Whitepaper
03
The Case for Upfront Pricing
Why an Informed, Good Price Will Become the Only Price
White Paper 03 The Case for Upfront Pricing
Executive Summary
The new car retail business is now more than 100 years
old. At its core are a mature franchise system and a
protective regulatory/legal framework predicated on
geographic proximity of the customer to the dealer,
conditions that have held the dealership community
accountable for more than a century. As conceived,
this system met the needs of both manufacturers and
dealers: manufacturers were able to sell geographic
exclusivity to dealers so those dealers didn’t have to
worry about market saturation, and dealers paid for that
exclusivity—thereby building a massive service network
nationwide for the OEMs, who could not legally set prices
for their autos, that effectively supported and sold their
product for decades.
The franchise system that guaranteed dealers their
zone of geographic protection gave them the freedom
to operate a business model based on optimizing profit
per transaction. The system also helped OEMs propagate
their brands and made them look bigger than they
were while growing the effective sales force. As 2008
began, there were 20,700 new car dealerships with
nearly double that in new vehicle franchise operations
nationwide.1
But the premise for such a sweeping franchise system
has changed irrevocably. Geographic proximity is
no longer the primary driver of auto purchases.
Convenience no longer trumps everything else in the
existing auto transaction model. And cars no longer need
to be “sold” as they once did.
Replacing the old “proximity marketing” model is a new
paradigm built on upfront pricing embraced by more and
more forward-thinking dealers—businesses that want to
compete successfully in a rapidly evolving market.
Upfront pricing is the new world order. Its arrival
heralds a bona fide tipping point in automotive retailing.
Upfront pricing is non-negotiable in an environment
defined by net margin compression, anonymous
access to robust product information for consumers
via the Internet, and the commoditization of the car. To
facilitate a purchasing decision, the online commodity
shopper wants an informational advantage, and that
is truly achieved only when the buyer can get access
to an upfront price—anonymously—and has the tools to
compare that price with the market average, to know
it’s fair. This combination of upfront pricing and pricing
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White Paper 03 The Case for Upfront Pricing
“relevancy”—that is, unimpeachably accurate data about
what others have paid for the same vehicles—ultimately
will set market forces free within the auto industry for
the first time. This market equilibrium is good news for
consumers and for dealers who know how to compete.
While many elements contribute to and inform customer
satisfaction at dealerships—including selection,
convenience and the overall buying experience—
consumers’ actions online prove that what they really
want to know is the price, which is the focus of this paper.
After all, they are willing to surrender their anonymity
for the (frequently unrealized) prospect of receiving a
price. Price dramatically impacts customer satisfaction
in the auto purchase process, particularly when it comes
to making Internet purchases. What’s more, research
confirms that offering upfront price also correlates
directly to significantly increased customer loyalty.2
Dealerships that are not sensitive to and remain ignorant
of this Internet-driven expectation of adequate pricing
information risk irrelevancy. Some of the nation’s largest,
publicly traded dealerships, along with other progressive
dealers, are accordingly offering upfront prices online
as their primary go-to-market strategy. And Ford’s
“Employee-Pricing” was one of the most successful
auto retail initiatives in recent history. At its core, this
program was upfront pricing consumers could trust.
The world is changing; upfront pricing for new cars isn’t
just nice to have, it’s the new paradigm in automotive
retailing. If dealers are not prepared to upfront price
their cars and win customers based on informed, good
prices, they’re ignoring the very nature of the online
shopper they’re trying to court. Put in starker terms—and
with very few exceptions—dealers who don’t embrace
upfront pricing won’t thrive, or even survive in some
cases, going forward.
Geographic proximity is no longer the primary driver of auto purchases.
Convenience no longer trumps everything else in the existing auto
transaction model. And cars no longer need to be “sold” as they once did.
1. National Automobile Dealers Association Industry Analysis
Division, NADA Data, “Economic Impact of America’s New
Car and New-Truck Dealers,” www.nada.org, 2008.
2. J.D. Power and Associates, 2007 Dealer Satisfaction with
Online Buying Services Study; eMarketer.
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White Paper 03 The Case for Upfront Pricing
Automotive Retail Doesn’t
Function as a Free Market
Below we will provide you with a snapshot of the forces
driving this transformation of the traditional auto sales
system, followed by an overview of adjustments dealers must
make to succeed under the emerging new model.
