Online Automobile Market Continues Maturation

As the automobile industry tries to figure where the Internet fits in with its business model, market research has found that more dealers are going online, and consumers may actually prefer to interact online early in the shopping experience.

The Web presence of new-car dealers is at an all-time high, according to research by the National Automobile Dealers Association (NADA), which found the number of dealerships with Web sites increased to 80.3 percent, an 8.4 percent increase in the last six months.

Almost all (93 percent) of the auto sites surveyed by NADA are interactive, allowing the customer to send email, order online, or obtain financing. Only 42 percent of dealer Web sites allow customers to schedule a sales or service appointment. NADA’s study also found that two-thirds of those dealerships currently without a Web site plan to be online within the next six months.

When it comes to car shopping online, consumers have always used the Web as a place to do research before heading to an actual dealership. In fact, consumers’ reluctance to deal with auto dealers in person during the early stages of the car-buying experience extends to the Internet according to a recent survey by Friedman-Swift and The Cobalt Group.

The survey found that car shoppers who visit auto dealer Web sites prefer by an overwhelming majority to have dealers interact with them by email rather than telephone. According to Judy George, senior VP at Friedman-Swift, 82 percent of those surveyed preferred an email response to their initial online inquiries, while 10 percent expressed no preference, 7 percent asked for a return phone call, and only one percent requested a fax.

“Consumers are saying, loud and clear, ‘don’t call us’ — at least not at first,” George said. “Undoubtedly, most online car shoppers will end up speaking by phone or in person with someone at a dealership before they buy a car. But they prefer that these spoken interactions come a little later in the buying process.”

Consumers’ preferences to steer clear of personal interactions with salespeople may signal a change in the hiring practices of auto dealers.

“Rather than relying solely on salespeople with strong verbal skills to build relationships with customers, dealers will also need to have salespeople with strong writing skills,” George said. “To keep online shoppers interested, dealers must respond in a way that makes those shoppers feel comfortable, and do it in a timely fashion.”

The research also showed that 82 percent of the respondents would like dealers to respond to their requests for information in one day or less. About 55 percent of the dealers in the survey were able to respond in that time period, but 19 percent never responded at all.

The leads dealers get through their Web site also seem to be solid, according to the survey. Of the total sample, 77 percent intended to purchase a vehicle in the next year and 40 percent planned a purchase in the next two months.

Despite more use of the Internet early in the process, consumers are still reluctant to buy a car online without any human interaction, and they also like the idea of using online buying services to refer them to a dealer, according to research by Kenneth Hollander Associates.

The survey of 1,459 Internet consumers nationwide found that 8 out of 10 consumers prefer to be referred to a dealership by an online buying service. On a 1 to 10 scale, 79 percent rated the dealer-referral model between 8 and 10, and 44 percent rated the dealer-referral model the highest score of 10. In contrast, buying directly on the Internet without any dealer contact was rated a 10 by only 14 percent of those surveyed.

Other findings from the Kenneth Hollander survey include:

  • 76 percent of consumers feel that it is important to speak with a live person during the process of buying a car online
  • 41 percent used the Internet when shopping for their last vehicle
  • 56 percent plan to use the Internet as part of their next car purchase
  • 44 percent prefer to use the Internet to research purchase options before visiting a dealership.

Related reading

pokemon go