Considering that the industry is coming off a record sales year and huge profits, all this talk about the Internet radically changing the car business may sound a little loony to some.
That may explain why too many dealers dismiss Web retailing as a high-tech annoyance or simply ignore it, members of the Automotive News World Congress dot-com panel agreed.
'Dealers have made a lot of money in the past 10 years and they don't want to fix something that's not broken,' said Dave Thomas, general manager of Thomas Motors in rural The Dalles, Ore.
But that attitude is dangerously complacent, panelists agreed, pointing to the huge transformation that the industry is just starting because of the Internet and other information technologies.
And not just in retailing. Buzz Waterhouse, president of Reynolds and Reynolds Co., estimated that the entire automotive 'value chain'- with its more than 1 million separate companies - could eliminate $40 billion in waste in one fell swoop.
That could be accomplished by better use of information technology and business processes that remove 'friction points' in the chain. Taking out these wasteful kinks and delays would result in annual savings of $10 billion, he said.
He said the auto industry needed to develop a corporate sense of urgency or face the same problems that Web start-ups are giving traditional booksellers and stock brokers.
SPEED IS CRUCIAL
'Speed is fundamental,' Waterhouse said. 'We can't afford to wait around as an industry. We'll get Amazon-ed or Schwabb-ed' out of business.
For automakers, building alliances with strong Internet companies will continue to be a key strategy. General Motors, which this month announced a partnership with America Online Inc., will continue to be a 'very, very aggressive' deal maker, said Ann Noel Blakney, national director of GM BuyPower.
GM will continue to refine and upgrade its BuyPower Web site with a goal of building an 'online car lot,' she said. Electronic coupons, access to dealer inventory information and online credit applications will help drive traffic to the site and bring more value to shoppers, she said.
But Web alliances don't necessarily mean exclusive relationships, said David Lundell, producer of automotive content for Yahoo! Inc. The Web portal announced a deal with Ford Motor Co. this month, but Lundell said there would be more deals with other automakers.
'The most important thing is that you're delivering something of value to consumers,' he said. 'That's the only way you're going to have a give-and-take relationship.'
Mary Jean Raab, senior vice president at Borders Group Inc., agreed. Consumers, for example, won't surrender e-mail addresses without a clear benefit in return. They also won't tolerate mediocre Web sites. She said a company must produce a Web experience that is 'on a par or better than competitors' Web sites.'
Thomas said dealers need to develop their own Web sales strategies and not turn over this role to lead brokers and other Web entrepreneurs. These Internet businesses are after more than just a transaction, he said. They want to find and keep customers in order to sell them loans, insurance, maintenance and other services.
But Thomas conceded that it was dealers themselves who left the door open to the Web brokers. Too many customers, he conceded, have been burned by sharp sales practices and poor service.
Thomas offered this advice to fellow dealers: 'Don't give our partners, the manufacturers, a reason to do business with someone else.'