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Consumers are driving the information highway to buy new vehicles By MARYANNA LEWYCKYJ, TORONTO SUN Consumers are increasingly driving harder bargains in auto showrooms, thanks to the information superhighway. The result is shrinking profit margins for dealers and leaving fewer opportunities to engage in hard-sell tactics. The Internet has also forced automakers to consider new strategies for pitching cars, including embracing blogs and trying to tap into viral marketing. "The power has moved from the corporate world to consumers," said Dennis DesRosiers, president of DesRosiers Automotive Consultants, in an industry presentation yesterday. "The Internet has fundamentally changed the bargaining relationship," he said. According to a recent survey conducted for Google Canada, researching prices is the most popular type of online search conducted by potential buyers, an activity cited by 78% of people polled. Scoping out specifications was second (69%), followed by model comparisons (67%) and viewing a car's interior and exterior (67%). Because consumers can gather so much information about a purchase outside a showroom -- including dealer invoice pricing -- they've become better negotiators. "They absolutely are informed," said Bill Davis, executive director of the Toronto Automobile Dealers Association. "They know more about the vehicles than same salespeople do." Since it's so easy for customers to comparison shop online, dealers have to go the extra mile to grab interest. City Buick Pontiac started using the Internet to reach customers in 1991. The dealership now offers up to 30 shots of each of its used cars. "The Internet has changed the foundation of this industry," said Michael Carmichael, assistant general manager of City Buick Pontiac. Automakers are also scrambling to come up with innovative ways to stand out and attract future customers. BMW hired several high-profile movie directors -- including Ang Lee and Guy Ritchie -- to produce short films that were available through the Internet. The films weren't ads, but simply stories that featured BMW cars in the plot line. Toyota used a series of quirky "Uncle Yaris" teaser ads to generate interest in the re-named Echo hatchback. Some automakers have starting leaking "spy shots" of future vehicles on the internet to drum up excitement about their upcoming models. General Motors' has even tried to capitalize on the cachet of its in-house car czar Bob Lutz by having him launch his own blog. |
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