Market forces within the automotive industry have been
bound up by a system that has traditionally favored the dealer
in the transaction by making dealers the customer’s primary
resource for comprehensive product information and by
maintaining a lack of transparency in product pricing. But
consumers are now empowered; they have anonymous access
to product information online. This empowerment dovetails
with the movement within the industry to embrace an
upfront pricing model. And at the center of this intersection
is the car itself—ubiquitous, utterly reliable… and a
commodity in every sense of the word.
What Has Changed:
The Car Has Become a Commodity
As Merriam-Webster puts it, a commodity is a “massproduced unspecialized product whose wide availability
diminishes the importance of factors other than price.” In the
context of auto retailing, cars are already there. Because cars
have been individually priced for so long (and many dealers’
business models rely on keeping it that way), the idea that the
car has become a commodity is still somewhat heretical. Still,
heresy or no, cars are now commodities.
Compare two cars
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Find the differences between these two similar looking cars. Check
the last page of this white paper for the answer.
Which toaster would you buy?
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One easy way to remove yourself from consideration is to withhold
price on a well-defined product in a market where others do provide
upfront pricing information. While cars are different than toasters, the
pricing concept is the same for these.
Buyers are now more confident in the product as brands
have achieved high levels of safety, quality and consistency.
Given the same make, model, trim and option level from
the factory, meaningful variations in quality and reliability
simply do not exist. Put another way, based on what the factory
is delivering, there is no greater value in patronizing Pete’s
Porsche-Audi than there is in buying from Paul’s Porsche-Audi.
Consider how a consumer might approach buying a toaster.
Granted, cars are not toasters. But the buying process, for
consumers, is essentially the same. He or she would research
various brands, find out what’s available and compare
features. He would assess his own wants and needs: two slots
or four, wide enough to accommodate bagels, appropriate
color to match his kitchen. Then, he would compare prices.
Now suppose the make and model of toaster he chose was
available at K-Mart, Sears, Circuit City and Best Buy, all
conveniently located at the same intersection a block from
his home. Imagine three of those stores have signs out front
advertising that toaster—one for $145, one for $150 and
one for $155. The fourth retailer won’t disclose its price. The
moral is clear: the competitive price gets the business. Price
matters, and the retailer who doesn’t give a price won’t even
be considered as part of the purchase decision.
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White Paper 03 The Case for Upfront Pricing
Vehicles are more complex than toasters, of course, and the
financial commitment much larger. But people follow the
same steps when shopping for a car because they have the
same needs—to learn about the products and to compare
prices to make informed decisions.
If we’re comparing apples to apples (or toasters to toasters, or
BMW 550i’s to BMW 550i’s), there should be no difference
in price. Today there is no reason why two people each
buying a BMW 550i with the same factory options should
pay different prices for the same car, whether they’re in St.
Louis or Los Angeles or at the same dealership. Yet the
reality today is that it’s possible for those two
buyers to pay prices that differ by thousands,
even if they bought from the same dealer on the
same day. There is, then, utterly no objective
reason for a consumer to pay more for a car
based on where it’s bought and sold. That’s the
essence of a commodity business.
Commoditization3
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The Internet has Replaced
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For most of the automobile’s history, dealers
could count on the geographic exclusivity
of their franchise agreement to ensure a
certain level of walk-in traffic (read: built-in
opportunities for aggressive selling techniques)
because walking into a dealership was the only
real way for consumers to research their car
purchases. They picked up the brochures, looked
around and talked to a salesperson.
Technology has transformed the auto sales
paradigm. Today, the Internet is enormously
influential in determining how consumers find
dealers and how they decide when and where
to buy. Consequently, dealers from outside a
geographic market area now have a shot at a
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customer browsing online, effectively stripping
away the protections of geographic exclusivity
granted to dealers under franchise law. More
Commodities are defined by high product uniformity and low pricing variation.
That is to say that the same product on the same day will not have a high variation
than ever, in a stagnant or shrinking market,
in price. Clearly several industries are not commoditized industries, such as
competing dealers rely on this dynamic to
real estate, jewelry, and travel, due mostly to their low product uniformity. The
automotive category is remarkable as a category with near perfect product
increase market share, to expand their trade area,
uniformity within models, yet high pricing variation.
and to take sales away from other dealers. This is
a classic zero sum game: for one to win, another
must lose. Those who succeed are doing so at the expense of
their competitors.
