Much has been written in recent months about the sad state of the US auto industry as GM, Ford and Chrysler struggle to realign their business models to market realities in 2009 and beyond.
Certainly car dealerships have faced difficult business conditions as well, as fewer and fewer people buy cars. Even interested car buyers have a harder time getting credit. JD Power has estimated that vehicle sales in 2008 decreased to 13.2 million sold, compared to a total of 16.1 million in 2007. Many dealerships will close in 2009. Those who survive the downturn in our economy will be those who are leaner, securely financed or self-funded, and who have taken advantage of the efficiencies and promotional opportunities available on the Internet and have reinvented their businesses to better align with what customers expect.
David Vahman, president of WebXloo, has seen a surge in business in 2008, as the most innovative distributors take advantage of technology to increase their exposure in local markets and improve their efficiency. WebXloo provides web-based sales and marketing tools for dealerships, and as with many industries, this technology transition at dealerships has tended to lag behind what their customers are already doing online.
Mr. Vahman evangelizes the importance of dealerships leveraging web-based tools to automate processes, streamline operations, and increase their dealership’s visibility to their customers. “Today’s dealers can seamlessly list their vehicles on their own website, leveraging Web 2.0 technology to create a two-way dialogue with their customers.”
Mr. Vahman describes the potential of the Internet as going far beyond a basic website. “Two things we’re seeing that are truly transformative in the auto industry are the widespread use of mobile technology by consumers and the ubiquitous availability of pricing information, both to the consumer and to the dealer.” As Mr. Vahman explains, “the sweet spot for dealers is smart vehicle buying.” Mr. Vahman continued, “Today’s vehicle-shopping consumers have a very clear understanding of what they should pay for a vehicle through a quick Internet search. The dealer who can purchase inventory that is in demand, through competitively priced, it is much better positioned to remain profitable.Our SlingShot mobile device, powered by AutoXloo software, provides dealers with business intelligence anytime, anywhere, whether they are buying a vehicle from an individual or in an auction”.
Indeed, most people recognize the difficulty traditional newspapers have in trying to stay relevant when fewer and fewer people subscribe to the local newspaper, its audience demographics continue to grow, and more and more people get their internet news. Craigslist has made classifieds almost irrelevant, and there is a trend for magazines and trade publications to shift from print distribution to exclusively online distribution. Cox Enterprises announced earlier this year that it would discontinue the publication of AutoExtra and AutoMart. And there has been ongoing speculation that the classic AutoTrader magazine, which many of us grew up with, may become an online-only model as well.
Looking at these changes, Mr. Vahman offered more insight into the changing dealer market. “Our software allows the dealer to compare real-time market price information from internet sources that customers use to make buying decisions. Understanding pricing from your customers’ perspective puts you in a much stronger negotiating position.
AutoXloo Market report provides a comprehensive analysis of the vehicles for sale in a specific geographic region from various online services. Market Report software queries online listings, based on the dealer’s current inventory, and presents the pricing results in a convenient dashboard in both detailed and summary views. The report is generated instantly and live each time a dealer evaluates a specific vehicle.
“We help dealers list their vehicles online, which helps them generate more leads and sell more cars,” Mr. Vahman continued. “From a dealer perspective, our tools easily fit into their workflow, allowing them to work more efficiently, reduce costs, and provide better information to their customers. Our value proposition, simply put, is that we generate more leads for less money. Leads generated online are much more measurable than traditional lead generation for dealers. It just makes sense since almost all of their customers begin their vehicle search online.”
Mr. Vahman explains, “It’s easy to see technology as an expense, especially in these challenging times. What sets our tools apart is that our solutions are at the forefront of the primary drivers for a dealership, which drives sales. While it can be difficult to make decisions about which technology to invest in, it’s easy for us to demonstrate to our clients that they can not only generate immediate results with our tools, but are much better positioned for long-term growth.”