The competition to market and sell cars online is getting fierce, with some experts predicting a shakeout ahead.
In the past two years, hundreds of companies ranging from DealerNet to Microsoft Corp.'s CarPoint to regional players like Triple A of Southern California have opened up Web sites offering an easy, convenient way to shop for cars.
The services connect interested buyers with local dealers. Some take a commission on sales; others charge dealers an annual fee to participate.
Now, automakers including General Motors Corp., Ford Motor Co. and Chrysler Corp. are redesigning their sites to add similar shopping information.
None of the Big Three want to go as far as selling cars via their sites, but they clearly don't want to cede any more auto marketing turf to the independents.
Witness GM, which recently created pages on its site for each of its dealers. At Ford Motor Co., some 1,500 of the automaker's 5,000 Ford and Lincoln-Mercury dealers have signed on to a new program to house individual home pages on the corporate site.
Chrysler Corp. will soon unveil a redesigned site, adding competitive vehicle information.
"We didn't add our dealers in response to the [independent] services," insisted Larry Dale, marketing specialist at Ford's Automotive Operations. He said there are thousands of car dealers on the Web with their own addresses and it's easier for consumers to find a Ford dealer at Ford's site.
All this activity is fueled by the fact that more car shoppers are going online. One in five consumers in the market for a new or used car said they went online to get information, according to a recent report by the Dohring Co., an auto market researcher.
Selling cars on the Web is in its infancy and is quite inexpensive to roll out. But in the short space of time that they've been around, companies like DealerNet and Auto-By-Tel have made significant strides.
DealerNet, which launched as a regional service three years ago, charges dealers monthly fees for linkups, depending on the size of their site. Founder Martin Rood claims the service is profitable, but he declined to provide details.
Auto-By-Tel received 35,000 purchase requests in August, according to a published report.
Microsoft's recently launched CarPoint, meanwhile, partners with Auto-By-Tel and Intellichoice and collects a commission from every fax order for car data, said Brenda Taam, product manager for CarPoint.
In the coming shakeout, it may be the dealers that have the most power. Wooed by independents that want to help them sell cars and automakers that want to keep the dealers in the fold, they will dictate the success or failure of many of these ventures.
"The dealers are going to dictate who survives and who doesn't, because they'll decide where to spend their dollars," said Jerry Daniels, cofounder of one of the newest auto sales services, AutoTown.
AutoTown charges dealers at least $600 monthly for a presence on the service, said Mr. Daniels, 31, a former car dealer.
Framingham Ford in Framingham, Mass., has been online via DealerNet for three months, said John Anderson, the dealership's information systems' director. But most of the quality leads come via the corporate site, he said.
Not every automaker feels threatened by the independent services. Saab Cars USA tapped DealerNet as a preferred vendor to create turnkey Web sites for its dealers, said Elke Martin, corporate communications director. About 25 Saab dealers have already voluntarily signed up.
Automakers fare only slightly better; just over 1% of the PC-Meter panel visited the sites of Ford, Toyota Motor Sales USA and Nissan Motor Corp. USA.
Copyright December 1996, Crain Communications Inc.