Maryland auto dealers were told yesterday that they need to embrace the Internet and revise their way of doing business with computer-savvy customers if they want to remain viable.
"The Internet has leveled the playing field between consumers and dealers," Jacob J. Cohen, managing director of the automotive services group of American Express Tax and Business Services Inc., told 50 dealers attending the company's e-business conference at the Pikesville Hilton.
Less profit per sale
Cohen said car buyers have far more information today and this is reducing the profit a dealer makes on each car sale.
He cited a recent survey by American Express that shows that 60 percent of the car buyers have used the Internet to obtain information about their auto selections before entering the showroom.
For certain brands, including BMW, Saab and Audi, Cohen said, 70 percent of the customers walk in armed with information on price, incentives, options and other features.
Cohen said that in most cases buyers are more certain about what they want in a car and have narrowed their choices to a couple of brands before visiting showrooms.
Buyers will only get smarter, he told the group. "We are working with a technology company that has agreements with most manufacturers to allow them to download factory incentive plans on a daily bases."
By simply clicking on a special icon, buyers will get information on all the incentive plans offered on a model-by-model bases and on a real-time basis, he said.
Internet car shoppers are an impatient group, Cohen said, citing his "three clicks and you're out" rule. If it takes more than three clicks on a computer for an Internet shopper to reach a dealer's auto inventory, the potential buyer is lost.