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Put in starker terms—and with
very few exceptions— dealers who
don’t embrace upfront pricing
won’t thrive, or even survive in
some cases, going forward.
3. “Jewelry Report, 2006 Update: The Who, What, Where, Why and How
Much of Jewelry Shopping,” Research and Markets, June 2006. National
Association of Realtors, NAR Data, 2008. National Automobile Dealers
Association Industry Analysis Division, NADA Data, “Total Dealership
Sales Dollars,” NADA’s AutoExec, May 2008. Mary Holz-Clause and
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That’s not to say that convenience doesn’t matter. It does,
but serving the local community is no longer a sufficient
differentiator or sole competitive advantage because
consumers go online first. That means any other dealer
can make a better offer at an earlier or more critical stage
of the purchase process and thereby expand its trade area,
sometimes pitting dealer against dealer for the same
customer seeking the same brand vehicle.
Malinda Geisler, “Grocery Industry,” AGMRC, September 2007. Suzanne
Duffree, “CEA forecasts $155B in Consumer Electronics revenue,” Electronic
News, January 8, 2007. “Travel, Airline, Hotel, and Tourism Industry
Trends,” Plunkett Research, LTD., 2007. “Clothing Stores, Industry Profile,”
First Research, April 2008. “2008 Restaurant Industry Forecast,” National
Restaurant Association, www.restaurant.org, 2007. Grocery Manufacturers
Association, Inc. and PricewaterhouseCoopers LLP., “Insights into the
Food, Beverage, and Consumer Products Industry: GMA Overview of Industry
Economic Impact, Financial Performance, and Trends,” 2006.
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White Paper 03 The Case for Upfront Pricing
Dealership Concentration and the Loss of Geographic Exclusivity
This map shows the concentration of dealerships for a specific automotive brand within the entire county of Los Angeles. One can infer the
franchise boundaries by looking at the dealership distribution. Consumers state they are willing to drive 10-15 miles4 to buy a car. This map
shows that there are as many as 8 dealerships for this brand within driving distance for most of LA County. The idea of geographic exclusivity for
dealerships is a thing of the past as consumers are typically within reach of multiple dealers.
For prospective car buyers, indeed, the “neighborhood”
dealer has gone the way of tail fins, according to a recent Zag/
Synovate survey of 1,000 consumers.4 Dispensing with the
geographical niceties of the local dealer franchise system, 42
percent say they would be willing to drive at least 45 minutes
from home to buy a new car from a dealership.
When adding in recommendations from a trusted source—
and the prospect of saving $2,500 on that $40,000 car—
geography is even less of a factor. Fifty-five percent of the
sample would drive 45 minutes or more for a great deal, on
the counsel of a trusted source. And 17 percent would drive
more than 90 minutes, according to the survey.
To adjust to the new rules of auto retailing and take
advantage of how consumers now shop for cars, dealers must
first understand the new expectations created by today’s
online model, including how potential buyers are using the
Internet during the shopping process, what they’re looking
for, what they hope to avoid, and what they’re getting and not
getting online.
4. Zag data, survey of 1,000 consumers conducted by Synovate
eNation, May 2008.
Today, the Internet is most often the first stop for prospective
car buyers. According to the 2007 Dealer eBusiness
Performance Study5, 83 percent of new-car shoppers use the
Internet during the shopping process—and that number
continues to grow. In a report measuring the changes in the
primary source of auto buying information from 1998 to
2005, the Internet gained the most (15 percent) and dealer
brochures lost the most ground, when compared with word
of mouth, Consumer Reports, and newspaper, magazine and
TV ads.6
Consumers are primarily seeking an informational
advantage when shopping online. To get it, they boil the
process down to answering these key questions: What kind
of car do I want or need? What kind of price can I get? What
will my monthly payment be? While some consumers will,
at some point, want to test drive a car at a local dealer, the
test drive is no longer as important in a car-as-commodity
world. For many, it’s enough to browse models and features
online and then to narrow selections down by price. At this
stage, consumers need a price to gain the very informational
advantage they seek. For many, any price will do even if it’s
not a particularly good price (which explains, in part, why
5. The Cobalt Group, in partnership with Yahoo! and R.L. Polk
& Co., Dealer eBusiness Performance Study: The New Buying
Influences, 2007.
