Third-party Internet car-buying services are facing pressure on yet another front.
According to a survey by EDS Automotive Retail Group, dealers are finding parity in the quality of Internet sales leads they receive from third-party buying sites and factory sites such as GMbuyPower.com. But there is one big difference in the sources: The automakers don't charge dealers for leads.
'If independent third-party providers don't have a substantially stronger value proposition, or benefit to the dealer than what the OEM is doing, usually for free, I don't understand how their business model will work in that environment,' said Matt Parsons, an EDS vice president of marketing.
`It didn't work'
John Dubosh, vice president of marketing at Balise Motor Sales of West Springfield, Mass., said his dealer group hasn't had much success using third-party sites.
'We did stick our toe in the water with some of the third parties to see if we were missing out on something,' Dubosh said. 'It didn't work for us, so we're back to just promoting and driving traffic to our own Web site, and that seems to work best for us.'
Balise Motor Sales will try a new Web-based lead generator for dealers, called Pick and Pass, that will debut on Edmunds.com, an automotive research site. Beginning March 1, new-vehicle shoppers will be able to contact dealers directly on the Internet from Edmunds.com, in effect bypassing third-party buying site links.
A consumer researching a vehicle on Edmunds.com will be able to complete and submit an online quick quote form. The form will be e-mailed automatically to participating dealers in the consumer's market area. But unlike leads offered from other sites today, dealers can review the lead information, including the person's ZIP code, before deciding to purchase them.
A dealer may pick the lead and contact the consumer or pass on it. The dealer that picks first will pay a $30 fee to Cobalt for the lead.
The tool was developed by Cobalt Group, a Seattle Internet technology company, and Respond.com, a technology provider in Palo Alto, Calif.
'What we like about it is that the dealers have a chance to have a direct relationship with the customer,' said Cobalt CEO John Holt. 'When they buy the lead, they get all of the customer information, and the customer hasn't come to them via a referral service.'
Said Dubosh: 'A huge factor in our signing up for Pick or Pass is that the consumer will be dealing directly with us as opposed to going through a third party.'
Dubosh - whose dealer group has Chevrolet, Chrysler, Jeep, Ford, Honda, Toyota, Lexus, Nissan, Saturn and Mitsubishi Fuso franchises in the West Springfield area - said he can base his decision to buy a lead from Pick or Pass on the customer's geographical location, whether he has the vehicle in stock, and whether he can readily obtain the vehicle if it is not in stock.
'If it's 500 miles away,' Dubosh said, 'we're not going to waste our time with it.'