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Online Automobile Shopping in High Gear

13 April 2000

Online Automobile Shopping in High Gear

         Cyber Dialogue Finds That Cars are Third Most Popular Online
     Shopping Category, Even as Direct Online Purchases Remain Lethargic

    NEW YORK, April 13 More than 21 million Internet users
sought automotive information online in 1999, today reported Cyber Dialogue
(http://www.cyberdialogue.com), an Internet customer relationship management company.
Nearly doubling 1998's total, automobile shopping is now the third most common
product category sought online, behind only books and travel.  However, Cyber
Dialogue also found that direct online purchases remain rare: of the
8.4 million users who made a car purchase after seeking information on the
Internet, only 2% did so directly online.
    Internet comparison shopping sites are the most popular destinations for
auto purchasers who used the Internet for product research (63%), ahead of
both manufacturer sites (47%) and local dealer sites (26%).  While these
findings represent a potential threat to the dealer's role in the selling
process and the manufacturer's control over branding, Cyber Dialogue sees
significant opportunities for both entities in the online arena.
    "Manufacturers can regain control over their brands by orchestrating
online partnerships and fostering Internet capabilities on the local,
dealership level," stated Daphna Straus, an analyst at Cyber Dialogue.  "To
compete for the attention of prospective car buyers in a swelling sea of auto
sites, manufacturers must vigorously build, maintain, and protect their online
presence."
    Also at issue is the power of online research information to promote an
online purchase.  An overwhelming majority (87%) of digitally informed car
buyers completed their purchase in person at a local dealer.  This may be due,
in part, to a consumer's post-purchase dependence on the dealer for help with
maintenance and repairs.
    "The customer service aspect of the Internet is a leverage point that has
yet to be fully developed," added Thomas E. Miller, vice president, Cyber
Dialogue.  "Dealers can mitigate the loss of revenue to the Internet by
enhancing customer service online and understanding that online-educated
purchasers need to be treated with special care."

    Other Cyber Dialogue findings include:
    -- New car purchases informed by Internet research accounted for
       approximately $100 billion in spending; direct online sales of cars
       accounted for only $5 billion in spending.

    -- Online users search primarily for price quotes and model
       specifications, particularly as they relate to new vehicles.

    -- Automobiles are the product category most likely to have brand opinions
       shaped by the Internet -- among Internet educated auto purchasers, 55%
       reported a change in their brand opinion.

    The above findings are from Cyber Dialogue's American Internet User
Survey, fielded each quarter as part of Cyber Dialogue's Internet Consumer
Continuous Advisory Services. Sponsorship information can be obtained by
contacting Wayne Ballard at 212-651-7066 or wballard@cyberdialogue.com.
    Journalists who wish to sign up for Cyber Dialogue's mailing list to
receive updates of the company's most significant findings should visit:
http://www.cyberdialogue.com/resource/press/list.html.

    About Cyber Dialogue
    Founded in 1993, Cyber Dialogue (http://www.cyberdialogue.com) is an
Internet customer relationship management company that provides the tools,
data, and services that enable senior marketing professionals to identify,
segment, and target online consumers. The company's customer management
platform provides strategic consumer information, advanced database marketing
techniques (including tracking, targeting, and measurement software), and data
mining services to send the most relevant message to the right customers at
the right time.

    CONTACT:  Grant Sanborn of Cyber Dialogue, 212-651-7047,
              gsanborn@cyberdialogue.com