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Basics

Select car, pick options, dealer price comparisons, dealer recommendations ... 2.7% of new vehicles sold via internet in 1999 , increasing to 5% in ...

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Basics

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    The Online Car Industry - Kanyi Masembwa - Mohd-Ridzwan Nordin - Preethi Parameswaran - Andrew O’Shaughnessy Major Players in Online Cars Lead Generators Microsoft’s CarPoint Autoweb.com Cars.com Carclub.com Direct Sellers AutoNationDirect.com CarsDirect.com CarOrder.com DriveOff.com Greenlight.com Hybrid Autobytel.com Source: Wall Street Journal, January 24, 2000, B1

    Slide 3:Lead Generator Pass on customer inquiries to dealers and offer Internet training to sales staff Select car, pick options, dealer price comparisons, dealer recommendations Direct Seller Consumers can buy and sell directly from their computer Login, select car, financing options, arrange delivery or pickup Hybrid Lead Generator and “Click & Buy” option Allows Research and Dealer Recommendations, Research and Direct Purchase, or Click & Buy

    Basics

    A Sample Front Page – carOrder.com Lead Generator - Sample Front Page Hybrid - Sample Front Page

    Slide 7:Customers

    Buyers/Sellers Leisure/Sporty customers First time buyers Repeat customers Business people Price sensitive people The .com race for a fraction of the 1999 $350 billion auto market could have profitable awards 2.7% of new vehicles sold via internet in 1999 , increasing to 5% in 2000 -J.D. Power

    Slide 8:Customer Quotes

    "I am very impressed with your page. It is very informative and useful. I know now where I will look first when looking for that right car! Keep up the great work." – Al Cars.com customer “Better Price, not having to deal with a salesperson, and we got just what we wanted.” Anthony & Heidi Wong – CarOrder customers “For the First time in my life, I hugged a car sales person.” Wanda – Autobytel customer

    Slide 9:Attracting Customers

    Discounts Additional features/maintenance Referral (word of mouth) Offer incentives for free cars Online research library (Autobytel) Weekly automarket reports (Autobytel, Autoweb) Financing online (Autoweb – through peoplefirst.com) Blue book value of used cars

    Slide 10:Value Added

    Reminder emails for oil change/maintenance Special discounts on services/parts Service car anywhere Home delivery Free and convenient delivery service Place advertisements to sell cars Saves time Free mailing lists Test drive reviews Search process easier

    Slide 11:Value added cont’d

    Lemon check done Subsidized leases (edmund.com) Safety auto information (edmund.com) Consumer reports Competitive prices Community building with CarTalk’s Click & Clack (Cars.com)

    Slide 12:Price Comparison BMW 323i

    bmwusa.com $29,485 CarOrder.com $25,425 CarDirect $26,976

    Slide 13:Legal Impediments & Pricing Strategies

    In TX, lobbyists have caused the tightening of franchise laws to further restrict efforts to sell cars without dealers. CarsDirect, Corder, and Autobytel cannot sell in TX. Lead Generators originally placed their businesses on dealers’ ignorance of the internet. 1 Possible shift from MSRP to cost-plus pricing. Consumers are well informed of wholesale price. 2 1 Wall Street Journal, January 24, 2000, B1 2 Ibid A4.

    Slide 14:Trying the product

    Promotions Free maintenance Build your own car (Free customization) Free Delivery Free Research Convenience of Virtual Customization

    Slide 15:Retaining customers

    First time customers into repeat customers Referrals Strong customer relationships throughout process (research, buying and servicing) On maintenance plan, customers are committed to an ongoing relationship Near instantaneous price quotes Bypassing dealer sales personnel

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