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Automotive Internet Predictions for 2008 2008 is upon us. The Internet begins its 15th year for the automotive industry. A lot has changed over the past 15 years and here is what you should expect. I dusted off my crystal ball as I do every year and will provide you with what I see that is in store for the coming year.
2. Dealerships will begin a gradual shift from the traditional sales force to a more technical savvy system of personnel. Result: The light bulb will finally come on with the more progressive Dealer Principals and General Managers that we cannot continue doing business on the floor the way we have over the past 100 years. Their entire sales staff will begin to shift from the floor sales and a separate Internet Department to what will initially be a blend. The writing is on the wall that we have entered a new Era in automotive sales. The death of the commissioned sales person will begin; profit margins and technology will dictate the evolvement.
Result: This will create a quandary within the Internet Sales environment. The initial thought will be “dealer trade” what we need will soon be met with no one has what the consumer wants and no one is willing to trade. The “Big Three” will eventually change from a pick and choose menu of options to the same system the foreign manufacturers have been using for years. Less stand alone options, easier selection, and higher profit margins for the manufacturers.
Result: Dealerships in their quest to cut costs will begin to resist the pay per lead provider. This will be brought about by the system that is in place that third party provider’s purchase their leads from what are undesirable sources. Dealers will demand higher quality product. The balance of profit and quality will cause some providers to either drop out of the picture or provide far less leads that are generated solely through their own network of web sites. The industry as a whole on both sides of the coin will benefit. The weaker providers will fall to the way side. Dealers will get a better product and the surviving Providers will continue to grow and be more profitable.
2008 will be a bad year in comparison to how the automotive industry has been over the past decade. Actually it will be a correction of the market. Manufacturers, especially the “Big Three” have over-saturated the larger Metros. Business economics will dictate that 10 pounds cannot fit into a 5 pound bag, not even if it is made of the new high stretch plastics. Some of the closures will come as a shock to the automotive community. In other cases it will be a combination of showrooms that would never have been allowed by the car makers. I believe that at least 2 makes will bite the dust this year that have been around for a long time. We will miss the dealers and the Makes.
If there will be anything positive to come out of the dismal year of 2008 for dealerships it will be that services will become less expensive. Certain providers that charge hefty monthly fees will either lower their cost to dealers or not participate in the monthly Internet budget. These will include Inventory sites, CRM Solutions, Lead Management tools and Internet based advertising sites. Certain manufacturers will raise their heads and further control what the franchise dealers are doing on the Internet, new and used. As a result cost will be reduced across the board. Economics is economics. I base what I have placed in this article on trends I have been observing. Of course there is no guarantee that any of this will come about. But I know that regardless of what happens in 2008 we will all survive and be stronger for it. Dennis Rushing
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