The document discusses the online car industry, including major players like lead generators (CarPoint, Autoweb), direct sellers (AutoNationDirect, CarsDirect), and hybrid models (Autobytel). It outlines the business models of lead generators, direct sellers, and hybrids. Samples of company websites are shown and customer demographics and quotes are provided. Strategies for attracting, retaining, and providing value to customers in the online car space are also examined.

1. The Online Car Industry
- Kanyi Masembwa
- Mohd-Ridzwan Nordin
- Preethi Parameswaran
- Andrew O’Shaughnessy

2. Major Players in Online Cars
Lead Generators
Microsoft’s CarPoint
Autoweb.com
Cars.com
Carclub.com
Direct Sellers
AutoNationDirect.com
CarsDirect.com
CarOrder.com
DriveOff.com
Greenlight.com
Hybrid
Autobytel.com
Source: Wall Street Journal, January 24, 2000, B1

3. Basics
 Lead Generator
 Pass on customer inquiries to dealers and offer Internet training to sales
staff
 Select car, pick options, dealer price comparisons, dealer
recommendations
 Direct Seller
 Consumers can buy and sell directly from their computer
 Login, select car, financing options, arrange delivery or pickup
 Hybrid
 Lead Generator and “Click & Buy” option
 Allows Research and Dealer Recommendations, Research and Direct
Purchase, or Click & Buy

4. A Sample Front Page – carOrder.com

5. Lead Generator - Sample Front Page

6. Hybrid - Sample Front Page

7. Customers
 Buyers/Sellers
 Leisure/Sporty customers
 First time buyers
 Repeat customers
 Business people
 Price sensitive people
 The .com race for a fraction of the 1999 $350 billion auto
market could have profitable awards
 2.7% of new vehicles sold via internet in 1999 , increasing
to 5% in 2000 -J.D. Power

8. Customer Quotes
"I am very impressed with your page. It is
very informative and useful. I know now
where I will look first when looking for that
right car! Keep up the great work."
– Al Cars.com customer
“Better Price, not having to deal with a
salesperson, and we got just what we
wanted.” Anthony & Heidi Wong – CarOrder customers
“For the First time in my life, I hugged a car
sales person.” Wanda – Autobytel customer

9. Attracting Customers
• Discounts
• Additional features/maintenance
• Referral (word of mouth)
• Offer incentives for free cars
• Online research library (Autobytel)
• Weekly automarket reports (Autobytel, Autoweb)
• Financing online (Autoweb – through
peoplefirst.com)
• Blue book value of used cars

10. Value Added
• Reminder emails for oil change/maintenance
• Special discounts on services/parts
• Service car anywhere
• Home delivery
• Free and convenient delivery service
• Place advertisements to sell cars
• Saves time
• Free mailing lists
• Test drive reviews
• Search process easier

11. Value added cont’d
 Lemon check done
 Subsidized leases (edmund.com)
 Safety auto information (edmund.com)
 Consumer reports
 Competitive prices
 Community building with CarTalk’s Click &
Clack (Cars.com)

12. Price Comparison BMW 323i
 bmwusa.com $29,485
 CarOrder.com $25,425
 CarDirect $26,976

13. Legal Impediments & Pricing Strategies
 In TX, lobbyists have caused the tightening of
franchise laws to further restrict efforts to sell cars
without dealers. CarsDirect, Corder, and
Autobytel cannot sell in TX.
 Lead Generators originally placed their businesses
on dealers’ ignorance of the internet. 1
 Possible shift from MSRP to cost-plus pricing.
Consumers are well informed of wholesale price. 2
1 Wall Street Journal, January 24, 2000, B1
2 Ibid A4.

14. Trying the product
 Promotions
 Free maintenance
 Build your own car (Free customization)
 Free Delivery
 Free Research
 Convenience of Virtual Customization

15. Retaining customers
 First time customers into repeat customers
 Referrals
 Strong customer relationships throughout
process (research, buying and servicing)
 On maintenance plan, customers are
committed to an ongoing relationship
 Near instantaneous price quotes
 Bypassing dealer sales personnel