They said the Internet would be the death of car dealerships. They said within a decade dealerships would become like dinosaurs, their bleached wheel rims up and down the restless ribbon of Memorial Drive.
So much for what “they” know. Who are they anyway?
The advent of the Information Age has been just one thing to impact how Mr. and Mrs. America buy cars, according to local dealers.
But it has not hurt dealerships.
With the Internet, car shopping has never been better, arming the consumer with knowledge while making entire process simpler for both the shopper and dealer.
The feedback from the public about the World Wide Web has been positive, said Bill Knight, president of Lincoln Mercury Jaguar of Tulsa, at Memorial Drive and the Creek Turnpike.
“The Internet has made the process simpler,” he said. “Our feedback indicates it (Internet) takes time out of the process.”
Greg Kach, owner of Jackie Cooper Imports, agrees that people are better educated, thus better able to make an informed decision. The Web is why.
“The Web has made it simpler,” he said. “But they (customers) still want to come in and drive something. Kick the tires. A picture can only do so much. Seeing it in person, feeling how it drives, how quiet it is and seeing the interior makes a difference.”
Coffee and a Computer
Dealers are stepping up their emphasis on customer service, said William Bradshaw, chairman of the National Automobile Dealers Association.
Dealers know their local markets better than anyone, he said. “Their business is all about adjusting to changing market conditions,” Bradshaw said, pointing out that intense competition has prompted many dealers to be more creative and innovative in attracting customers to their showrooms.
Citing amenities such as Starbucks coffee shops, onsite restaurants, Internet work stations, large play areas for children, interactive Web sites and putting greens, dealers are stepping up their emphasis on customer service.
“Almost every dealer in the country has an interactive Web site,” he said. “It’s proven to be not only an effective information resource for consumers, but also an excellent marketing tool for dealers.”
In Tulsa, Knight sees a “mature” clientele coming to the car lot.
“As the Internet has taken hold, it has become a tool to gather information. What we are seeing is a large amount of people doing their research on the Internet — not to mention, a lot of people want to communicate through the Internet, Knight said.
When it works well, a customer collects a lead off the Internet, sets up an appointment then comes to the store. When they ask about a specific vehicle, the dealership is able to pull that vehicle much of the time.
“We always pull that one, one nicer, with more equipment, one with less equipment and give them a pre-owned option,” Knight said.
If the customer has done his or her homework and the dealership has done its part, then the transaction can be shortened to an hour.
“That is the biggest benefit,” Knight said.
Fuel Economy in Driver’s Seat
Gasoline prices have not always been on the minds of sports utility vehicles customers when they shop, Kach said, until the past year.
“That is the biggest thing right now,” Knight said. “There are still people that still need a large SUV and are not swayed by gas prices. There is a segment of the population that wants a large SUV or thinks that a V-8 engine might be a nice thing to have.”
Retail gasoline prices topping $3 a gallon got peoples’ attention, said Knight and Kach.
“Today, they ask about gas mileage and we make it part of the presentation,” Kach said.
Before last year, customers to some degree ignored fuel prices while shopping for big sport utilities. “But now, they want more fuel efficiency,” Kach said. “They are looking at smaller, cross-over sport utilities. The smaller ones are on a car chassis. They ride better. They are quieter.”
“There are a lot of conservative people, looking for a smaller engine,” Knight agreed.
There has been a dramatic change in customers’ taste for vehicles as imports are taking market share away from domestics, Kach said. “They are moving to imports over domestics,” he said. “The perception is that (imports) have a better value.”
U.S. automakers have suffered billion-dollar losses in the last two years and Kach said it is clear, “imports are close to overtaking domestics.”
Tulsa’s market is a “great example” of what is going on nationwide — automotive entrepreneurs are taking their dealerships public, Kach said.
“In Tulsa, there is Sonic, United Group, Group One — three major publicly traded companies — that are not locally owned. It makes for a competitive difference.”
The dealerships are based in Texas, California and Florida. The retail automotive sector has always been capital intensive. But, in the last decade, building costs, prices for speciality tools and real estate have gone through the sunroof, Kach said.
“We have spent $20,000 for tools for two models,” he said. “The cost of doing business has made it cost prohibitive for smaller guys.”?