Internet brokers working with established car dealers in Germany could achieve revenues from new-car sales of 8 billion euros (about $9.9 billion) in the mid-term, a study says.
The trade in used cars on the Internet has been routine for years. Now new-car brokers are following suit, says a study by the Center Automotive Research, which is based at the University of Duisburg-Essen in Germany.
The brokers can offer big discounts on new cars because they reduce sales costs to a minimum and have a very lean service, said Ferdinand Dudenhoeffer, the center's director.
The discounts average 17 percent off the 25 best-selling new cars in Germany and are as high as 20 percent off a new Volkswagen Golf, Dudenhoeffer said.
Buyers choose a new car on the Internet and put together their individualized choice of equipment. The buyer then orders, pays for and picks up the vehicle at an established dealer who works with the broker. The dealer pays the broker a commission.
Dudenhoeffer said this form of sales has high potential in the market, although automakers currently are not heavily involved with this option.
He calculates that in a German new-car market of 3.2 million units a year, with sales of 40 percent to private customers, about 385,000 new cars could be sold though Internet brokers in the mid term, achieving 8 million euros in revenues, based on an average price of 20,000 euros per car.
The figures assume that Internet brokers become just as well-known as Internet companies that sell used cars have in recent years.
The Center Automotive Research surveyed 405 car buyers for the study. Some 63 percent said they would buy their new car through an Internet broker if there were a price advantage of 10 percent compared with buying direct from a traditional dealership. But more than two-thirds of those surveyed were not aware of Internet brokers.