LONDON - Autobytel.com will pursue online vehicle sales in Europe through a new subsidiary, Autobytel.Europe.
The subsidiary will be based in Amsterdam and will get initial funding of $27 million.
Inchcape PLC of the United Kingdom, which owns 100 percent of Autobytel in Britain, will invest $10 million for a 7.3 percent equity interest in Autobytel.Europe. Other investors include Dutch-based Pon Holdings BV, which will put in $2 million, and GE Equity.
Autobytel.Europe plans to license, invest in and offer joint services to national operating company partners throughout Europe. A Web site will be set up to cover each major European language. Service in the United Kingdom was launched in April.
Kevin Turnbull, CEO of Autobytel U.K., said that more than 1.4 million consumers have visited the British Web site, and that 15,000 purchase requests had led to an estimated 2,000 sales.
Autobytel U.K. had been surprised by the number of Web site visitors, although the level of transactions had been in line with expectations, Turnbull said. The Autobytel U.K. Web site had proved 'sticky,' with visitors staying online for lengthy periods, Turnbull said.
THE NETHERLANDS IN JUNE
In Europe, the first new language Web site will cover the Netherlands and is scheduled to begin operations in June, according to Mark Lorimer, CEO of Autobytel.com.
Germany and France will be online in six to nine months. Southern European markets such as Italy and Spain, where Internet use has been lower than in the north, will follow early next year, Lorimer said.
The numbers of dealers involved will be determined by the national operating partners. 'We have to deal with realities, and these are that each country is different,' Lorimer said. 'It may take more agencies in one country than another, and that is why we are setting up in the way we are. We want to take advantage of those differences.
'We have been studying the automotive distribution systems throughout Europe for almost two years, learning the ins and outs of the various car markets and getting to know the players in each country.'
Opposition from auto manufacturers was not seen as a hurdle, according to Turnbull. 'Manufacturers have moved from being skeptical at first to becoming at worst neutral, and now they are increasingly supportive,' he said.
Doubts had been expressed by VW in Britain, Turnbull admitted, but 'increasingly this is an old story - VW in the U.S. and VW in Wolfsburg are being supportive and the U.K. is coming round. The perspective here, I think, is that the manufacturer increasingly understands that online commerce is consumer-driven. If you have 1,000 online purchase requests for VW cars, how do you say no?'
In the United States, the parent company, Autobytel.com, which was launched in 1995, has been said by J.D. Power and Associates to account for 45 percent of all new vehicles sold through online services. This share is expected to rise to 70 to 80 percent within three years, Lorimer said.
'We want the same 45 percent market share in Europe, and within three or four years we expect the same numbers in Europe as in the U.S.,' Lorimer said.
European sales could exceed those of the United States, he said. Recent studies estimate that the number of adults online in Europe is expected to soar from 34 million currently to 100 million by 2003, and that revenue from European e-commerce is expected to grow from $32 billion this year to $425 billion in 2002, Lorimer said.