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Competition in the U.S. Auto Industry

Competition in the U.S. Auto Industry

INTRODUCTION

In early 2000, the automotive retailing industry seemed on the front edge of

fundamental change. For a number of years, there had been rumblings of dissatisfaction

among vehicle buyers with their purchasing experiences at local franchised dealerships.

Many customers felt price haggling and high pressure sales tactics distasteful or

intimidating. Automakers were looking at ways to overhaul their franchised dealer

networks to squeeze some of these distribution inefficiencies out of the industry value

chain. But other hometown dealers were facing unprecedented competition from

megaretailers, like, AutoNation buying services that so happen to threaten to reshape the

role and function of franchised dealers.

Meanwhile, manufacturers had launched Internet sites where vehicle buyers could

get information; compare models and features, and be referred to nearby dealers for price

quotes. That is when thousands of franchised dealers had joined the dealer networks of

the direct sales and were providing the vehicles sold online. These developments

reflected a growing understanding among both manufacturers and franchised dealers that

the Internet had changed the dynamics of automotive retailing.

CURRENT STRATEGY

·	Online competition of dot-com companies
-Microsoft’s CarPoint	-CarPrices.com	-CarOrder.com
-Autobytel.com		-Car.com		-DriveOff.com		
-CarsDirect.com		-Greenlight.com	-StoneAge.com

·	Remain price competitive
·	Dealer pricing of new vehicles
·	The service departments
·	National Automobile Dealers Association (NADA)
·	Automobile Buyer Demographics
·	Block Manufacturer-owned dealerships
·	E-Commerce strategies of vehicle manufacturers

INTERNAL ANALYSIS

Strengths

·	Cars are lasting

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Word Count: 1441

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