6. “Changes in Primary Source of Auto Buying Information:
‘98–’05,” CNW Marketing Research & Time Inc., www
cnwmr.com
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White Paper 03 The Case for Upfront Pricing
online lead generation has worked until now). The lead
generation model is built on the assumption that consumers
will surrender their names and contact information, passed
on to dealers for a fee, in exchange for a price. Yet this
model ignores what consumers dislike most: exposure to
the commissioned salesperson. Indeed, one reason many go
online in the first place is to be able to remain anonymous
while they conduct product research and begin the shopping
process.
This is the crux of the informational advantage consumers
seek online: not only do they want pricing, but they want to
get that price in the same way they’d get the price of a book
on Amazon.com: immediately and anonymously. What’s
more, they need to know the price they get is a good one.
That explains why online shoppers typically cross reference
pricing data with three other sources: to confirm the fairness
of the price, and to move forward in the process knowing
they are informed enough. Just as the interstate highway
system transformed commerce locally, regionally and
beyond, so the Internet’s information tributaries are altering
shopping and buying behavior for good.
Follow The Price Request…
Incidence of consumers being able to get a real price on the car7
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We estimate that only about 9% of dealerships provided upfront
pricing of any kind. Of the remaining 91% of dealerships, only
38% will give a price upon request. 18% will not see a price unless
they visit the dealer.
7. eMarketer, “Automotive Marketing Online: Negotiating the
Curves,” June 2008.
A snapshot of what’s happening now online. A buyer conducts
online research and submits price requests, which require her to give
out a phone number and an email address. That price request and
the buyer’s personal contact information is then shotgunned out
to between three and seven separate dealers by the lead generation
aggregators. After spending time researching the product and
reaching the point at which she needs to know price in order to
move forward, the buyer has just inadvertently provided dealers with
her contact information. But given that only 38 percent of dealers
say they provide a price quote in the first email responsei, dealers as
a group are fundamentally missing the point. Many dealers do not
bother giving a response; and if they do, they tend to shy away from
giving an upfront price, preferring instead to launch into a “come on
down” sales pitch. (For a more detailed discussion of lead generation,
see Zag’s white paper, “Lead Generation is Broken for Dealers and
Customers.”)
Why that approach doesn’t work. Holding back price and making
the online experience anything short of a completely convenient
process for the buyer ignores the very nature of online shopping and
the psychology of the shoppers themselves and ultimately can harm
sales efforts.
A study by the Pew Internet & American Life Projectii, released in
February 2008, reveals that American Internet users have embraced
online shopping for its convenience and time-savings. At the same
time, most online Americans have high levels of concern about
sending personal information over the Internet. In fact, 75 percent
of Internet users either agree (39 percent) or strongly agree (36
percent) with the proposition that they do not like giving out credit
card or personal information online.
According to AlixPartners’ 2007 Consumer Brands Index™ which
surveyed 5,000 U.S. consumers, auto buyers are no longer willing to
settle for anything less than totally honest and consistent pricingiii.
Consumers ranked “honest price” as more important than “lowest
price.” Convenience is also a factor: auto shoppers no longer have
the patience to sort through rebates and other incentive offers to
discern the actual price they’re expected to pay at the dealership.
When the dealer’s business model is to maximize profit per
transaction, it makes sense to hold price close to the vest. But
now that consumers have anonymous access to product and
pricing information online, and the cars themselves have become
commodities, there’s no reason or opportunity for elasticity in price
from buyer to buyer and, therefore, there is no financial benefit to
the dealer for withholding price. And there’s no reason not to give
consumers what they want: anonymous access to an upfront price,
online. In fact, there are plenty of reasons to do just that.
i. J.D. Power and Associates, 2007 Dealer Satisfaction with
Online Buying Services Study.
ii. Pew Internet & American Life Project, Online Shopping,
February 13, 2008.
iii. AlixPartners, 2007 Consumer Brands Index™, as reported in
news release titled “Consumers Want ‘Honest’ Pricing in
Autos,” January 10, 2007.
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White Paper 03 The Case for Upfront Pricing
How Dealers Can Thrive
One of the best ways for a dealer to thrive in a market
saturated with dealerships is to upfront price their cars—
capturing the attention of buyers online by giving them what
they want when they want it. After all, if the customer is
going online and can shop anywhere, the one overriding goal
is now an informed, good upfront price. This is, in Malcolm
Gladwell’s apt (if now overused) phrase, the “tipping point”
for auto retailers—“the level at which the momentum for
change becomes unstoppable.”
