Automotive News EuropeAUTO-BY-TEL CORP., a US-based Internet car-buying service, is looking for partners to set up similar services in Europe.
It already has one European backer, Inchcape Motors International plc. Inchcape and three US firms have invested $13 million in Auto-By-Tel to develop websites for selling cars to Europeans. Auto-By-Tel President Peter Ellis expects to have one or two joint ventures in Europe by the end of 1998.
Auto-By-Tel is the car-buying service for three online services -America Online, CompuServe and Prodigy.
Part of the $13 million will be used to promote Auto-By-Tel as a brand name and to build critical marketing alliances on the Internet. The company faces competition from Microsoft and from carmakers who are establishing vehicle-buying services on the Internet.
'We are spending $500,000 a month on technology development and on our site,' said Ellis. The company lost $6 million in 1996, but Ellis predicted 1998 revenue would reach $30 million.
Auto-By-Tel has 2,641 dealership subscribers in North America. They pay $500-$2,500 per month, plus $2,500-$4,500 annually. The company plans to raise this to no more than 3,000 dealer subscribers.
'Internet use is not as prevalent in Europe as it is in the USA,' Ellis said. 'But Europe is overdealered, and people don't like the purchase process.' Some version of Auto-By-Tel's buying service with its no-haggle price quotes would appeal to European consumers, he said.
Inchcape has been 'looking at the Internet in some detail because there is a clear move away from the more traditional methods of car retailing,' said spokeswoman Johanna Lavender. 'We were pleased to make an investment in this area. We will learn how they work and how their service operates.'
Inchcape is the world's largest independent car importer and distributor. Last year the group sold 210,000 new and 65,000 used vehicles and made an operating profit of $202 million.
The group represents Chrysler, Daihatsu, Ferrari, Kia, Mazda and Toyota in the UK; and Daihatsu, Mazda and Proton in France and Belgium. Inchcape also owns several BMW dealerships in Germany.