The Internet is an Opportunity for Automotive Dealers - Not a Threat
18 September 2000
The Internet is an Opportunity for Automotive Dealers - Not a Threat
PARIS--Sept. 18, 2000--Over 80 per cent of car buyers are satisfied with their experience of buying cars through the dealership network. This is a key finding from the global Online Car survey of over 7000 consumers in Europe and the United States of America carried out by Cap Gemini Ernst & Young, one of the largest management and IT consulting firms in the world.The overriding conclusion is that the future for the car industry is not pure dot.com - the dealer will still have a significant role to play.
In fact, the popularity of dealers among consumers has increased since a similar Cap Gemini survey last year that found satisfaction levels of just over 70 per cent. This year's survey found that in the United Kingdom and the US 94 per cent of consumers are satisfied with car manufacturer appointed dealers. Independent dealers are also popular with consumers with satisfaction levels of 93 per cent in Germany, 92 per cent in the US and 90 per cent in the UK. (Appendix 1)
Pierre Durand, head of global automotive at Cap Gemini Ernst & Young, said, "This increase in dealer popularity is likely to be a result of dealers improving their customer relationship management to compete with the new entrants into the market, and in particular internet car sites."
"But car dealers and manufacturers cannot rest on their laurels. Although the new channels will not replace the traditional dealership network they will make the market a lot more challenging and they are being increasingly accepted by consumers."
Satisfaction with on-line purchases of car and related products has increased greatly since last year and now stands at 70 per cent or above. In the UK and US 92 per cent of consumers are happy with their purchases, with over two thirds of consumers `very satisfied'. In France 91 per cent happy, but only one third are `very satisfied'. Generally satisfaction levels have increased since last year - up 153 per cent in France, 113 per cent in the UK, 73 per cent in Germany and 31 per cent in Sweden. (Appendix 2)
Internet usage has also increased since last year's survey. In the UK internet use is up 121 per cent on last year, in France it is up 125 per cent from a very low level of 12 per cent. The countries with the highest web penetration are Sweden (70 per cent), the US (66 per cent) and Holland (66 per cent). Of the remaining markets, the UK has the most using the internet (51 per cent), ahead of Germany (45 per cent), Italy (40 per cent) and France lags behind on 27 per cent. (Appendix 3)
Across all countries, consumers are tending to use the internet to gather information rather than buy. Finding the best price was the main factor motivating people in all countries to browse car sites. The majority of car users in France (73 per cent), the UK (70 per cent), the US (65 per cent) and Germany (53 per cent) will be using the internet to gather information on products and services over the next 12 months.
Pierre Durand said, "Car-related internet sites will become an excellent new service for dealers and consumers so they should be a priority for car manufacturers trying to find a competitive edge."
The main reasons why consumers avoid buying online are the desire for personalise advice, missing the shopping experience and wanting to see the car first. The US is unusual in that payment security issues are rated an important deterrent by 57 per cent of consumers. (Appendix 4)
The number of car buyers willing to purchase online varies greatly between countries. In the UK a big leap is expected from the current figure of 0.1 per cent to eight per cent in the future. In Germany four per cent will purchase cars over the internet, compared to 0.7 per cent now, and in France this is likely to increase from 0.1 per cent to two per cent.
Socio-economic factors and in particular the type of car driven influences internet use. Consumers with a sports car were most likely to use the internet (78 per cent) followed by those with a luxury car (69 per cent) (Appendix 5)
Pierre Durand concluded, "It is wrong to look at the internet as a substitute for traditional sales. It should be seen as an integrated part of the consumer buying process. Consumers will use the internet to make the buying process more efficient, but it will not overcome peoples preference for the touch and feel experience.
"When developing their internet strategy car manufacturers must take the cultural differences between countries into account."
Note to Editors:
This On-line Car Retailing Survey is a global survey with a sample of 7000 across the US, UK, Italy, Germany, France, Sweden, Holland and Belgium.
An executive summary and graphs from the Survey is available from Cath Gilbert at Cap Gemini Ernst & Young (email: cath.gilbert@capgemini.co.uk)
Cap Gemini Ernst & Young is one of the largest management and IT consulting firms in the world. The company offers management and IT consulting services, systems integration, and technology development, design and outsourcing capabilities on a global scale to help traditional businesses and "dot companies" continue to implement growth strategies and leverage technology in the new economy. The organization employs more than 56,000 people worldwide and reports global revenues of 7.7 billion euros (1999 pro forma).
More information about individual service lines, offices and research is available at www.cgey.com