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The push for simpler sales

New car-shopping services, both online and "offline," are springing up to alleviate two persistent problems in the auto industry: Customers don't trust the sales force, and they dread the buying experience.

Those are really the symptoms of a deeper problem: Dealers are often overstocked with unwanted models, and must charge more to cover the extra costs of keeping them on their lots.

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So automakers and independents, including family dealerships, large corporate dealer groups, and brokers of many stripes, are trying to capitalize on ways to give consumers exactly what they want without the hassle.

Ford and DaimlerChrysler are working on methods to bring factory-order delivery times down to as little as 15 days, to allow more buyers to order the car of their dreams from the factory, rather than pick from what's on dealers' lots.

And new- and used-car dealers are experimenting with Saturn's no-haggle pricing in an effort to prop up car prices.

That strategy is working with used-car sales, because each vehicle has its own history and character. But one-price, new-car dealerships can't compete when nearby rivals undercut their prices on identical machinery.

Automakers are now working to eliminate the competition by buying up all the dealers in certain markets, allowing franchises to expire, and setting up their own Web-based retail systems.

Distribution is the last major link in the auto industry that has not been overhauled for efficiency, and by some estimates accounts for as much as 30 percent of the cost of a new car.

Currently, automakers guess which models will generate the most consumer interest, then build lots of them, in various colors and trim levels. The new vehicles are shipped to car lots, where dealers must finance the costs of keeping them whether they can sell them or not.

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When the automakers guess wrong, they offer big incentives on slow-selling models, trim lines, or even colors.

That's advantageous for consumers, as long as they aren't picky.

But in industries all across the economy, consumers have greater expectations of getting more of what they want, not less.

So the winning companies may be those that allow consumers to "pull" the products they want through the distribution system, rather than "push" whatever they can build onto consumers.

Where to turn

Pricing information and orders

Pricing information and specs

(for new and used cars)

Cost-of-ownership information

Reviews/help choosing what car

fits your needs

Used-car pricing, availability

Auto insurance

(c) Copyright 1999. The Christian Science Publishing Society

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