Car industry urged to use Web to win new customers

Motor manufacturers must embrace the Internet if they are to counter the threat of independent dealers which have been boosted by...

Motor manufacturers must embrace the Internet if they are to counter the threat of independent dealers which have been boosted by changes to European Union legislation, analysts warned last week.

The industry's traditional way of doing business in Europe has been threatened by the EU's move to abolish block exemption, a rule which allowed manufacturers to maintain preferential ties with exclusive franchised dealers.

The legislation, which comes into effect next year, will allow independent dealers to operate on a level playing field with manufacturers' franchise dealers.

Analyst group Ovum said car manufacturers will, as a result, have to overcome their traditional resistance to adopting new technology and consider implementing online initiatives.

Henning Dransfield, senior analyst at Ovum, said electronic media and streaming media via the Internet can help to drive marketing and promotions to new and broader audiences.

"Investment in Web sites requires very few sales for a complete return on investment," he said.

"A less quantifiable, but no less important, factor is that raising the car brand's image with young consumers makes the Internet very attractive.

"The use of streaming media, which is in effect visual or audio delivery of information direct from the home site with no need for additional software, means people can quickly and easily see and experience new car models."

Dransfield said the car industry is starting to embrace new media technology for promotion, training and use during events such as Formula One Grand Prix. But, he added, there is still some resistance and a feeling that proprietary dealer ownerships are the only way to sell cars.

"There needs to be a change in the culture of people within the industry coupled with increasing use of new media to promote cars, train staff about cars and showcase Formula One vehicles' capabilities," Dransfield said.

"Although most consumers will still want to test drive a car, using new media applications to set the scene may make the difference between them coming to see your brand of car, or going somewhere else."

Read more on IT legislation and regulation

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.