Should Car Manufacturers Be Selling Online?

Did you read Chris Brogan's post about how he bought his new Camaro online? Maybe start there.

And then perhaps you should read the fascinating follow up interview with Aaron Smith.


Regular readers will know that I spent many years in the motor industry. I've been watching it from the sidelines since I got out ten years ago, and I've seen the manufacturers and dealers fall further and further behind other retailers in the way they market and in their use (or lack of it) of social media.

The new car sales business is almost as much of a train crash as the print publishing industry.

So I have a radical solution.

Stop selling cars through independent dealers, and sell them online, delivered to people's doors.

Yes I know that creates two big problems:

1/ What about all the people employed in new car dealerships?

2/ Buyers want to see and try cars before ordering them

New Car Dealers

Here in Europe, dealers actually make very little money selling new cars. In fact, in many cases they lose money on them. Cash which is then made up with back end bonuses, based on achieving volume business.

Car dealers make good profit of used cars, and a decent income servicing cars.

Let the dealers focus on those areas. Their job will be to prepare and deliver new cars ordered on-line (and the manufacturer can pay them a simple fee for doing so - the "delivery charge") and they can continue to buy and sell used cars, and make good income as the official service and repair agent for their areas.

Trying Cars

Here comes the really radical part. Why don't manufacturers get together to set up joint premises? Let me give you an example. Some time ago, when I was still in UK, I was due a new car. I'd narrowed my choice down to a Mercedes C class, a BMW 3 series, a Lexus IS and an Audi A4.

We set out one Saturday morning to visit the four dealers in question. My plan was to drive all four and make a decision. It was a complete debacle, and it took all day as it involved a lot of driving to get from one to the other, despite living near Manchester.

I won't bore you with the myriad problems we encountered, but the bottom line was that of all my choices, only the BMW dealership had a car I could road test on the day. The others could get them for the following week, but all their relevant demonstrators were out for one reason or another. One had even been taken for the weekend by the dealer owner's wife!

Faced with a choice of taking time off during the week and delaying my purchase, I inevitably chose the BMW. But that's not the point of this post.

The point is the structure of the industry forces me as the customer to drive from dealer to dealer. How much better would it have been to visit one place where all the cars were available to check out and drive?

Each major town could have, say, four "dealerships" - one for small cars, one for medium sized cars, one for large cars and one for specialist cars. The manufacturers would simply split the cost of the upkeep of the premises, have a fleet of demonstrators on hand and one or two specialists to help customers. So if I was interested in buying a small car, I could go to one place where I could look at and try a Fiat, a Ford, a Hyundai and so on.

If I wanted to order there and then, I could do so through the specialist, or I could use a terminal in the showroom to specify my car. Alternatively, I could head home and do it from there, on-line. In either scenario, the car would then be delivered to me by my local dealer.

I know this is way too radical for the industry right now, but sooner or later the manufacturers will lose their cartel status, and when that happens we'll end up with car supermarkets, probably run by the current food supermarkets. I think they need to act now, before it's too late and we're all buying our cars through Tesco.

What do you think? Is this a step too far? Would you buy a car this way? I know a lot of "car" people read this blog, so I'm looking forward to hearing why this won't work!

Other stuff you might enjoy:

1/ How Twitter sent the very first Lexus back home

2/ Social media for businesses - what's the deal?

3/ Brilliant! Ford shows the way with social media marketing

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"Mike's Life is where you can stay current with the life, thoughts, successes and failures of Mike Cliffe-Jones. Never knowingly ordinary, Mike shares as much as possible about his work as a marketer and in business, as well as his enviable lifestyle on and in the oceans around The Canary Islands."

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