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The Web: An Automakers' Headache.

The Internet is going to be a major factor that influences vehicle-buying behavior. No one in the auto industry can ignore it.

Already as many as 25% of all vehicle buyers make a stop on the Internet before they visit a car dealer. In fact, auto websites are among the most frequently visited sites, and researchers who study Internet trends say the number of hits is rising. The implications for auto companies are profound.

Automakers see the Internet as another form of media, and have developed websites with visual appeal as well as product specifications. But the Internet's real power is information.

Just a few years ago if someone wanted a review of a particular model, he or she would have to buy one of the many buff books or consumer publications. One of the most influential publications was, and still is, Consumers Reports. Its April issue summarizes quality ratings and has been a mainstay of car buyers for decades.

Pricing information could also be purchased at the newsstand in various guides. But getting the information took time, effort and a little bit of knowledge about where to find it. Buff magazines often overlooked mass-market cars in favor of unique, sporty vehicles, so there was less chance of getting the information around the time of purchase.

Now all of that information and much more are available with a few clicks of the mouse. The amount of auto information free to Internet users is amazing. The consumer is becoming informed about price, dealer invoice and the holdback.

But it isn't just price information that is out there for anyone to read. Auto companies have their own websites that provide attractive photos, specifications and pricing information. Dealers describe their services and encourage shoppers to ask for quotes and review their in-store inventory from the comfort of their homes. But even with all this "factory" data, it is the third-party information sources that will influence consumers as never before.

Editorial content at Carport, Edmunds and other websites focuses on professional reviews and comparisons among several models. One of their services is to provide reviews -- usually from more than one driver -- on the features, quality and overall appeal of various makes and models.

I've been fascinated by the number of reviews available and the no-holds-barred comments that many of them contain. Now automakers have to worry that a bad review on a popular Internet website could undo all of their marketing and advertising campaigns. No one is going to believe a 60-second advertising spot when two or three influential people complain about or point out the idiosyncrasies of particular vehicles. Furthermore, buyers don't want to have to defend their choice when the entire world can read about a vehicle's faults.

These reviews stay on the site for a year and are often supplemented with long-term assessments by the writers.

The Internet is going to be a major factor that influences vehicle-buying behavior. No one in the auto industry can ignore it. Expert opinion given over the Web is going to carry more weight than any paper-based publication. The best and only answer is, of course, to build flawless vehicles. The Internet isn't going to give companies a year to fix poor initial quality. Its power to make winners and losers among the hundreds of nameplates will grow and its influence is immediate and widespread.

My advice to everyone in Detroit is to log-on. You are in a new world of instant communication. Your sphere of influence over purchasing decisions is diminishing. No longer can anyone in the auto industry hope that a bad review becomes a bird cage liner or new puppy paper when the magazine is discarded. Reviews on the Web will pop up every time someone clicks on your product. If the critique is bad those browsers will surf on by.

Maryann Keller is managing director of the New York brokerage firm ING Baring Furman-Selz LLC.
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Author:Keller, Maryann
Publication:Automotive Industries
Geographic Code:1USA
Date:Jun 1, 1999
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