Reinventing How Dealerships Buy and Sell Vehicles

Steven Spielberg

There has been much written in recent months about the sad state of the automotive industry in the United States, as GM, Ford, and Chrysler struggle to realign their business models to the realities of the marketplace in 2009 and beyond.

Certainly, automotive dealerships have also faced rough business conditions as fewer people are buying cars. Even interested car buyers are having a harder time securing credit. J.D. Power’s has estimated that vehicle sales in 2008 decreased to 13.2 million sold, compared to a 2007 total of 16.1 million. Many dealerships will close in 2009. Those who survive the downturn in our economy, will be those who are leaner, have secure financing in place, or are self financed, and who have leveraged the efficiencies and promotional opportunities available on the Internet and reinvented their business to be better aligned to what customers expect.

David Vahman, President of WebXloo, has seen an increase in business in 2008, as more innovative dealers leverage technology to increase their exposure in local markets and improve their efficiency. WebXloo offers web based sales and marketing tools for dealers and, as with many industries, this technology transition at the 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 visibility to their customers. “Dealerships today are able to 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 Internet potential going much further than a basic website. “Two things that we are seeing that are truly transformational in the automobile industry is the widespread consumer usage of mobile technology and the ubiquitous availability of pricing information, for both the consumer and the dealer.” As Mr. Vahman explains, “The sweet spot for dealerships is intelligent buying of vehicles.” Mr. Vahman continued, “Consumers today who are purchasing vehicles have a very clear understanding of what they should pay for a vehicle, through quick Internet research. The dealer who can buy inventory that is in demand, at a competitive price, is much better positioned to remain profitable. Our mobile SlingShot device, powered by the AutoXloo software, gives dealers business intelligence anytime, anywhere, whether they are purchasing a vehicle from an individual or at the auction.”

Certainly most people recognize the difficulty traditional newspapers are having as they try to remain relevant when fewer and fewer people subscribe to the local newspaper, their audience demographics continue to skew older and older, and more and more people get their news from the Internet. Craigslist has made classified ads almost irrelevant, and there is a trend toward specialty magazines and publications moving away from print to online distribution exclusively. Cox Enterprises announced earlier this year that they will discontinue the publication of AutoExtra and AutoMart. And there has been continued speculation that the classic AutoTrader magazine, that many of us grew up with, may also be transitioned to an online model only.

Noting these changes, Mr. Vahman offered further insight into the changing market for dealerships. “Our software, allows the dealer to compare real time market pricing information from Internet sources that customer use to make buying decisions. Understanding pricing from your customers’ perspective puts you in a much stronger negotiating position.

AutoXloo’s Market Report provides a comprehensive analysis of the vehicles for sale in a specific geographic region from various online services. The Market Report software queries listings on the Internet, based on the dealership’s current inventory, and presents pricing results in a convenient dashboard in both detailed and summary view. The report is generated instantly and live each time a dealer evaluates a specific vehicle.

“We help dealerships list their vehicles online, which helps them generate more leads and sell more cars”, Mr Vahman continued. “From the dealership perspective, our tools adapt readily to their workflow, enabling them to work more efficiently, reduce cost, 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 dealerships. It just makes sense since almost every one of their customers begin their search for a vehicle online.”

Mr. Vahman explains, “It’s easy to view technology as an expense, especially in these difficult times. What separates our tools, is our solutions are at the forefront of the primary drivers for a dealership, which is driving sales. While it can be difficult making decisions on what technology in which to invest, it’s easy for us to demonstrate to our customers that not only can they generate immediate results with our tools, but they are much better positioned for long term growth.”

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