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Online competition will search for car

"Anyone sceptical about the potential influence of digital technology on the motor industry should look to other industries and see the potential.

Mobile phone manufacturer Ericsson and service provider Virgin Mobile have unveiled a coinless vending machine which enables a mobile phone to be used to order. The phone account takes the charge.

Internet technology is already starting to have the same effect on the retail motor industry. But the changes have only just begun. Well-funded businesses such as OneSwoop.com allow UK car buyers to get cars from franchised dealers in mainland Europe.

It is only a matter of time before more services and more dealers join in.

By the end of next year, we will see 'intelligent search agents' coming to the fore. Car buyers will be able to define precise vehicle requirements and instruct their search agent to find the best price in Europe - and where they could buy it most quickly. Customer empowerment will have reached new heights and dealer control plunged new depths.

But that is just the start. It is only a matter of time before online car buyers are ordering direct from the factories.

In this issue's Technology Made Easy supplement, we report how it is already possible to configure an Audi or a Jaguar on the manufacturer's website.

Car buyers can keep track of the price as they personalise their car and see exactly how it will look as they add options and select colours.

This creates a question about the dealer. For the moment, these highly qualified sales leads are passed over to the relevant local dealer. But Mercedes-Benz has already taken the next step in Germany.

Online car buyers can specify and order their cars direct. Mercedes-Benz 'sales partners' are paid a fee for delivering the car. It would be naïve to even assume that dealerships are necessarily going to be the only sales partners.

Cyber-dealers such as Virgin Cars and Jamjar already have delivery fleets and could serve the same role.

Many questions remain unanswered. But one thing is clear. Franchised dealers are quickly going to lose their total dominance of motor retailing. Many will die.

The ones that thrive will be those that use technology with imagination to address the real challenges of a sales system that is looking increasingly inefficient, outdated and wasteful. Just like Virgin and Ericsson have done with canned drinks.

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