αυτοκίνητα

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.  Lead GeneratorLead Generator
 Pass on customer inquiries to dealers and offer Internet training to salesPass on customer inquiries to dealers and offer Internet training to sales
staffstaff
 Select car, pick options, dealer price comparisons, dealerSelect car, pick options, dealer price comparisons, dealer
recommendationsrecommendations
 Direct SellerDirect Seller
 Consumers can buy and sell directly from their computerConsumers can buy and sell directly from their computer
 Login, select car, financing options, arrange delivery or pickupLogin, select car, financing options, arrange delivery or pickup
 HybridHybrid
 Lead Generator and “Click & Buy” optionLead Generator and “Click & Buy” option
 Allows Research and Dealer Recommendations, Research and DirectAllows Research and Dealer Recommendations, Research and Direct
Purchase, or Click & BuyPurchase, or Click & Buy
Basics

4. A Sample Front Page – carOrder.com

5. Lead Generator - Sample Front Page

6. Hybrid - Sample Front Page

7. Customers
 Buyers/SellersBuyers/Sellers
 Leisure/Sporty customersLeisure/Sporty customers
 First time buyersFirst time buyers
 Repeat customersRepeat customers
 Business peopleBusiness people
 Price sensitive peoplePrice sensitive people
 The .com race for a fraction of the 1999 $350 billion autoThe .com race for a fraction of the 1999 $350 billion auto
market could have profitable awardsmarket could have profitable awards
 2.7% of new vehicles sold via internet in 1999 , increasing2.7% of new vehicles sold via internet in 1999 , increasing
to 5% in 2000to 5% in 2000 -J.D. Power-J.D. Power

8. Customer Quotes
"I am very impressed with your page. It is"I am very impressed with your page. It is
very informative and useful. I know nowvery informative and useful. I know now
where I will look first when looking for thatwhere I will look first when looking for that
right car! Keep up the great work."right car! Keep up the great work."
– Al Cars.com customer– Al Cars.com customer
““Better Price, not having to deal with aBetter Price, not having to deal with a
salesperson, and we got just what wesalesperson, and we got just what we
wanted.”wanted.” Anthony & Heidi Wong – CarOrder customersAnthony & Heidi Wong – CarOrder customers
““For the First time in my life, I hugged a carFor the First time in my life, I hugged a car
sales person.”sales person.” Wanda – Autobytel customerWanda – 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 doneLemon check done
 Subsidized leases (edmund.com)Subsidized leases (edmund.com)
 Safety auto information (edmund.com)Safety auto information (edmund.com)
 Consumer reportsConsumer reports
 Competitive pricesCompetitive prices
 Community building with CarTalk’s Click &Community building with CarTalk’s Click &
Clack (Cars.com)Clack (Cars.com)

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

13. Legal Impediments & Pricing Strategies
 In TX, lobbyists have caused the tightening ofIn TX, lobbyists have caused the tightening of
franchise laws to further restrict efforts to sell carsfranchise laws to further restrict efforts to sell cars
without dealers. CarsDirect, Corder, andwithout dealers. CarsDirect, Corder, and
Autobytel cannot sell in TX.Autobytel cannot sell in TX.
 Lead Generators originally placed their businessesLead Generators originally placed their businesses
on dealers’ ignorance of the internet.on dealers’ ignorance of the internet. 11
 Possible shift from MSRP to cost-plus pricing.Possible shift from MSRP to cost-plus pricing.
Consumers are well informed of wholesale price.Consumers are well informed of wholesale price. 22
1 Wall Street Journal, January 24, 2000, B11 Wall Street Journal, January 24, 2000, B1
2 Ibid A4.2 Ibid A4.

14. Trying the product
 PromotionsPromotions
 Free maintenanceFree maintenance
 Build your own car (Free customization)Build your own car (Free customization)
 Free DeliveryFree Delivery
 Free ResearchFree Research
 Convenience of Virtual CustomizationConvenience of Virtual Customization

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