighbours because they weren’t as good as haggling or didn’t cross-shop dealerships.

Only time will tell whether Cupra’s online-only approach can achieve the company’s objective of 7,000 sales in Australia by 2025.

Cupra has already showcased its upcoming models, due in Australia by 2025.

Cupra has already showcased its upcoming models, due in Australia by 2025.

Entering the meta-hive

Phillips notes the average Cupra buyer in Europe is 10-15 years younger than a Volkswagen owner, highlighting the design-driven appeal of the brand.

Cupra is also looking at a guaranteed buy-back deal for cars that are traded in within the five-year warranty period, along with developing an online “tribal” culture to create a platform that is more lifestyle than product-oriented.

To that extent, Phillips refuses to be compared to existing car brands.

“I think if you look at the brand, we’re about design, so fashion companies are more analogous to us than conventional car companies,” Phillips explains.

“We’re about involving customers in what we call the “meta-hive”: a network of people that are involved in an augmented reality involvement with their cars. If you can provide people with a world where they’re physically in a carpark but are seeing a totally different environment, then you have engaged the next generation of buyers.”

“The synthesis to buying and upgrading a vehicle is then an organic proposition.”

 

A blue Cupra Born electric car in the Sydney "city garage",

Cupra plans a series of "city garages" where owners can physically inspect and test drive vehicles.

Cupra line-up expands

Cupra is launching in Australia with a range of conventional internal combustion engine and plug-in hybrid models, including the Formentor crossover, Ateca SUV and Leon hatch. The Born electric hatch  will then follow in 2023.

As of 2025, a trio of new vehicles will join the fray, headlined by the Urban Rebel compact hatch and a pair of SUVs in the form of the Tavascan and Terramar.

The latter will include a “next-gen” plug-in hybrid with an electric range of around 100km before the petrol engine kicks in. That contrasts with a range of 50-65km for the current generation of PHEVs.

Cupra Australia director Ben Wilks says initial interest in the brand is encouraging.

”The 11,000-plus expressions of interest are a remarkable response to a brand that is entirely new to Australia,” he says.

Given the backing of the Volkswagen Group, Cupra has the resources to play the long game as it develops a following. History shows new entrants can struggle to generate traction:

Infiniti (the luxury arm of Nissan), Chinese brand Chery and the US-based offshoot of General Motors are all recent examples of brands that have tried to make it in Australia, only to withdraw in the face of sluggish sales.

 

The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia ABN 93 004 208 084 AFS Licence No. 227678.