Technology will be one of the main battlefields for motor retailing in 2002, giving new entrants a foothold in the market and dealers a way to fend off competition.
Newcomers like OneSwoop, Virgin and Direct Line (Jamjar) have established positions by exploiting the internet. As changes loom to Block Exemption, they will be joined by a growing number of supermarkets, finance companies and other recognised high street brands.
Internet-based retailers have proved the effectiveness of their supply chain operations for lower priced parallel imports and developed impressive web and telephone sales facilities. Now they are selling these facilities as 'white label' services, enabling new entrants to implement off-the-shelf car sales websites.
OneSwoop for example, handles the car sales, while the newcomers sell finance and other added value services, taking a commission on each car sold. The facility is particularly attractive to any company that holds data on its customers: loyalty cards offered by retailing groups look like a serious threat to dealers.
Technology need not be a threat – it offers dealers an opportunity to expand their customer bases and improve internal efficiencies.
Greg Connell, Epyx managing director, believes dealers and large fleet groups will use the internet to face up to tougher economic conditions in 2002.
“The prospect of recession is likely to accelerate e-trading growth,” he said.
Epyx has been in close contact with a number of fleet industry suppliers that are considering widespread e-trading with their customers. It suggests cost control and the improvements in customer service will fuel the growth. Motor finance will also be revolutionised, according to dealer software supplier Ebbon-Dacs. Its 'best quote direct' web-based application, launched this month, links dealers with several finance companies.
Mike O'Sullivan, Eddon-Dacs business development manager, said: “Traditionally we have seen dealers linked to a single finance company, with contacts for a whole host of other companies. This system will electronically link dealers to multiple finance companies.”
The software has been developed with the Hartwell Group and will be available at £100 per month per dealership.
“Dealers will have a broader choice of products and they will be able to finance more customers,” Mr O'Sullivan said. Auto Trader, already the most popular motoring site in the UK, has invested several million pounds on a website redesign that includes a section for new cars.
Matt Thompson, group marketing director of parent company Trader Media Group, said: “The site has a significant platform for new cars, reflecting the confidence of the new car market.”
Linking with well-established online brands is likely to become more popular with dealers, who have seen how difficult it can be to generate website traffic.
Jerry Horwood, director of 2nd Byte, said: “There will be less concern with building websites and more focus on how to deal with customers and prospects more efficiently.” He said traditional methods would continue to be used for most automotive transactions and suggested shrewd dealers would focus on improving business efficiencies through intranets and other technological tools.
New launches next year will include Kerridge's Autoline and Pinewood Computer Solutions' Pinnacle dealer management systems. Both make full use of the internet, highlighting the importance of an online presence.