Dealers who refuse to acknowledge this are hanging onto
the last vestiges of “proximity marketing” and will continue
to lose market share to dealers who are already offering
upfront pricing. Dealers traditionally argue that when they
give an upfront price, they are surrendering their profitability
Why Offer an Upfront Price?
An upfront, transparent price is an informed, fair price given
in real time. The consumer doesn’t have to provide personal
information or wait for an email response from a dealer prior
to expressing interest. While online, the buyer can remain
anonymous until he or she is ready, and that places the buyer
in control.
According to Forrester Research, consumers who
understand car prices are happier with their vehicles and
their dealers. They feel significantly better about their carbuying experience and are more likely to purchase from
the same dealer again9. The sheer volume of price requests
consumers submit every month shows just how badly they
want this information. Just one of the major infomediaries
processes 13 million price requests per month.10
Progressive dealers recognize that to grow market share they
must remove suspicion from the transaction and begin to
engage in trust-based conversations with consumers. And they
understand further that upfront pricing is the most
effective way to start those conversations.
opportunity. But not giving an upfront price no longer equals
a financial benefit for dealers. In fact, when competing for
static market share, this is one of the most effective ways to
raise sales volume. Online lead generation has hit a wall. The
leads dealers are buying are diminishing in quality, due to
the very nature of the lead generation business. (For a more
detailed discussion of lead generation, see Zag’s white paper,
“Lead Generation is Broken for Dealers and Customers.”)
The automotive sales industry cannot put the upfront
pricing genie back in the bottle, and dealers can’t continue
to optimize price on a per-transaction basis as a way to
grow their businesses. Key to making upfront pricing work,
however, is ensuring that the price is informed, fair and good,
if not great.
Today, Internet consumers have had a taste of what
anonymous access to information can do to empower them
in the new-car transaction. But that information still falls
short: one-quarter of car buyers who use the Internet for
research still don’t know why they paid what they did for their
cars.8 They want more: they want price.
8-9. Forrester Research, Auto Site Designers Must Rethink Price
Info, June 19, 2006.
Progressive dealers recognize that to grow market share they
must remove suspicion from the transaction and begin to
engage in trust-based conversations with consumers. And
they understand further that upfront pricing is the most
effective way to start those conversations.
Roger Penske, chairman of United Auto Group Inc., the
nation’s second-largest new-car dealership group, embraces
upfront pricing. In a 2005 Washington Post article11, Penske
said car companies should implement no-haggle pricing and
selling across the board, because that’s what consumers want.
“The closer we can get to one price in this business, the better
we are going to be long-term,” Penske said. “Such pricing
calms the consumer because the consumer sees the price,
knows the price.”
Another auto retailing pioneer—Sid DeBoer, CEO of
Lithia—has launched L2, an Internet-based company
committed to bringing upfront pricing to the used car
market. L2 offers transparency in every transaction,
including availability of a broad selection of popular late
10. Kelley Blue Book; www.kbb.com
11. Warren Brown , “Do Automakers Grasp Why ‘Employee
Discounts’ Worked?” The Washington Post, August 14,
2005.
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White Paper 03 The Case for Upfront Pricing
model used vehicles, clearly marked “negotiation-free” prices
based on current market values, and a number of other
consumer-friendly policies.
Further examination of how upfront pricing can affect dealer
operations and the dealer/consumer relationship underscores
the benefits of disclosing a bottom-line price upfront:
• If price is pre-determined, dealers can spend their
time with the customer telling them about the car
they just bought, getting them excited about the product,
and seeding future sales and referrals rather than spending
that time haggling across the table.
Potential dealer resistance to upfront pricing comes from
an adherence to the practice of maximizing profit per
transaction, an outdated model. Others wonder whether
giving an upfront price might just cause buyers to take
it to the next dealer and use it as a negotiating tool. But
research suggests that most consumers don’t like to haggle.
A university study13 investigated consumer preferences for
negotiating the purchase of a new car versus purchasing the
car at a fixed-price dealership. Researchers found that most
consumers strongly prefer not to negotiate the purchase of
a new car and would pay substantial premiums to avoid this
experience.
“The closer we can get to one price in this business, the better we
are going to be long-term.”
- Roger Penske, United Auto
• Dealers who engage in upfront pricing don’t have to spend
personnel time negotiating the price. Decreased staff time
results in lower costs and higher productivity.
• Upfront pricing drives down marketing costs, especially
with the introduction of performance-based marketing
programs premised on providing that upfront price.
