Modern Automotive, which holds Toyota, Nissan and Chevrolet franchises in North Carolina, claims its AutoNetSelling programme achieves a 9.8% conversion on internet traffic for dealers.
Kevin Charlton, BTC sales director, said the “Virgin-type” internet model to sell cut-price cars would not work. AutoNetSelling would empower dealers to do everything on the internet themselves, rather than relying on companies like Autobytel.
“No-one has mastered internet systems yet - we are offering a complete solution to dealer groups,” he said. “We take the existing website and implement a training programme to help the dealer to create a virtual showroom that interacts with the rest of the dealership.”
In the US, 80% of AutoNetSelling's internet customers never see the car before taking delivery.
“At the moment, UK dealers are achieving minimal conversions on website enquiries,” said Mr Charton. “And most of these are not true internet sales - they are leads forwarded to the dealership for a salesman to convert.”
Omnia Fowler, chief operating officer of AutoNetSelling, said that in terms of internet development and usage, the UK market was in a similar position to the US around five years ago. “We expect it to catch up quickly,” he added. Modern Automotive has been online for five years, raising sales from 160 units to around 900 last year (80% new cars), on the back of the training programme.
The firm's AutoNetSelling programme creates a virtual showroom that filters out the good leads from the bad. Some 300 US dealers have used the system since launch in October.
Mr Fowler said AutoNetSelling “teaches dealers how to create their own leads” by using their existing internet investment. Dealers are shown how to analyse, measure and monitor their website, using individually tailored onsite and classroom training, usually lasting 12 months.
Mr Charlton said: “It is essential to train and get the commitment from all dealership staff.” AutoNetSelling could quicken the pace of change for online retailing by diluting the need for intensive dealership representation across the country. Modern Automotive relies on a mix of virtual showroom - employing 10 or so people in a small room to handle enquiries - and existing premises to boost its sales. UK dealers could follow suit, achieving nationwide coverage without the need for national expansion.
Mr Fowler said: “Our gross profits on the internet are the same or higher than in our showrooms. Not only that, but our CSI has increased as well - you can sell a vehicle within minutes of an initial enquiry.
“The internet is not cannibalising our own sales - it is providing incremental business so our total sales have increased significantly.” He added: “We also have a slick system in place for managing the leads and we have found a way to do 'blind' part-exchanges that has reduced the risk of getting burned.” The system involves customers filling in and signing an appraisal form assessing the condition of their part-exchange. It has proved to be a reliable process.
Mr Fowler dismissed suggestions that carmakers may react against AutoNetSelling, as it could empower dealers to sell outside their franchise area. “We've not found it an issue with merging franchises via the internet, because the system is raising sales for both manufacturer and dealer,” he said.
BTC would not be drawn on likely costs, though Mr Charlton claimed dealers need only sell one car a month to recoup the monthly fee. “We are offering manufacturers or dealer groups an opportunity to take the bull by the horns, to go to the forefront of online retailing and compete against internet companies like Virgin Cars,” he said.
“Dealers can't wait for other companies to take the lead - AutoNetSelling gives them the tool to exploit internet opportunities by effectively creating an internet department within the dealership.” BTC is talking to a number of dealer groups and manufacturers with a view to begin implementing the programme this month.