Musings

May 1, 2010

What if.

Research points to the steady growth of Internet car buying. There are the eBays, Craigslists, AutoTraders, CarsDirects, Cars.coms and others ad infinitum offering new, near-new, old, antique, rebuilt, restyled and so on vehicles. As well, virtually every automaker provides its models with retail base and option add-on prices on its own website. Brick-and-mortar dealers, of course, have for several years hawked their vehicles online.

Consumers can research any car, truck, SUV or CUV whenever they want with the click of a mouse or fingering across an iPhone, iPad or any other such handheld Web-connected device. They can know what’s available at what price and from whom. Shopping for a new vehicle may mean just going to a dealer for a test drive or two, determining whether the vehicle fits the bill and then going home or to the coffee shop and doing a price/availability search. Deals can be made practically without ever haggling with a salesperson.

Because the Internet consumer is becoming even more knowledgeable, car dealers will have to rethink their pricing structure, maybe to the point of where the MSRP evolves into a straight RP — retail price, no “suggested” needed.

Internet sellers of aftermarket products abound, too, and do cut into the sales of brick-and-mortar businesses. But such sales cater to the do-it-yourselfers; the majority of buyers of aftermarket body kits, paint protection films, sunroofs, etc., not just need but want a professional to install the product. So that should ensure the survival of the independent restyler, yes?

What if.

Some of the vehicle-selling Internet e-tailers will disappear in the near future because of better competitors who will put them out of business, or through mergers or acquisitions. Whether that consolidation leads to a market where vehicle prices become set — as in a no-haggle sale — and dealer/manufacturer add-on packages, such as body kits, in-car entertainment, leather interior upgrades, window films, sunroofs, etc., become check-off boxes with their higher, no-discount pricing is a matter to ponder. Could that, though, lead to restylers who would be given set prices/fees determined by the dealer/automaker rather than vice versa, a la Wal-Mart, which is known to dictate pricing to suppliers in order to keep its prices low? Or might that even lead to dealers or automakers themselves creating their own in-house aftermarket operations, rather than subcontracting with independent restylers, thus reversing the “outsourcing” trend?

It seems unlikely that carmakers and their dealers would involve themselves in operating their own restyling businesses (although there are some dealers who already do, quietly). They’ve done more to become lean operations rather than larger one-stop ones.

But then, the swift onset of the recession of 2008-09, its attendant drop in consumer spending and the 10% unemployment mark also seemed unlikely. And Toyota’s sudden onslaught of woes seemed unlikely. And GM and Chrysler both using bankruptcy protection at the same time seemed unlikely.

So is it that unlikely that growing Internet car sales could lead to straight retail price tags, and to car dealers, seeking larger profits, setting a Wal-Mart pricing scheme on its restylers, or doing the work themselves?

What if?