Consumer Reports declared Thursday that online auto sales have not yet become a viable alternative to traditional outlets.
The magazine reviewed five major Internet car buying sites, finding a lot of useful information — but also a lot of poor service.
For its Internet study, Consumer Reports asked 1,056 people to request quotes for six different vehicles from sites such as Microsoft’s CarPoint and Cars.com. Only 35 percent of the shoppers received a quote within the allotted time period.
To make matters worse, the quotes were often not for the exact vehicle specified in the query, and 22 percent of the shoppers were told that they would have to visit the dealer to get a firm price.
What’s Going On?
While the results certainly are not shocking, one has to wonder what is going on behind the scenes. In my opinion, not responding to RFQs from consumers is tantamount to dealers slitting their own throats. I am assuming, of course, that the dealerships, not the Web sites, are to blame for not responding to the requests.
While it is hard to imagine the Web sites not passing the requests on to local dealerships, I can understand how the ball gets dropped once it reaches the dealerships.
It is obvious to me that many of the salespeople at car dealerships either resent or are resisting the introduction of the Internet into the car buying process.
They also may be assuming that since most quotes do not result in sales, there is no reason to bother to send them. What else could explain the lack of response and shoddy behavior documented by this survey?
Online Car Sales Inevitable
Ultimately, these same dealers and their salespeople will live to regret their inability to welcome Internet sales into the fold.
Whether these dealerships like it or not, the general consensus among observers is that the online auto market will really heat up over the coming years. For example, Forrester Research projects that new online car sales will jump from 15,000 in 1999 to 500,000 by 2003.
Since such sales are inevitable, auto manufacturers will not tolerate unresponsive behavior from their dealerships — especially since the automakers have gone out of their way to keep dealers in the online sales loop.
A Rod for Their Own Backs
During the last year, numerous analysts have wondered whether auto manufacturers will cut out dealerships to sell directly to consumers. So far, the concern has been academic.
Auto manufacturers have steadfastly supported their base of dealers by making sure they are included in online sales. Even the new services that will purportedly sell directly to consumers will buy through dealers.
However, the Consumer Reports study will undoubtedly make these same automakers furious, because they will see lost sales associated with every quote that is not handled properly.
More importantly, the manufacturers will feel that they have been stabbed in the back by the very dealerships that they have supported with their loyalty.
These dealers should have no illusions. If they cannot properly close the loop with consumers who request quotes online, the auto manufacturers will make certain that they find someone who will.
Therefore, it is obvious to me that many car dealerships are swimming furiously against the tide. Unless they learn to leverage the power of e-commerce to their customers’ advantage, it will only be a matter of time before many become extinct.