HowtheInternetIsRevolutionizingAmerica’sUsed-CarIndustryHowtheInternetIsRevolutionizingAmerica’sUsed-CarIndustry..IntroductionYouknowthestereotype.Walkontoaused-carlotandcomefacetofacewithasmilingsalesmanwearingtheinfamousplaidsportcoatandatiethatmayormaynotmatch.Nonchalantlygrin-ningfromeartoear,hewelcomesyouwithaheartyhandshakeandperhapsevenaslapontheback,andbywayofintroduction,dropsthelinethatmanyofushaveheardatonetimeoranother:“HaveIgotadealforyou!”Today,thatwell-wornphraseisfinallytrueformillionsofconsumersshoppingforusedcars.Butinsteadoftheused-carsalesman’svoice,itiscomputer-aided—thevoiceoftheInternetanditreallydoes“haveadealforyou.”Bygivingcarbuyerssearchableaccesstomillionsofvehicles,theInternetisradicallychangingthe$360billionused-vehicleindustryintheUnitedStates.TheInternetistransforminglongestablishedpracticesofvehicleremarketing—theprocessofresellingpre-ownedvehiclesinretailandwholesalechannels.Itispushingactivitythattraditionallytakesplaceindealershipsandatphysicalauctionsitesintothevirtualdomain.Intheretailsector,individualconsumersareforgoingclassifiedadsandhitormisstripstolocaldealersand,instead,takingtheirvehiclesearchesonline.AccordingtoGartnerGroup,32percentofU.S.householdsthatpurchasedusedvehiclesfromSeptember1999throughMarch2000usedtheInternetatsomepointduringthebuyingprocess.Inthewholesalesector,dealersarebeginningtoperuseandbuyatonlinewholesaleauctionsitesinlieuofbimonthlypilgrimagestophysicalauctions.Findingsinayear2000A.T.Kearneystudyconfirmit—16percentoffranchiseddealersreportedbuyingusedvehiclesonlineatawholesaleauctionwebsite.Withfundamentalchangeunderway,industryplayersareaggressivelymaneuveringtocapturetheopportunity.Considerthatinthepastsixmonths,nearly20partnershipshavebeenannouncedinthee-remarketingspace.CobaltandGEformedMotorPlaceAutoExchange,AutoTradeCenterhasteamedupwithHondatosellusedcarsonline,andManheimboughtLemonBusterstobuilditsinspectioncapabilities.Theseplayersknowthatitisaneweraandanewgame.Itisallaboutpositioningandbuildingaproductand/orsupplyadvantage.Inthispaper,wepresentA.T.Kearney’sperspectiveonthechangingused-vehiclemarket.Webeginbydescribingkeydevelopmentsine-remarketing—theweb-enabled,used-vehicleremarketinglandscape.WehighlightnewbusinessopportunitiesmadepossiblebytheInternetandexplainhowbothnewandtraditionalplayersarepositioningtocapitalizeontheseopportunities.Finally,weexplorethefourkeyfactorsfore-remarketingsuccess.DevisedbyA.T.Kearney,thesefactorsarefundamentalrequirementsforanycompanyintendingtopursuealong-termstrategyforremarketingvehiclesintheneweconomy.HowtheInternetIsRevolutionizingAmerica’sUsed-CarIndustry..-TheInternetisthesinglemostimportantforcedrivingchangeintheused-vehiclemarket.Itallowsgreateraggregationofused-vehiclesupplyanddemand,createsvast“virtual”used-carlots,andenablesefficientandsecureonlinetransactions.Whetheritisonepersonsellingthroughtheclassi-fiedads,adealersellingtoconsumers,orawholesalerhaulingusedvehiclestoanauctionsite,theInternethaschangedthisindustry’sbusinessdynamics(seesidebar:OurNation’sUsed-CarLot).Thereislittlemysteryastowhythereisnonstopgrowthintheonlineremarketingindustry.Itistheoverwhelmingbenefits—whichareenjoyedbybuyersandsellersalike:OnlinesolutionsslashtimeandcostsT...
