Automotive News - February 4, 2008 - (Page 54) 54 • FEBRUARY 4, 2008 The online dealer And the survey said INSIGHT Almost 600 U.S. dealers took part in an Automotive News survey of how they do business online. Here are some responses. Does your dealership post its new-vehicle inventory online? No 0 20% 40% 60% Yes 80% 100% How many used vehicles do you sell online in a typical month? 75-more 50-74 25-49 0-24 Does your dealership post its used-vehicle inventory online? No 0 20% 40% 60% Yes 80% 100% Do you negotiate prices online? No 0% 20% 40% Yes 60% 80% 100% How quickly do you respond to online customer inquiries? Longer 0.4% Within 2 days 1.4% Within an hour 56% Same day 42% Survey: Dealers embrace Web — cautiously Retailers respond to growth of Internet shopping David Kushma dkushma@crain.com Keeping it personal How many new vehicles do you sell online in a typical month? 75-more 50-74 25-49 As one auto dealer sees it, “tire kickers have become mouse clickers.” Dealers say shoppers increasingly are willing to forgo dealership visits and buy cars and trucks via the Internet. And dealers are responding to that preference. But an unscientific Automotive News survey suggests that some dealers are far more advanced than others at putting some aspects of the sales process online. And some dealers warn that Internet sales can have as many drawbacks — including smaller profits — as benefits. Nearly 600 franchised U.S. dealers took part last month in the online survey of their dealerships’ Web practices. They say e-sales still represent a relatively small, if growing, share of their total sales: Almost three out of four dealers say their largest-volume 0-24 stores sell fewer than 25 new or used vehicles online in a typical month. Got it wired Among other key findings: Almost all dealers surveyed say they post their stores’ used-vehicle inventories on their Web sites. Nine out of 10 post their new-vehicle inventories as well. Nearly all dealers say their stores respond to customers’ online inquiries the same day they are received. Five out of six dealerships buy used cars and trucks at online auctions. Four out of five dealerships advertise on third-party Web sites. Three out of four dealerships schedule test drives and service appointments online. Two out of three dealerships negotiate vehicle prices online. Three out of five dealerships sell parts online. Adam Simms, general manager of Toyota Sunnyvale in California’s Silicon Valley, says his dealership does most of its business online. “You’ve got to be able to deal with the customer on the Internet as well as the customer who comes into the showroom,” Simms says. “The coming-in customer is never going away, but the number of people who are clicking is getting larger.” Skip Davenport, a Ford dealer in Greer, S.C., says the Internet is “making the buying process a lot easier for the customer.” But he doubts that online sales will ever make dealership visits obsolete. “You can buy groceries online, but how many people do?” Davenport says. Customers “want to come to the Pen still mightier Does your dealership use electronic contracts for finance and lease transactions? Yes 35.7% No 64.3% physical location, they want to drive the car, they want to meet the salespeople.” Room for doubt Other findings of the Automotive News survey suggest that the day remains distant when vehicle buyers can expect to complete their purchases entirely on the Web. Most dealers in the survey say they do not accept trade-ins online. Twothirds say they don’t use electronic contracts for finance and lease transactions. Nearly two-thirds say fewer than one out of four buyers make their first contact with the dealership online. In a part of the survey that allowed dealers to make anonymous comments, several complained that online vehicle sales are less profitable than those made at the dealership. Web customers also tend to be less loyal, they say. “Online purchases are just numbers, with very small gross,” a dealer said. “But if we don’t take the deals, the store down the road does. The online shopper is killing bottom lines, thus having to force us to raise our dealer fee. Have to make the profit somehow.” Another dealer lamented that “online communication has taken away the value and personalization of the car-buying process.” But for every dealer who said he wished “the Internet blew the frig up,” another called online sales “the single greatest frontier for increasing our business.” One dealer advised: “Embrace the Internet or be prepared to be run over by it.” c Ryan Beene contributed to this report
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