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Inside the Shop……

Inside the Shop…… Customer Sales Identify and evaluate products Resell Identify sellers Stay informed Customize Service Negotiate Finance Drive Purchase Repair Insure Isn’t it very troublesome to go through sooooooooo many processes???!!!!???!!! NOW ……… .

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Inside the Shop……

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  1. Group JCAIS, HKUST

  2. Group JCAIS, HKUST

  3. Inside the Shop…… Customer Sales Group JCAIS, HKUST

  4. Identify and evaluate products Resell Identify sellers Stay informed Customize Service Negotiate Finance Drive Purchase Repair Insure Isn’t it very troublesome to go through sooooooooo many processes???!!!!???!!! Group JCAIS, HKUST

  5. NOW………. • We can slim up the all the procedures by only visiting….. Group JCAIS, HKUST

  6. Group JCAIS, HKUST

  7. Group JCAIS, HKUST

  8. Group JCAIS, HKUST

  9. Group JCAIS, HKUST

  10. Group JCAIS, HKUST

  11. Group JCAIS, HKUST

  12. Autobytel.com Case Study Annie Lam Janet Liu Cherry Sun Irit Zhang Simon Zheng Group JCAIS, HKUST

  13. Agenda • Company Background • Autobytel.com ‘s features • Problems and solutions • Theory • Sources of Revenues • Updates: Autobytel.com TODAY • Suggestions to Autobytel.com • Q&A Group JCAIS, HKUST

  14. Company Background: • Founded by Pete Ellis • Initially owned 16 dealerships in California and Arizona • 1980s business was in upside • 1990s hit by the recession, went bankrupt • 1995, Auto-By-Tel Corporations was off and running • 1998, name changed to autobytel.com • Business has been running well since then until now Group JCAIS, HKUST

  15. Peripheral Processes Peripheral Processes Peripheral Processes Alternative Brands InsuranceFinance Content... CoreCompetence CoreCompetence CoreCompetence Supplier Supplier Peripheral Processes OutsourcedService OutsourcedService Outsourced Outsourced CoreCompetence Service Service Service Service Buy Drive Autobytel.com as in Infomediary Generating Leads Dealer Customers Dealer OrderFulfillment OEM Group JCAIS, HKUST

  16. Benefits for Customers: • Keep Customers totally informed • Offer haggle-free low prices • Variety of choices in shopping for vehicles • Provide specific vehicle-related decisions • Comprehensive service range, like Financing, Insurance and Warranty… • Online shopping minimizes transportation and other related costs Group JCAIS, HKUST

  17. Problems and Solutions • Theory Group JCAIS, HKUST Group JCAIS, HKUST

  18. As a Internet Company • Six years compare with Nasdaq(like technology and internet) in stock market Group JCAIS, HKUST

  19. Competition • Auto Vantage • Microsoft’s CarPoint • Auto Connect • CarsDirect.com • Manufacturer and Dealer Sites Group JCAIS, HKUST

  20. Competition • Just low price is not enough. • To face the rapidly changing market, there is no time to reflect. • Advertising should be traditional media plus modern media. Group JCAIS, HKUST

  21. Problems and Solutions • Loyalty • Dealer • Autobytel gave each dealer an exclusive geographic territory power using Autobytel system, which was always larger than the territory assignment by manufacturer. • Autobytel guarantee a large enough volume of quality purchase requests for dealer to reduce their cost. • Customer • Loyalty program: rewards, points accumulation and discount based on track record Group JCAIS, HKUST

  22. Problems and Solutions • How to arrange customers to dealers • Separate subscription fee • Dealer’s subscription fee based on a number of factors, including the location of dealership, the type of franchise (likes BMW vs. Benz), internet penetration in the area. • Sign-up fee • Dealer also need to pay sigh-up fee based on per car brand when they join Autobytel. Group JCAIS, HKUST

  23. Two-sided Market • Car dealer Dealer was charged $500--$7500 US dollars monthly. • Car buyer Consumer paid nothing for the services. • Existence of Car dealer • Most state franchise laws made it impossible to cut the dealer out of new car buying process. • Autobytel.com make the contact with the dealer effective and pleasant. Group JCAIS, HKUST

