US automobile manufacturers are turning to the Internet to market their wares — a sales niche until now dominated by independent sellers.
Ford took the lead Friday, announcing the creation of FordDirect.com where consumers can choose the color and options of a new Ford vehicle and set a date for its delivery.
"It marks the first time that a manufacturer is offering the direct selling Internet model to the consumer," said Chris Denove, director of consulting operations at JD Power and Associates.
FordDirect.com will work with the 4,200 Ford dealerships in the United States, which will co-finance and control the site, the company said.
After clicking "buy," customers will choose a dealership where they will close the transaction, but FordDirect.com will set a maximum price for the sale.
"Ford becomes somewhat involved in the pricing. Dealers have always been reluctant to allow manufacturers to control vehicle pricing," Denove said.
The site is to be launched in California in September and throughout the rest of the United States by the end of 2001.
"This is an unprecedented partnership between an automotive dealer body and a manufacturer ... We are breaking through the channel conflict that is sometimes caused by the Internet and giving our customers a great new experience," said Jerry Reynolds, chairman of the national Ford Dealer Council.
Ford rival General Motors is developing a similar site which it will link to the existing GMBuyPower.com, where customers can browse for information on prices and models available at GM dealerships.
Automakers and dealers worry that independent online venders like Autobytel.com and Greenlight.com will loosen their control over distribution networks, although US law bars unauthorized intermediaries from selling cars.
"The Ford model is a compromise between the consumer's desire to have posted Internet prices and the ability to search for specific vehicles, versus the dealer's desire to control the retail process," said Denove.
On Tuesday, online bookseller Amazon.com began selling cars in partnership with Greenlight.com.
"Our research continues to show that most consumers will prefer dealing with an independent service," Denove said.
The company is hoping FordDirect.com will attract customers away from independent intermediaries.
Clients "can now buy a new car or truck online with confidence and peace of mind, knowing that the entire experience is backed by Ford and our dealer partners," said Jim O'Connor, Ford Motor Company vice president.
Stakes are high: although just three percent of new car sales were made over the Internet in 1999, that number is expected to grow to five percent this year, according to JD Power and Associates.
But one of every two US car buyers surfs the Web first to look at prices and available models, and car makers are relying more and more on the Internet to promote sales. — (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
