NEW YORK – Major car dealers at an automotive conference here says the Internet is an established part of auto retailing but can hurt profits when price-conscious consumers use it to play dealers off each other.
In such cases, “I’m not sure the Internet is so beneficial,” says Ed Tonkin, chairman of the National Automobile Dealers Assn. and co-owner of the Portland, OR-based Ron Tonkin Family of Dealerships.
“What’s the point of the Internet if you see competitors selling cars hundreds of dollars under invoice?” he says at an auto symposium put on here byand IHS Global Insight.
The Internet is “not going anywhere,” says Earl Herterberg head ofAutomotive Inc. based in Houston.
“We need to deal with it, but what can dealers and manufacturers do to make the Internet a motivator of profit so that there aren’t so many $100 car deals out there,” he says.
Surveys indicate up to 90% of car buyers go online as part of the shopping process. They spend a lot of time researching vehicles. Many of them are armed with information as they enter the dealership.
“Is it good that the customer may know more about a vehicle than the sales person does?” Tonkin asks.
Despite the challenges the Internet poses to car dealers, “it’s a net positive,” says Susan Scarola, president and CEO of DCH Auto Group based in South Amboy, NJ
“There is an old saying that the educated consumer is the best customer,” she says. “It’s true. I want that customer. They will be less sensitive to price and more sensitive to the quality of service.”
During online car shopping, many Internet users will change their minds about a make and model in which they initially showed interest, says Michelle Morris, Google’s director-automotive industry.
With so many nameplates on the market, search engines in general and Google in particular are “great places to start research,” she says
“The more relevant your message, the more it will rise to the top,” she tells automotive marketers. “Search is very democratic.”
But it only can take car shoppers so far, Tonkin says. “I use Google every day, but not to buy cars.”
Nor is it likely the Internet will make brick-and-mortar car dealerships obsolete, Hesterberg says. “You can’t avoid physical representation.”
Tonkin says Internet leads are most important to his dealerships, “but we have to figure out how to better deal with them.”
Dealers also are trying to figure out the best way to use social-media websites to their advantage.
Tonkin notes that at theconvention in Orlando, FL, this year, social-media workshops had standing-room-only attendance.
“It’s not something I’m interested in,” he says. “But younger people at our dealership are interested in it.”
To succeed today, a dealership needs a social-media presence, Scarola says. “The Internet has a global reach. But the customer I want lives close to the dealership. We need to establish a relationship with that person. Social media does that.”
She says her daughter used the Internet to buy a car after doing research and looking at online photos.
“I said, ‘Aren’t you going to drive it before you buy it?’ She said, ‘Why?’”
Tonkin finds that amazing. “You are a dealer, and your daughter bought a car over the Internet?” he asks Scarola.
She replies: “Well, she bought it from me.”