Car buying in Europe will be transformed by a new wave of Internet sites run by independent dealers and other entrepreneurs.
One out of every five new-car purchases in Europe will be made on-line by 2003, according to Fletcher Research, a UK firm that monitors marketing trends.
Car buyers in high-price, low-tax countries such as the UK can save thousands of euros by purchasing in low-price, high-tax nations such as the Netherlands. Internet access makes the process easy.
'We have already seen a dramatic increase in demand for our vehicle information,' said Alan Crane, chief executive of online automotive information supplier Carspecs.com. in the UK. 'Judging by the huge number of inquiries we are getting from many other countries, online car sales will be the biggest phenomenon across the European motor industry in the year ahead.'
Internet usage levels are highest in the smaller car markets of Scandinavia, where buyers often live hundreds of kilometers from their nearest dealership. In bigger markets, online activities are more fragmented.
Finland has led the way in many automotive applications, due largely to the launch of Autodata, a used-car valuation service owned by the Kalamazoo Computer Group, and now used by over 80 percent of new-car dealerships there.
Autodata's information on stocks and prices is supplied to a website called AutoVista and the text channel MTV3 on satellite television. Car importers, government agencies, finance houses and banks, and insurance companies also use it.
The Danish Automobile Dealers' Association has also sought to play a centralized role in the development of a national web network. Its website, www.daf.dk, features a multi-marque listing of franchised dealers, together with vehicle finance information and car sales data. It also offers private motorists an opportunity to advertise used cars on the site and link to an online auction facility.
Things are moving more slowly in Europe's largest markets. In Germany and Italy, for example, there are numerous independent and trade association sites dealing with online vehicle services.
In France, sites such as www.autovalley.com, www.bonjour.fr and www.procar.com offer used-car listings and links to car dealers. More innovative is the www.cyber-casse.com service offered to vehicle dismantling and scrappage companies.
Around 100 companies - each paying a fee of FF8,400 (euro 1,270) - have joined the service. They receive a digital camera, personal computer and the right to display photos and information. Motorists and repairers in search of used components can access information and pictures free of charge.
Another French car group, Club Auto, has shown similar innovation in taking its centralized car-buying service onto the web at www.amtt.fr. The concept is simple - if unusual - as it deals direct with the automakers. Club Auto negotiates with manufacturers to secure customer discounts ranging between 5-12 percent.
Motorists can buy online with free nationwide delivery of all French brands. Delivery of non-French vehicles is free in the Paris area only. Together with warranty and finance services, the facility has proved popular, with thousands of new cars already sold online.
Belgian David Dehaeck and two American business associates have taken a different approach. Their site, www.auto3000.com operates in Belgium and the Netherlands and allows buyers to express interest in specific vehicles.
The requests are distributed to car manufacturers, who instruct dealers to respond with their 'single best price' for the vehicle.
Dehaeck said: 'The site eliminates the haggling process that so many people fear and simply finds them the best price for the car they want.'
The company plans to expand into the UK in February, followed by Germany in June and France in September. Discussions are underway to launch in Scandinavia and southern Europe in 2001.
It is unclear whether USA-based Autobytel - which has launched reference-only sites in the UK and Scandinavia - has similar plans to sell online. The franchise for the Netherlands has been purchased by PONS, an independent dealer group holding franchises for VW, Audi and Porsche. Online sales from its dealerships may be a possibility.
Expansion of online car sales will be driven this year by the growth in pan-European services.
The German web service www.autoscout.com allows consumers to search for new and used vehicles in several European countries. Prices for specific vehicles are all shown in euros but several languages are used. Users can define the radius of their search at distances of up to 200km.
The British market may be first to be seriously affected by online sales of cars imported from other European countries. UK dealers say they are being hurt by growing awareness among car buyers of high price differences between the UK and other European markets.
The first quarter of 2000 will see the launch of several websites created to help UK motorists buy cars online. These include www.totalise.com from an Internet service provider, and www.carbuster.com from the UK's influential Consumers' Association.
Business links have been established with a small number of franchised dealers in mainland Europe who will supply right-hand-drive, UK-specification vehicles for delivery to Britain. Motorists will typically save a minimum of 10-20 percent purchasing this way, compared with the traditional way of negotiating with a local dealer. Both operators expect to sell 'several thousand cars' this year.
The British company operating www.orient-vehicles.com, which specializes in sales of Japanese cars, is diversifying into European car imports and will trade through www.continental-cars.com.
International Boeki Corporation, the biggest wholesale exporter of used cars from Japan, is taking a different approach. The company purchases 20,000 used vehicles year from the right-hand-drive Japanese market. Several thousand dealers in 60 right-hand-drive markets around the world can access www.ibcjapan.co.jp and view illustrated reports on cars and order them online.
IBC has achieved annual right-hand-drive sales worth 100 million (euro 160 million). It has now established a duplicate business in Florida to export left-hand-drive vehicles to dealers in South America and Europe. Cars are purchased from rental companies and fleet operators in America.
The scale of IBC's European plans, however, is small compared with OneSwoop. This new Internet business has been set up by Roeland and Alexander van de Ven, who previously owned major VW, Audi and Toyota dealerships in Amsterdam. The partners' business concept has attracted more than 30 million of venture capital and will launch in the UK at the end of January.
Visitors to www.oneswoop.com are offered right-hand-drive, UK-specification cars at discounts of up to 40 percent. Finance is offered through the banking arm of one of the UK's biggest clothes and food retailers, Marks & Spencer Financial Services. Deposits are held by Fortis Bank, part of the Fortis Group, which ranks among the top 15 financial institutions in Europe.
All vehicles supplied through OneSwoop are monitored and verified through SGS of Switzerland, the world's largest testing, verification and certification center. SGS also monitors the delivery services provided by automotive transport company Transcars.
Administration is handled through processes and e-commerce systems designed by Andersen Consulting, whose European managing director, Vernon Ellis, is on the board of the new venture.
'OneSwoop represents an entirely new way of buying cars in Europe,' said Alexander van de Ven. 'We think consumers will appreciate the increased price transparency, flexibility and convenience that our new system offers. Hundreds of dealers have already signed up with us in order to get access to the entire European market.'
Car buyers will initially select only from the Audi/VW, Ford, Peugeot, Rover and GM ranges. Vehicles are sourced from franchised dealers in Holland, Spain, Ireland, Denmark and Greece. In late March the network will be extended to Germany and France, and other markets will follow later in the year. OneSwoop plans to invest euro 50 million in its launch year and 'tens of thousands' of vehicle sales are forecast.
The OneSwoop operation is unlikely to be welcomed by the automakers, however. 'Manufacturers may oppose the concept to begin with,' said van de Ven. 'But with 20 percent overproduction and 40 percent overcapacity, they cannot afford to fight the prospect of increased sales. I expect manufacturers to become our allies within months.'