Remember this: The profile of Americans who are connected to the Internet is the same as the profile of people who buy new cars. Same income, same education, same aspirations.
They are the same people. And no matter the strength of franchise laws that protect new-car dealers, that basic fact is changing automotive sales as surely as water runs downhill.
It's no wonder that some automakers and their dealers are at each other's throats. But some automakers are responding better than others. They correctly see the World Wide Web as a great opportunity to trim inventory and other unproductive costs while meeting the needs of customers. They are the factories with the vision to see the Web as a source of win-win for themselves and their dealers.
Two leaders in that movement are Toyota Motor Sales U.S.A. Inc. and the former Chrysler brands of DaimlerChrysler AG.
Toyota's Internet strategy gives customers the information and experience that they demand while funneling all the business through Toyota's franchised dealers. DaimlerChrysler's program lets the consumer configure a car online and then gets a firm price for the Internet's price-obsessed buyers from the company's Five Star dealers.
Meanwhile, General Motors has allowed the Internet to drive a wedge as big as the Rockies between itself and its dealers. First GM said it planned to buy hundreds of its own stores, which could distribute Web-sold cars virtually everywhere in America. After GM Chairman Jack Smith put the kibosh on that, sales chief Roy Roberts stuck another knife into dealers with a letter saying that for GM, dealers would be 'the predominant channel for delivery and servicing vehicles.' Imagine: Dealers wouldn't even be the sales channel; and in delivery, they would merely be one of many channels. GM sees the Internet as a win-lose: Either GM or its dealers will win, but not both.
Meanwhile, dealers must realize that the Internet arms the consumer with massive information, such as costs and prices. That automatically kills a lot of old ways of selling cars.
Automakers and dealers will do best if they look at the Internet as a way to increase efficiency, cut costs and satisfy customers. The alternative viewpoint leads to disaster.