AutoNation Inc., considered the world's largest automotive retailer, is launching an online buying service designed to give consumers one-price, no-haggle access to new and used vehicles nationwide.
The service, AutoNationDirect.com, will allow consumers to research, shop, schedule test drives, arrange financing and insurance, and order home delivery of vehicles via computer.
At stake is an Internet automotive sales market that is forecast to grow from a current 15,000 annual sales to 500,000 sales a year in 2003, according to auto industry analysts. Nearly 16 million new cars and trucks and an estimated 40 million used vehicles were sold by dealers in the United States last year.
AutoNation began experimenting with Internet sales last August. The company posted $350 million in Internet sales last year and is projecting cyberspace sales of $750 million this year. With AutoNationDirect.com, the company says its Internet sales will grow to $3 billion annually by 2002.
"AutoNation is making a profit on every vehicle it sells on the Internet," Steven R. Berrard, AutoNation's co-chief executive, told reporters yesterday. "Our online margins are comparable to those we find at [traditional] retailers," he said.
AutoNation's entry into the cyberspace bazaar is significant because the Florida-based company "brings tremendous resources" to an emerging market that largely will determine how vehicles are bought and sold in the future, said Mike Morrissey, spokesman for the National Automobile Dealers Association.
"It's not a surprising development in the use of the Internet," Morrissey said. "There are many individual dealers doing this. But AutoNation is bigger and probably can do more."
On any given day, AutoNation carries an inventory of about 93,000 new and used vehicles, representing virtually every brand and type of car and truck sold in this country.
AutoNationDirect.com, which will debut in Tampa before a national rollout on Oct. 1, will give computer-ready consumers direct access to that inventory on a "low-cost, no-haggle" basis, Berrard said.
To facilitate that access and rapid response to consumers, AutoNation has in place 270 Web sites, 45 AutoNation USA superstores in 13 states and 380 franchised dealerships in 20 states. The company will assign more than 600 "Internet sales guides" to handle cyberspace consumers, with the objective of responding to initial consumer queries within an hour of receiving them.
Currently, auto salespeople respond to Internet inquiries an average of two hours after receiving them, according to industry surveys.
AutoNationDirect.com is promising a full package of "shopping tools" to help consumers make their choice. All matters of finance and insurance will be handled online, without the need of shuffling papers between buyer and seller, the company said.
Vehicles can be reserved with credit cards, and test drives also can be scheduled online. All available information on the vehicle under consideration -- including pricing, reviews and safety evaluations -- will be available online.
The selected vehicle still will come from a dealer. But with AutoNationDirect.com, consumers can arrange for home delivery instead of having to go to a dealership to pick up their vehicle.
AutoNation shares fell 6 1/4 cents yesterday, to $16.87 1/4.
Steering to the Net
AutoNation expects its car sales over the Internet to quadruple over the next two years.
1998 $350 million
1999 $750 million
2000 $1.5 billion
2001 $3 billion
NOTE: 1999-2001 figures are projections.