Car Dealers Sharpen Internet Skills.

METUCHEN, N.J.--(BUSINESS WIRE)--October 26, 1998--Although an estimated 60 percent of the nation's franchised new car dealers have established Internet Web sites, questions still abound about the effectiveness of this medium for selling big-ticket items like automobiles. Accurate information about the number of vehicles actually being sold on-line has proven elusive. What little data does exist suggests that consumers are using the Internet primarily to gather background information prior to visiting a dealership in person. In effect, they are using the Web to do some electronic window shopping.

With the car dealers shelling out thousands of dollars a month to maintain their Web sites and additional thousands for sales leads from Internet buying services like Auto-by-tel, DealerNet, and Microsoft's CarPoint, there is little wonder that the dealers are disturbed over the inability to measure the success of their Internet efforts. Some dealers are going so far as to cancel their agreements with the buying services and rethink their entire Internet marketing strategy.

To counter this trend, the buying services are hard at work developing new ways to deliver value to their auto dealership subscribers. Microsoft's CarPoint, for example, will soon be releasing its version 3.0 with several changes to make the service more useful for both auto dealers and their customers.

Angie Brown, CarPoint's director of dealer programs, says that version 3.0 "will go beyond the buying process and extend to the customer's ownership experience." Customers buying cars through CarPoint will get on-line service and maintenance reminders, consumer alerts, information on product recalls, and CarPoint will even provide regular updates on the trade-in value of the consumer's vehicle as it ages.

"From the dealer's standpoint," says Ms. Brown, "the old model of using the Internet to generate sales leads just wasn't working. Consumers weren't filling out the lead forms." For prospective used vehicle customers, the new version of CarPoint will feature a discount voucher worth up to $500 off the price of a used vehicle. Ms. Brown says that 35 percent of the CarPoint customers who go to a dealership with the discount voucher buy a car from that dealership.

Other dealers are turning to consultants for new ideas. The Cobalt Group of Seattle is the nation's largest provider of Internet marketing solutions for auto dealerships. Cobalt provides dealer Web site services to four of the five largest dealership groups including AutoNation USA, United Auto Group, the Hendrick dealerships, and Planet Automotive.

In order to build value into its services, Cobalt offers a wide range of technical enhancements for dealers and consumers. AdWizard is a dealer-controlled on-line advertisement builder, AutoShow provides a searchable inventory system for new and used vehicles, and Traffic Reporter, an on-line traffic log. In addition, Cobalt owns and operates DealerNet, the first auto buying service on the Internet.

Earlier this year, Cobalt Group launched PhonEdge which lets auto dealers place personal voice messages, special advertisements, and even radio commercials on their Web sites. John Holt, Cobalt's co-CEO, says, "This will have an enormous impact on the Web by letting dealers talk directly to their customers and update their sites instantly."

Automobile dealers interested in providing more value through their Internet Web sites will be gathering in Nashville, TN, to hear industry experts offer their ideas at the Auto Retailing on the Web conference. The meeting is sponsored by WD&S Publishing of Metuchen, NJ, and will be held November 16 and 17, 1998 at the Renaissance Nashville Hotel.

WD&S Publishing is a provider of information services for automotive dealerships and produces the industry publications Auto Retailing on the Web, Dealers Edge, Warranty Dollars & Sense, Fixed Coverage, and The Parts Manager.

Details of the Auto Retailing on the Web conference including speaker names, topics, and on-line registration information can be found at www.dealersedge.com.