Automotive News - February 4, 2008 - (Page 40) 40 • FEBRUARY 4, 2008 The online dealer INSIGHT Dealers use Net to snag specialty car buyers Richard Truett rtruett@crain.com Minutes after Chrysler LLC opened its order books for the new-era Dodge Challenger in early December, at least a dozen of the red-hot cars rumbled onto the eBay Motors Web site. Bidders went nuts. They drove the price of the tire-shredding muscle car far beyond its $37,995 sticker. Many early buyers paid as much as $60,000 for the iconic car, reborn from the early 1970s. The Challenger is the latest example of how savvy new-vehicle dealers use the Internet to maximize profits on sales of low-production, high-performance and specialty cars. Before the Challenger, online buyers paid big premiums for the Audi R8 sports car, the Pontiac Solstice and Saturn Sky roadsters and vari- ers with a few keystrokes, dealers are finding that it’s getting tougher to rake in huge profits by selling on eBay. Web-worthy The most likely cars and trucks to sell at online auctions such as eBay are Low-supply, high-demand vehicles Vehicles with an outstanding feature, such as high fuel economy Special-edition models Vehicles in early production or at the end of a production run ible on eBay for $59,405. The car’s sticker price is $46,995. The dealership received no bids for the car, but Brent Popdan, the dealership’s Internet sales manager, wasn’t disappointed. He said the eBay auction was a great advertising vehicle that let potential buyers know he has the GT500 in stock. “People are shopping the Internet for the best deals,” Popdan told Automotive News. He said he wishes he would have listed the car before “a bazillion” Shelby Mustangs became available online. Don Pugh, Internet sales consultant at Superior Auto Mall in Siloam Springs, Ark., says none of the dealership’s local customers called about the Challenger or placed their names on a waiting list when the car arrived in showrooms. But the dealership ordered a Challenger anyway. Pugh listed the car on eBay for $54,485. Bidding had stalled at $50,115 when the auction ended, and the car did not sell. That’s the danger of playing the game: Dealers could end up with a car in inventory that they can’t easily sell locally. As of mid-January, the Challenger remained in dealership inventory. Timing is everything Recently, for example, 196 Shelby Mustangs were listed on eBay Motors — a virtual flood in the market for any rare car. Bidders kept their wallets in their pockets. Among about 100 Shelby Mustangs that previously went through the eBay auction process, only nine Shelby GT500s sold. None brought more than a few thousand dollars over sticker price. Challenger mania also has cooled, although the cars still are selling above sticker. You now can buy a Challenger for about $50,000. Last month, Gene Evans Ford in suburban Atlanta listed a new white Shelby GT500 convert- The Shelby GT500: Staying close to sticker ous Ford Mustangs. And before that, Toyota’s Prius hybrid was hot. But a growing number of small dealerships in out-of-the-way markets are ordering specialty cars and offering them for sale on the Internet. Now that a greater selection is available to buy- A trip to our booth will pay for your trip to NADA! If you sign up for eLEAD CRM CALL CENTER services during NADA, WE’LL WAIVE THE SET UP FEES! Save as much as $3000 on the unbeatable combination of eLEAD CRM software and America’s most effective Call Center.* Find out about GOLDDIGGER, LOTPULSE, and a host of other profit building programs designed to give you a GREAT 2008! Factory hands-off Automakers take a hands-off policy toward dealers’ methods of selling sought-after specialty cars. Says General Motors spokeswoman Susan Garontakos, “It’s the business of the dealer to do what he wants with the vehicle.” Ford Motor Co. does not prohibit its dealers from selling vehicles outside their markets, says spokeswoman Marisa Bradley. But the company requires dealers to sell directly to customers, not to brokers or other third-party buyers. Dealers know their local markets can absorb only so many specialty cars, but offering them for sale on the Internet puts the cars before a worldwide audience. All it takes for the price of a specialty car to shoot into the stratosphere is two or more rich bidders who really want it. Still, dealers are learning that the law of supply and demand in the virtual world works much as it does in the real world. Some dealerships force local and online customers to compete for vehicles. Others don’t. Internet dealers Pugh and Popdan said they would give a local buyer priority over an out-of-area Internet buyer. “They wouldn’t have to get in line and bid like everyone else,” Pugh says. “They would have to make an offer on what the market is for that vehicle.” Both dealers say they have sold many vehicles to out-of-area buyers for more than the sticker price, but they note that those higher profits are offset by reduced revenues in other dealership departments. It’s unlikely, for instance, that a service department will see a vehicle sold to a collector in another state.c 866-451-1649 WeMakeYourCalls.com * Some restrictions apply. See us at NADA Booth #6425S Next to Ford Motor Company http://WeMakeYourCalls.com http://WeMakeYourCalls.com
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