  24. Traditional Problem • Asymmetric Information • Higher margin • Moral hazard • Transaction cost • Lemon Market • Pre-owned Car Group JCAIS, HKUST

  25. Information Searching Services • Symmetric information to build trust • Intermedia platform for matching • All you want to know • Even for how to drive… • Once information were publicized, the best way is to join Autobytel at the first time. Group JCAIS, HKUST

  26. Dealer • Requirement for being an accredited Autobytel.com dealer • Sign agreement to provide prompt responses to customers, no-haggle pricing, and full disclosure regarding vehicle availability, add-ons, and related matters. • Meet a variety of criteria like customers satisfaction metrics and sufficient inventory. • Go through the extensive training at Autobytel University. Group JCAIS, HKUST

  27. Customer • Warranties for Customers • Manufacturer’s warranty • Price • Free from defects – any necessary repair at no charge • Three years or 36,000 miles • Pre-owned car • Translatable warranty • Buyer's Guide Sticker Group JCAIS, HKUST

  28. Marketing Strategy Group JCAIS, HKUST Group JCAIS, HKUST

  29. Income Statement Group JCAIS, HKUST

  30. Sources of Revenue • 1. Lead Fee (US$ 21.5m) • 2. Advertising (US$ 3.4m) • 3. CRM Service (AVV) (US$ 5.3m) • 4. Data & Application (US $1.5m) Group JCAIS, HKUST

  31. Latest Financial Data (Jul 2004) • Revenue US$31.5m (45% inc y-o-y) • 2 acquisitions (iDriveonline & Car.com) • Net Income US$1.3m (13% y-o-y inc) Group JCAIS, HKUST

  32. Latest Financial Data (Jul 2004) • Total Purchase Request 1.2m (45% sequential increase) (139,000 Financial Request) • Dealer closing ratio : 18% • Dealers: 35,800 Group JCAIS, HKUST

  33. Branding • #1 in automotive e-brand in mid-99 • #7 most recognized e-brand in US • Building Brand awareness • Driving traffic to website Group JCAIS, HKUST

  34. Brand awareness • Co-op with Yahoo!, Excite, Infoseek, Netscape & Lycos (many of them are EXCLUSIVE!) • Provide engine for the automotive information service like Edmunds.com, Kelly Blue book & IntelliChoice.com • Spent US$3.7m on Internet marketing & advertising Group JCAIS, HKUST

  35. Traditional advertising • Ad in Computer & hobbyist magazines • Ad in Major automotive magazines • TV Ads (CNN, CNET, NBC, MSNBC) • FIRST Internet Co appear in SUPER BOWL in 97 & 98 Group JCAIS, HKUST

  36. Today… • Most visited new vehicle buying & research destination (03 & 04) • 76th most visited property on the internet (3Q 2004) • 8.2m average monthly unique visitors • #1 Ward’s Dealer Business e-Dealer 100 report (2004) • Web Control as #1 independent customer management tool Group JCAIS, HKUST

  37. Autobytel Worldwide • UK (1998) • Sweden (1998) • Japan (1999) • Europe (2000) • Netherlands (2001) Group JCAIS, HKUST

  38. More than Auto-by-tel? • AVV, Inc. (Dealership Mgt System) • AIC (Online automotive information & content provider) • Autoweb.com (research-driven buyers) • Autosite.com (entry level buyers) • Carsmart.com • Car.com Group JCAIS, HKUST

  39. AutobytelDirect • Integrated Multimedia Marketing Tools • Allow marketers to search active customers Group JCAIS, HKUST

  40. What’s next? • Enter Chinese Market? • Soaring Car Sales (Car sale grow at an annual rate of more than 10%, accounted for 15% of global growth in the next 5 years) • Lack of high quality service • Under developed after-sales sector Group JCAIS, HKUST

  41. Conclusion • Profit shows that Auto-by-tel is moving to a good direction • Making use of its own advantage to generate more revenue • Must plan ahead Group JCAIS, HKUST

  42. Q & A Please feel free to raise questions. Group JCAIS, HKUST

  43. Questions • What’s the value of Autobytel.com to Customers?? • What is the key elements that contributes to the success of Autobytel.com? Explain. Group JCAIS, HKUST

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