Despite the overall downturn in vehicle sales, dealers on this year's Ward's e-Dealer 100 ranking report seeing significant increases in the number of Internet-generated leads the last few months.

What does this trend mean for the next few months, and what does it mean for dealers' businesses the next few years?

Some dealers believe the increase in leads portends a big summer selling season and they are ordering inventory, increasing advertising spend and taking time during the downturn to refine processes.

Justin Norwood, Internet manager for Tom Durant's Classic Chevrolet in Grapevine, TX, says the store is seeing more leads than ever. “I know that sounds weird, in a down market,” he says.

Classic, the top-selling Chevrolet in the U.S. for the last three years, ranks 39th on the Ward's list of dealerships with standout Internet operations, with 1,532 vehicles sold through the Internet in 2008.

Norwood says the latest leads mostly are Internet “tire kickers,” and aren't buying vehicles yet.

“They (prospective buyers) jump on the Internet and want to see how desperate we are to sell cars,” he says. “A lot of my guys get discouraged because they are doing nothing but following up.”

Some Internet consultants say an average dealership's employees should be able to handle 100-120 leads a month. “In the month of December, my guys were handling about 300 leads, because that's how many we had coming in,” Norwood says.

He expects the summer to be big. “Doing that now is what's going to make us huge this summer, when this does rebound,” he says. “We will be huge and unstoppable.”

Jim Dunn, vice president and general manager for JM Lexus in Margate, FL, says the Web represents an opportunity to network more. The dealership has seen Internet leads increase the last few months.

The Internet is a great spot to create more opportunities, Dunn says. “It is important to take advantage of every opportunity that's presented to us.”

He adds: “Times are difficult, but it's opened up our eyes and given us an opportunity to get back to the basics of what's important in our business.

“And that's taking care of every customer, in every department. Every customer deserves to be treated like an all-star, and now is the time for us to really wrap our hands around these folks and make them feel like all-stars.”

The dealership has been the top-selling Lexus store for 17 consecutive years. “My life depends on that every December,” Dunn jokes.

JM Lexus ranks 29th on the Ward's e-Dealer 100, generating 1,768 online new and used vehicles in 2008.

On the West coast, in Portland OR, Brent Hillyer, e-commerce manager for Ron Tonkin Family of Dealerships, says Internet leads also are up for his group.

“That shift we are seeing, we've been talking about it for a long time, a dramatic shift in our business,” he says. “In my opinion it's not that Internet business is up, our business is shifting.”

The Internet grew from 18% of Tonkin's overall business to 34% in February. “That sounds great, but it's also reflective of other parts of our business dropping,” Hillyer says.

The question, he says, is what is Tonkin doing to understand and shift its business to meet those demands? “If we don't meet those demands, someone else will,” Hillyer says.

“The chances of someone walking in cold to one of our showrooms that hasn't visited our website or not called our dealership are shrinking,” he says. “So we know that every point of contact needs to be captured, measured and followed up constantly.”

Hillyer does not believe there is a magic switch. “You have to use all the tools, that's the key. Whatever tool, or whatever website you have. It's a matter of using what you've got and leveraging them,” he says.

Tonkin ranked seventh on the Ward's e-list with 3,212 new and used sales online in 2008.

The group sees the shift as an opportunity to adapt and refine its processes.

“The challenge we all have with the current state of business is trying to figure out how we either die, mutate or leap ahead,” Hillyer says. “Which direction will we go?

“The opportunity now is how we leap ahead and take the processes we've learned the last few years and technologies that are out there and adapt them for our overall business.”

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