In the late 1990s, many U.S. franchised car dealers felt threatened by the Internet, fearing it would be used by others to bypass them in the marketplace.

But today, most U.S. franchised dealers, more than their foreign counterparts, now like the Internet, and hardly worry about it or any other alternative sales channel hurting their strong hold on automotive retailing.

That's according to a new survey, “Cars Online 2002,” by Cap Gemini Ernst & Young.

The study's researchers report on how the Internet is fueling an increasingly competitive car market and what the future looks like for the Internet in the automotive industry.

The survey covers eight global markets: U.S., U.K., Germany, France, Italy, Sweden, Benelux and Japan. A total of 2,500 customers were surveyed. Also interviewed were 10 OEMs and 100 dealers from each country.

U.S.-Specific Key Findings:

  • U.S. dealers are very positive about the Web. Nearly 80% regard it as a business opportunity; only 5% consider it a threat.

  • Internet dealers are responsible for 1% of car sales in the U.S., the highest of any country studied. A reason: the online channel is more advanced than elsewhere.

  • U.S. dealers show little concern about new sales channels' potential overall impact on their business. This may reflect franchised dealers' strong position in the U.S. As the Internet has not significantly hurt their hold on the market, they may feel confident in overcoming alternative retailing channels.

  • 90% of dealers and manufacturers believe the Internet has created a new breed of better-educated consumers, making the marketplace more competitive.