SAN FRANCISCO - With all the ads bombarding dealers at the National Automobile Dealers Association convention, the message was clear: Internet auto-buying services desperately want dealers' business.
But while thousands of dealers have turned to services such as Autoweb.com and Autobytel.com as a source of Internet sales leads, some dealers are starting to re-evaluate the buying services.
Dealer skepticism was evident at the NADA convention, particularly among the nation's largest dealerships groups.
Sid DeBoer, chairman of publicly traded Lithia Motors Inc. of Medford, Ore., said third-party online auto brokers will compete with a growing number of dealer Web sites.
'We don't think they'll necessarily thrive in the future because we think we can develop a brand strategy of our own under Lithia.com that will attract consumers to our address directly,' DeBoer said.
Kevin Rinke, who has Detroit area Pontiac-GMC, Cadillac and Toyota dealerships, agrees with DeBoer: Five to 10 years from now, there will not be room for third-party online brokers.
At press conferences during the convention, independent buying services were asked repeatedly: Now that the factories have launched buying services, why do you need to exist?
Dean DeBiase, president of Autoweb.com of Santa Clara, Calif., said an independent buying service offers information on a variety of makes - not just one. Shoppers seem to trust information from a third-party site more than information from a dealer or manufacturer site, which are seen as delivering sales pitches, DeBiase said.
Buying services acknowledge that dealer fees are most of their revenue - and that revenue is limited. Autoweb.com said it is trying to expand other revenue streams, such as selling ad space on its site. Its revenue in 1998 was $13 million. According to NADA, that is a little more than half the average new-car dealer's annual revenue.