Next month two major names – Auto Trader and Exchange & Mart – launch new initiatives as the battle intensifies for a larger share of a booming market.
Auto Trader, claiming about 300,000 vehicles for sale online and through its magazine, starts buying 40,000 key search-word phrases from Google. Tap in ‘blue 306 Manchester’, for instance, and Auto Trader will guide users to a list of Peugeots matching that description.
“Over the next 12 months we will be doubling our online budget because so many drivers are shopping for cars this way,” says Jonathan Williams, Auto Trader head of marketing. “Most companies rely on general phrases like ‘used VWs’ but we want electronic traffic relevant to our dealers.”
Williams says two in five people looking at classified car ads online in the UK are directed to the Auto Trader website.
Its rival Exchange & Mart (claiming 150,000 vehicles for sale) this spring launches Trade2Trade.co.uk, a used-car website restricted to VAT-registered dealers with licensed premises. “Dealers will be able to sell cars that are hard to shift,” says Tim Brown, Exchange & Mart business development manager. “We will charge £25 for a £10,000 car – but only when a vehicle is sold.
“We have nearly a decade’s experience and tested potential demand. I believe we’ll need 5,000 vehicles on the site to provide the liquidity to satisfy dealers’ demands.”
Brown agrees eBay Motors’ interest in dealer business has been a factor in Exchange & Mart’s latest venture, but says its new rival offers only about 10,000 cars.
BCA’s Tom Madden also plays down the eBay threat. “It does not pretend to offer the range of services a remarketing company such as ourselves offers,” he says. “With eBay, the onus is on the seller to arrange completion of the deal – our skill is successfully concluding for buyer and seller, in the auction hall or over the internet.”
Manheim’s Simulcast, allowing retailers to bid remotely at all 11 UK sites during 10% of its auctions, accounts for up to 8% of cars bought at auctions where online trading operates. By 2007, says Manheim, 80% of its auctions will have Simulcast, which this summer will enable bidders to buy at four auctions simultaneously.
In other internet developments, Yahoo’s first major joint project since acquiring Kelkoo last year is a new Yahoo Cars website which simultaneously compares prices and features of vehicles from hundreds of dealers and private sellers.
Fish4Cars says its website has links to 5,300 dealers, a year-on-year rise of 34%, with “greatly improved reporting and management of online content and response for dealer groups and manufacturers”.
All the companies pitching for business see the same trend. As retail buyers spend an increasing amount of time online, website banners and links become more valuable as a way of connecting private buyers, franchised dealers, used car traders, classified ads and fleet disposal stock.
Daren Wiseman, managing editor of CAP Black Book, says: “Dealers are looking for ways of selling nationwide, not just in their locality, and the internet provides a common language in the trade.
“Professionals are learning who they can trust to provide accurate descriptions, and websites are giving them views right round a car, and inside as well.
“Retail buyers are still reluctant to commit themselves to buying a car unseen but dealers recognise a real business benefit. From their office they can buy cars in auctions hundreds of miles away, and BCA and Manheim are learning fast from others about the best way to stage electronic auctions.”
New figures show that out of total UK adult ‘consumption’ of ads (where people see them), online’s share is 22% and gaining on radio (24%).
ebay Motors, which last year acted as the conduit for 190,000 car sales in the UK, compared with 70,000 in 2003, sees growth potential in the motor trade and now allows firms trading cars and parts to settle fees using a business bank account.
“We’re making it easier for dealers to sell used cars that stick on their forecourts for 40 or 50 days,” says Clare Gilmartin, who heads eBay Motors.
“When they look at prices achieved by others, dealers see they are likely to get more at eBay than by disposing of cars through the trade. We have been driven by consumers from the start but small businesses in other sectors have already found us useful.”
So might eBay one day launch a website restricted to the motor trade? “We want to support existing dealers to make them more successful when using eBay Motors as it is now,” says Gilmartin. “We see no need to change that at the moment.”