WASHINGTON - When it comes to selling new vehicles on the Internet, experience counts.
Dealerships with several years of experience using the Web are generating 20 percent of their new-vehicle sales from Internet leads, according to the latest statistics from the National Automobile Dealers Association.
'The more they work at it, the better they get at it,' said Paul Taylor, NADA's chief economist.
'There's a learning curve.'
NADA defines an Internet sale as a transaction generated from an online lead, an e-mail contact through the dealer's Web site or a contact through an online referral service. Most consumers use the Internet as a research tool, although more are using it to obtain auto financing and negotiate the sale.
Though NADA has surveyed dealership use of the Internet since 1997, this is the first year the group has dissected the sales figures based on how long a dealership has had a stand-alone Web site. Because newcomers have been in the mix, the overall average has been stuck at five new vehicles a month.
Dealerships that have been operating Web sites since 1995 close 13 new-vehicle sales a month from Internet leads, while stores that launched Web sites in 1999 or 2000 sell five new vehicles a month from Internet leads. The average dealership that responded to the study sells 759 new vehicles a year, or about 63 units a month.
Salespeople have to learn how to deal with a more informed customer because the Internet has created a more sophisticated car buyer. And dealerships have to overcome the chronic problem they have following up with prospective customers. Internet shoppers are much more demanding than walk-in traffic, expecting dealerships to respond the same day or even within a few hours to their online inquiries.
Internet expertise has had no impact on used-vehicle sales. The average for Web-savvy dealers and dealerships with brand-new Web sites is the same - three units a month. Used-vehicle sales simply haven't taken off as much as new-vehicle sales, most likely because customers want to kick the tires, Taylor said. The overall average has been stuck at three used-vehicle sales a month since NADA began studying dealers' Internet-related sales.
Dealerships have started to make progress using their Web sites to promote vehicle service. The average dealership attracted at least three new service customers a month, up from an average of two customers a month in the 1999 survey.
When dealers began offering Web sites several years ago, the focus was on vehicle sales, not service. But now many of them are advertising service specials on their sites or offering service reminders. A growing number of dealerships - 52 percent - allow customers to schedule service appointments online.
If dealerships promote service online, their Internet-related business will generate more profits because the service and parts end of the business yields fatter margins.
MORE WEB SITES
The number of dealerships operating Web sites has continued to grow. Eighty-three percent of dealerships have Web sites, up from 74 percent in 1999, 61 percent in 1998 and 47 percent in 1997.
The Web sites are a far cry from the static, online brochures dealers launched a few years ago when the industry was beginning to use the Internet. Almost all the sites allow customers to communicate with the dealership using e-mail, and almost all the dealerships responding said they answer online customer inquiries within 24 hours.
The majority of dealerships - 62 percent - said they have completed some sales online. These online transactions exclude vehicle delivery and payment. Though consumers have the ability to complete a transaction online - President Clinton signed a law this summer making digital signatures legal - this is still a rarity.
Dealerships also are adding more services continually to their sites. For example, about 83 percent of the Web sites allow customers to browse vehicle inventory online; about 70 percent of the sites offer links to a manufacturer's Web site; 56 percent allow shoppers to view the manufacturer's suggested retail price; and 48 percent allow prospects to schedule sales appointments.