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Auto Dealers Add Web Sites, Sales Slow to Follow

6 October 1998

Auto Dealers Add Web Sites, Sales Slow to Follow

    WASHINGTON, Oct. 6 -- The number of auto dealerships
operating Web pages increased by 8 percent in the last year, but sales of
vehicles through those sites have been slow to develop, according to the
National Automobile Dealers Association.
    Results from an NADA survey show that 61 percent of franchised new-car and
truck dealers now have their own Web pages, up from 53 percent one year ago.
Those dealers report selling an average of 5.3 vehicles per month through the
Internet, up only slightly from 5 vehicles per month last year.
    While consumers may not be buying over the Web, NADA's survey found that
they are doing a lot of looking. Fifty percent of dealers' sites get 1-50
"hits" per month, up from 46 percent last year. Nearly 10 percent of
dealership Web sites get more than 500 "hits" per month.
    "The slow growth of Internet vehicle sales signals that many customers
still regard purchasing through the Internet as risky," said NADA's Chief
Economist Tom Webb.
    In response to customer concerns, 65 percent of dealerships have a trained
salesperson to specifically handle prospects generated from the Web page.
    Seventy-three percent of dealerships indicate that customer salisfaction
is the same for Internet customers as for traditional buyers, while 13 percent
report an increase in customer satisfaction for Internet shoppers. The 14
percent of dealerships reporting lower satisfaction for their Internet
customers typically lacked a dedicated Internet salesperson or failed to
update their Web site regularly.
    Sales success may also be linked to the frequency of Web page updates.
Dealerships that updated their sites on a daily basis sold an average of 7.2
vehicles per month. Sites that were updated once a week produced an average
5.4 sales per week, while sites updated only once a year resulted in 4.2 sales
per month.
    The National Automobile Dealers Association represents more than 19,600
franchised new-car and -truck dealers holding nearly 40,000 separate
franchises, domestic and import.