The Internet is an Opportunity for Automotive Dealers - Not a Threat
20 September 2000
The Internet is an Opportunity for Automotive Dealers - Not a Threat
NEW YORK--Sept. 20, 2000--Over 80 percent 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 7,000 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 percent. This year's survey found that in the United Kingdom and the US, 94 percent of consumers are satisfied with car manufacturer appointed dealers. Independent dealers are also popular with consumers with satisfaction levels of 93 percent in Germany, 92 percent in the US and 90 percent in the UK.
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 cars and related products has increased greatly since last year and now stands at 70 percent or above. In the UK and US, 92 percent of consumers are happy with their purchases, with over two thirds of consumers 'very satisfied'. In France, 91 percent of consumers are happy, but only one third are 'very satisfied'. Generally satisfaction levels have increased since last year - up 153 percent in France, 113 percent in the UK, 73 percent in Germany and 31 percent in Sweden.
Internet usage has also increased since last year's survey. In the UK, Internet use is up 121 percent on last year, in France it is up 125 percent from a very low level of 12 percent. The countries with the highest Web penetration are Sweden (70 percent), the US (66 percent) and Holland (66 percent). Of the remaining markets, the UK has the most consumers using the Internet (51 percent), ahead of Germany (45 percent), Italy (40 percent) and France lags behind at 27 percent.
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 percent), the UK (70 percent), the US (65 percent) and Germany (53 percent) 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 personal advice, missing the shopping experience and wanting to see the car first. The US expressed a surprisingly high concern about security. It is the expectation of Cap Gemini Ernst & Young that security concerns will diminish greatly as consumers increase their usage and comfort with Internet purchasing.
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 percent to eight percent in the future. In Germany four percent will purchase cars over the Internet, compared to 0.7 percent now, and in France this is likely to increase from 0.1 percent to two percent.
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 percent) followed by those with a luxury car (69 percent).
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 people's preference for the touch and feel experience.
"When developing their Internet strategy car manufacturers must take the cultural differences between countries into account."