Rather than gas mileage or futuristic new features, the biggest buzz at last week’s 2000 North American International Auto Show in Detroit, Michigan was about how e-commerce is disrupting the traditional sales structure of the auto industry.
The show launched with announcements of Internet alliances by Ford with Yahoo!, and GM with America Online and NetZero. Then came a rush of new Internet initiatives that automakers are using to keep dealers at the center of the car sales process — even as consumers delight at the notion of cutting the sales professional out of the purchase.
After those bombs, the last story left was Internet-wired future car prototypes.
The burning questions about automotive e-commerce concern the fundamental structure of the auto sales process. Will dealerships become nothing more than service and warehousing lots? Will car companies become Internet retailers in competition with the sales forces of the dealers? Will third-party auto sites take over the online sales effort from automakers that are shy about offending their dealer networks?
Internet Control and Human Service
The answers to some of these questions may be found in a consumer survey that was released this week by Kenneth Hollander Associates. The Atlanta, Georgia-based market research firm asked 1,459 Internet consumers who were considering buying or leasing a car in the next 12 months about their online car buying preferences.
The Hollander report, which was circulated by independent automotive service Autoweb.com, shows that consumers want control over the auto buying process while still having access to human interaction. The largest group of prospective Internet buyers, 79 percent, wants to be referred to a dealer once they select a car model and negotiate a price.
Only 14 percent of the respondents want to keep the dealer completely out of the process.
Seventy-six percent of respondents feel that it is important to speak with a live person during the process of purchasing a car online. Forty-one percent used the Internet when shopping for their last vehicle, and 56 percent plan to use the Internet as part of their next car purchase.
“Mass market consumers are looking for enhanced control of the car buying process, yet they still seek human interaction for this significant financial transaction,” said Jim Wolfe, vice president of marketing at Autoweb.com.