• Theoretically, if dealers are able to reduce personnel,
commission and marketing costs, they can lower their
prices even more and still maintain (or increase) margin.
The result is a domino effect: by lowering prices and
offering them upfront, dealers can take market share from
competing dealers, and the cycle continues.
• Dealers achieve higher close rates. Infiniti of Tyson’s
Corner enjoys over a 35 percent close rate on leads that
come from upfront pricing; the general manager reports
that upfront pricing customers arrive at the dealership
much happier than others12.
Looking Toward the Future –
‘Relevance’ and Pricing Transparency
The general consumer perception is that dealers are
disingenuous about pricing. Recent research confirms that
consumers still don’t have an objective point of reference
when price is at issue; the majority are willing to cede greater
profit to dealers than dealers actually expect14. If dealers
are to thrive in a price-conscious environment, they must
reinvent their approach to the consumer, shift gears for the
commoditized market, fundamentally change their cost
structure, and restore trust and confidence in a customerdealer relationship that has too often been adversarial.
For dealers, the fear factor around upfront pricing is that
it compels them to offer a price that isn’t always their best
negotiating position, and that they’ll need to surrender their
margins to be profitable under this model. But that thinking
is archaic; it doesn’t acknowledge the new realities of how
consumers are shopping online. (See Zag’s white paper,
“Long Live New-Car Profitability.”)
This dynamic can transform showroom activities, where a
preponderance of sales time isn’t spent selling cars but rather
tap dancing around price. Instead of spending three hours
trying to get an extra few hundred dollars on one car, dealers
can spend that time selling several cars and focusing on
delivery. The bottom line is that if dealers offer upfront price,
dealers won’t have to “deal.”
12. Zag interview with John Gwinup, general manager of Infiniti 13. Devavrat Purohit, Harris Sondak, “Fear and Loathing at
of Tyson’s Corner, Vienna, Va.; used with permission.
the Car Dealership: The Perceived Fairness of Pricing
Policies,” paper presented at Washington University,
Feburary 1997. Available for download at http://home
business.utah.edu/mgths/publications.htm.
14. Zag data, survey of 1,000 consumers conducted by Synovate
eNation, April 2008.
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White Paper 03 The Case for Upfront Pricing
Conclusion
The automotive retail industry recently commemorated
a century of operating under the franchise system—one
hundred years that saw remarkable changes in the cars
themselves but relatively few in the ways they’re sold.
was one of the most successful auto retail initiatives in
recent history. At its core, this program was upfront pricing
consumers could trust. Those in auto retail who reject
such developments and resist upfront pricing risk market
irrelevance and, over time, a likely exit from the business.
Of late, however, the changes in auto retailing have come
fast. The advent of the Internet has diminished the dealer’s
frontline role as product information gatekeeper; shoppers
now seek—and have obtained—an informational advantage
online. Nearly nine out of ten shoppers are referencing the
Internet as their first step in the auto purchase process.
Pricing transparency is both inevitable and profitable. It
offers a better buying experience for consumers and a more
efficient selling experience for dealers. On a macro level,
upfront pricing is beginning to trigger a powerful ripple
effect across automotive retailing. With the haggle gone, the
role of the commissioned salesperson changes dramatically
(read: flirting with extinction) and, accompanying it, the
prospect of dramatically streamlined dealer operations.
Satisfied consumers mean higher sales volumes over time.
Because dealers are giving consumers what they want, close
rates and repeat business will grow accordingly.
To take advantage of this trend among online shoppers,
smart dealers are embracing upfront, good-to-great,
informed pricing. For example, Ford’s “Employee-Pricing”
As mentioned earlier, according to Forrester Research,
consumers who understand car prices are happier with their
vehicles and their dealers. They feel significantly better about
their car-buying experience and are more likely to purchase
from the same dealer again. Upfront pricing is the linchpin
to making this happen and the key to thriving in automotive
retailing’s new world order.
Question on page 4
Q: What’s the difference between these two cars?
A: The price.
And what are they looking for most avidly as they triangulate
OEM, dealer and third party websites during their research
and auto purchase process online? Pricing information.
With the Internet effectively neutralizing the geographic
exclusivity the franchise system was set up to ensure, savvy
dealers recognize that there’s no reason for consumers to pay
more for a car based on where it’s bought and sold, especially
when it’s beginning to dawn on the industry that the car itself
is a commodity.
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