DETROIT -- Years of mistakes, missteps and mishaps have helped the auto industry figure out how to harness the raw power of the Internet. Now comes the task of refining it, an Automotive News World Congress panel on Internet strategies agreed.
Gary Marcotte, senior vice president of marketing for AutoNation Inc., said the big retailer used to spend a lot of money doing "cool stuff" on the Internet that made little business sense. Now AutoNation uses the Net only to offer customers choice and information that will lead to a vehicle sale, he said.
"Our hearts were in the right place," Marcotte said. "We were organized around customer choice and all these opportunities. But what we didn't do is connect with the transaction."
The company, which generated revenue of $19 billion in 2004 from its 281 stores, also has changed its site to allow browsers to search for vehicles across brands. Customers that search specifically for a Toyota might be shown a Honda or Nissan vehicle in that segment as well, Marcotte said.
"That's what consumers want - more choice," he said.
Finbarr O'Neill, CEO of Reynolds and Reynolds Co., pointed out that the Internet can help cut dealership costs because it eliminates the need for in-store computer servers and the expense that accompanies that hardware.
The dealership software specialist works with automakers and their dealers to create "brand-compliant" Web sites, O'Neill said. That means installing factory graphics for the dealer's home page and a factory search engine for inventory and products.
"It's critical for OEMs that they and their dealers present the brand to consumers clearly and consistently," O'Neill said.
Dean Eisner, CEO of Manheim Auctions Inc., said the Internet provides the infrastructure for much of what the big auction company does. He said the company offers its wholesale vehicle-pricing tool, Manheim Market Report, online and operates several Internet channels to help customers sell their vehicles.
Manheim's Online Vehicle Exchange is for sales prior to vehicles reaching the physical auction site, he said, while Simulcast allows dealers to participate in live auctions remotely. Online bids are recognized and recorded in under a quarter of a second, he said.
"Embracing the Internet is something that is important to us," Eisner said.
John Holt, CEO of Cobalt Group Inc., an automotive Web services company, said the benefits of the Internet in its early days were exaggerated greatly. Now, its long-term impact has been underestimated.
Holt said the number of U.S. Internet users has exploded from about 95 million five years ago to about 202 million in 2005.
He said 67 percent of auto buyers research their purchase online prior to visiting a dealership, while the impact of Internet search tools Google and Yahoo! is evolving "fast and furious."
By buying a presence on Google for as little as 10 cents per click, Holt said, dealers can get more bang for their ad dollar than they can from spending thousands of dollars to buy the back page of their local newspaper.
Dealerships are becoming faster at answering customers who contact the dealership online, Holt said, but the industry has a long way to go.
"When we started, we coached people to answer e-mail within 24 hours," Holt said. "In 1995 that was OK. To be competitive now, that needs to be within 60 minutes. If you really want to be competitive, it's got to be 30 minutes or less."
David Schembri, executive vice president of sales and marketing at Mitsubishi Motors North America Inc., said the company uses the Internet to help launch vehicles.
Last summer Mitsubishi ran a promotion on Yahoo! offering a virtual test drive of the 2006 Eclipse. The promotion attracted 1 million hits in a 24-hour period and about 7,000 sales were traced to the effort, Schembri said.
"We exceeded our most optimistic forecast," he said.
About 10 percent of Mitsubishi's marketing is done via the Internet, Schembri said, and "that has the potential to double in 2006."
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