WASHINGTON -- Sooner or later -- probably sooner -- many of you will buy new cars and trucks on the Internet.
Opposition from individual auto dealers won't matter.
State legislatures won't stand in the way.
Automakers won't have any choice.
This might seem a pipe dream, considering the often-contradictory developments in e-commerce auto sales. Events over the last two years seem enough to render my predicted outcome ridiculous.
First, General Motors Corp. and Ford Motor Co., the nation's largest automakers, tried to do an end-run around their dealers by setting up factory stores.
The company stores would have sold their inventories directly to consumers via the Internet. The expected happened.
The dealers went to war.
In state legislatures nationwide, dealers lobbied friends and former business associates to strengthen laws already on the books, or pass new statutes that make it difficult for car companies to engage in direct sales. The dealers won. The automakers backed off. There was peace in the automotive retail world, which turned out to be as real as peace in the Middle East or Ethiopia.
It happens that the human capacity for double-dealing is just as big in the car business as it is in politics.
To wit: Many of the dealers who fought factory stores were busy selling new cars and trucks to dot-com auto brokers, who then re-sold those vehicles to consumers under the guise of direct Internet sales.
In real-world price comparisons, consumers who bought from dot-com brokers often wound up paying more than buyers who went to dealer lots and showrooms. They certainly did not save as much money as advertised by dot-com brokers, according to studies by J.D. Power and Associates and other auto industry analysts who have been studying e-commerce.
Yet, the information -- and convenience (no need to visit a dealership) -- provided by the dot-com services continued to attract shoppers.
Forrester Research Inc. in Cambridge, Mass., is forecasting direct Internet sales of 500,000 new vehicles -- an estimated $12.5 billion in annual business -- by 2003. Those small numbers are big enough to get automakers worried.
That is why GM, Ford and DaimlerChrysler AG recently sent their dealers letters warning them not to do long-term harm to the traditional auto retail system by seeking short-term profits in sales to dot-com auto brokers.
The dot-com brokers have no loyalty to brand names, the car companies warned. Supporting the dot-coms could drop auto brand values to the level of breakfast cereals on supermarket shelves, the automakers said.
Such a turnabout would make it tougher for car companies and their dealers to hold on to customers, which means more traditional dealers could go out of business while automotive marketing costs rise and auto stock values, long underrated, continue to fall.
But, alas, the car companies and their traditional dealers have come to this realization too late.
Enter the mega-dealers and the masters of the online universe. Over the past two months, those forces joined to bring direct Internet sales closer to reality.
America Online Inc., the world's largest Internet services provider with more than 22 million subscribers, agreed to a three-year deal with Florida-based AutoNation Inc., to sell vehicles online.
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