Last week, upstart car-Order.com proudly announced its launch of an online car-buying service, then claimed bragging rights as the first and largest 'e-dealer.'
The company says it has broken the car-buying mold - but it has a long way to go before it revolutionizes auto retailing.
In truth, carOrder.com is nowhere near the first and largest dealer on the Internet. In fact, it has yet to purchase one dealership.
To its credit, carOrder.com has received a $100 million investment from Trilogy Software Inc., an Austin, Texas, Internet software developer that also works with Ford Motor Co. The buying service is trying to round up $500 million more from other investors.
CarOrder.com plans to buy a network of 100 dealerships throughout the country and turn them into distribution and logistics centers for Internet car sales. It also has partnerships with 200 dealerships to hawk their inventories on the carOrder.com Web site.
REVOLUTION ISN'T EASY
But most of these plans remain on the drawing board.
Somebody had better warn the company's 22-year-old president: Others have tried to revolutionize new-vehicle retailing and found it wasn't so easy. They had grand plans, too.
H. Wayne Huizenga, chairman of AutoNation Inc., the nation's largest dealership group, had to revise his strategy since he started buying new-car dealerships nearly three years ago.
Ford thought its Auto Collection retail chain was a better idea. But the company has lost market share in some cities where it set up joint ventures with dealers. Now, some of Ford's dealer partners are bailing out.
CHALLENGE IS COMING
Moreover, a crowd of franchised dealers likely would dispute carOrder.com's boast that it is the first and largest dealer involved in e-commerce.
Seattle dealer Marty Rood was the first to pioneer the concept of an online auto-buying service with his DealerNet site in 1994. Thousands of dealers had Web sites and had begun experimenting with e-commerce before carOrder.com ever existed.
The truth is that auto retailing is a complicated business. A dealership requires skilled and hands-on managers and is not easily run from a distant corporate office.
Time will tell if carOrder.com is starting a revolution or spinning a pipe dream.