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Case Study: Auto Retailing Industry

            The purpose of the Case Study: Competition in the U. Automotive Retailing Industry is to show the rise in the internet by consumers to buy cars and automotive dealers and franchises to sell cars. This case analysis will take the form of an External Analysis (Specific Environment) from the perspective of the traditional brick and mortar franchise dealership and what they must do to stay competitive and relevant in the future of the automotive retailing industry.
             Since the invention of the Model T by Henry Ford in ------ the traditional brick and mortar dealership has had a monopoly on the auto retail industry with its only competition being other brick and mortar retailer. Whether it is franchise dealerships or small town dealers, automotive retailers have always known where they stood in the industry and what to expect from its competitors. The age of the internet brought an end to this normalcy and will bring and end to the brick and mortar dealers unless they adapt and embrace the internet and the new type of consumer it has spawned.
             In the past four to five years there has been an influx of internet based automobile companies entering the automobile retail industry. These companies have traditionally come in the form of lead generators, direct sellers, and hybrid sites. The internet based companies are doing the job of generating sale for partnered automobile dealers and making profits through advertising and sponsorships and dealership fees (lead generators), selling cars directly to customers with the help of the dealership and making profits through transaction fees and advertising and sponsorships (direct sellers), or have done a combination of both and covered the spectrum of the internet based automobile retail market (hybrid). In 1999, 2.7% of the 15.5 million new vehicles sold were sold through the internet. Further evidence of the coming of online auto dealers was the fact that Forrester Research predicts that internet sales would total $12 billion dollars in 2003 coming from its 8 million customers and 500,000 automobile sales.


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