Online car sales are expected to cross 1m pa in 2020 and grow to more than 6m a year by 2025, according to research by consultants Frost & Sullivan (F&S).

F&S maintains that the online vehicle retail model is disrupting the traditional dealership model by enabling original equipment manufacturers (OEMs) to quickly introduce their products to the market while keeping costs low.

In 2018, more than 618,000 new vehicles were sold online globally, nearly double the unit sales in 2017. Online sales are expected to cross 1m in 2020 and grow to more than 6m a year by 2025. It is expected to become the preferred form of vehicle purchasing among private buyers, but fleet and corporate buyers will continue to favour the traditional retail format, F&S says.

"The popularity of the eCommerce model among the younger audience and the success of Tesla's online retail strategy is likely to encourage other automakers to explore online retail beyond just pilots," said Isaac Abraham, Senior Consultant, Automotive Retail & Business Strategy. "With the emergence of novel purchase models such as vehicle subscription and short-term leases, the dealership of the future is expected to become more experience-centric."

"Alibaba is expected to be the frontrunner in providing eCommerce solutions in China and is partnering with entrants to maximize its reach in the region," added Abraham. "Hyundai is likely to introduce its in-house online vehicle sales platform in Singapore, the UK, and Canada, while, Polestar will enter the North American market with online stores leveraging its current Volvo dealership network. Following the digitisation of its retail platform, Volkswagen could become one of the best-selling online automotive brands in Europe."