More Than Five Million New-Vehicle Shoppers in U.S.A Use the Internet to Shop for New Vehicles
The J.D.Powers & Associates Report released on 23rd Aug'99. reveals that more than five million new-vehicle buyers will use the Internet this year to gather information to help them decide what vehicles to purchase, according to the J.D. Power and Associates 1999 New Autoshopper.com StudySM released today. According to the study, the percentage of new-vehicle shoppers using the Internet to help them shop for a vehicle increased from 25 percent in 1998 to 40 percent during the first quarter of 1999 and is projected to be more than 65 percent by the end of 2000.
The study reveals that the average Internet shopper visits six automotive Web sites and spends more than four hours looking up automotive information online. This indicates that new-vehicle shoppers are relying more and more on Internet research to help determine what automotive make and model to purchase
"More than one-third of the Internet shoppers surveyed report that they crossed at least one vehicle off their shopping list as a direct result of information they found online," said Chris Denove, director of consulting operations at J.D. Power and Associates. "This is bad news for manufacturers and retailers who want customers to test drive vehicles and not narrow their vehicle selections based on cold hard facts alone."
The growing influence of the Internet is likely to hit domestic manufacturers the hardest. The study shows that the more time a person spends online, the less likely he or she is to purchase a domestic vehicle. Overall, domestic manufacturers currently have approximately 70 percent market share; however, this share drops to 58 percent among Internet shoppers. Furthermore, only half the shoppers who submit a purchase request to an online buying service purchase a domestic vehicle.
"The Internet puts added pressure on manufacturers to deliver quality products and service" Denove said. "If a vehicle has a problem, you can bet it will be posted on the Internet, and that is going to hurt sales."
The study also found that the percentage of people purchasing their new vehicle through an online buying service more than doubled-from 1.1 percent to 2.7 percent since 1998-and may reach as high as 5 percent by 2000.
"Statistics show that the online buying services are saving people money, and since price is the primary concern among Internet shoppers, you can't help but to be optimistic about the future of online selling," Denove said
Overall, Kelley Blue Book is the most frequently visited automotive Web site, with half of all Internet shoppers visiting the Kelley Web site to gather vehicle information. Among online buying services, autobytel.com is the largest, accounting for 45 percent of all new-vehicles sold through an online service.
Despite all the optimism about the Internet, the study identifies a few areas where new-vehicle shoppers prefer doing business through traditional methods. The study shows that the number of new-vehicle shoppers using the Internet to finance their vehicle remains very low, and that most Internet shoppers do not intend to return to the Internet for help with maintaining their vehicle.

Headquartered in Agoura Hills, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting and customer satisfaction. The firm's quality and satisfaction measurements are based on actual customer responses from more than one million consumers annually.