Auto Manufacturer’s on the Net

Auto Manufacturer’s on the Net

The Internet provides manufacturers with an opportunity to communicate directly with the consumer. To some degree, it bypasses the dealer network, allowing the manufacturer to send a message directly to the public. To illustrate some of the Internet uses that major manufacturer’s devised, let’s examine the Chevrolet site (www.chevrolet.com) or for those of you who do not subscribe to the buy American philosophy, check out Toyota’s site (www.toyota.com).

On the Chevrolet site, one finds extensive information on the different models that the company offers. One can examine the specifications of each model; if you prefer to view a paper-based description, you may even download and print a brochure. After looking through the literature on various models, you can configure a vehicle with the specifications that you want and view the manufacturer’s suggested retail price for that vehicle (you can even see the suggested cost for adding or subtracting a particular accessory). While you cannot buy a vehicle online, the website does direct you to a dealer in your area.

Dealers on the Net

While the individual dealer’s have websites offered through GM BuyPower, many local dealers maintain their own websites. For example, the local Chevrolet dealer, Jim Price, has its own website separate from the GM BuyPower website.
At this site, the consumer can browse through Jim Price’s inventory and see pictures of the different cars on the lot. Interestingly, while the website provides information on availability, it does not offer online pricing information—at least for new cars. However, if the buyer wants a price, he can fill out a brief questionnaire detailing the vehicle he would like to purchase as well as some personal information; the dealer will then contact the individual with a price quote. The website also offers a number of customer friendly tools, such as a monthly payment calculator. As the dealer does more than just sell cars, it uses the website to allow car owners to make appointments to service their vehicles and order spare parts.

Auto Referral Services

While the Internet is another channel for manufacturers and dealers to interact with customers, it has allowed the creation of a new category of intermediary: referral services, such as Autobytel (www.autobytel.com). These services assist car-buyers in researching different brands and models. Moreover, these services allow the user to place an order for a particular car and receive a quote. The referral service does not actually fulfill the order, though. Instead, it will pass your order through to a dealer in your vicinity. With the quote in hand that you received from the dealer, you can walk in and pick up your car without negotiating (source www.carbuyingtips.com).
The online referral services add value by eliminating the dealer’s asymmetric information advantage. In a certain sense, they are adding another middleman between the customer and the manufacturer, which on one level runs counter to everything that the Internet supposedly represents. However, they provide significant value over the old dealer driven distribution channel, in that they provide value-added information to the customer. These sites allow their customers to know the lowest price that the dealer is willing to offer. In return for providing referrals to the different car dealers, the referral services receive a fee. The following excerpt from Autobytel’s 10-K provides additional information on the firm’s business model:
“Consumers can purchase new vehicles through our dealer referral network and our locate-to-order service, AutobytelDIRECT SM . When consumers indicate they are ready to buy a vehicle, they can be connected to our network of over 4,800 participating dealers in North America, of which over 3,500 are Autobytel.com® dealers and over 1,300 are CarSmart.com SM dealers, with each dealer representing a particular vehicle make. Approximately 400 dealers subscribe to both the Autobytel.com and CarSmart.com services. Dealers participate in our network by entering into non-exclusive contracts with us. We expect our dealers to promptly provide a haggle-free, competitive offer. Fees paid by our participating dealers constitute the majority of our revenues.” (2000 10-K)
For more information, on the Autobytel’s business model view their 10-K filed with the SEC at http://www.autobytel.com/content/framed/index.cfm?id=4;4&action=InvestorRelations.

Information Services

While a number of the auto referral services also provide information on different car models, there are a number of independent information providers. For example, Consumer Guide offers consumers information on different makes and models of cars. For these services, like the auto-manufacturers and dealers, the Internet is simply another channel for reaching customers. They, too, play an important role in informing the customer, though as a general rule, they do not provide the same pricing information.

Conclusion

As the plane touched down in Rio, Marcos made a mental list of the questions that he needed to answer. First, what role do cultural differences play in establishing a B2C automobile Internet strategy in different countries? What should GM’s Internet presence look like in each of these countries in five years? How should GM use the Internet to reach consumers in other countries? Finally, Marcos hoped to determine some of the key components of a B2C strategy regardless of industry.

Exhibit 1

GM CELTA

Exhibit 2

Directory: Ebusiness
Ebusiness -> Computing Productivity: Firm-Level Evidence

Download 105.81 Kb.

Share with your friends: