咨询管理战略组织项目麦肯锡工具评估 wp_how_internet_revolutionize_S.pdf

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1、How the Internet IsRevolutionizing AmericasUsed-Car IndustryHow the Internet Is Revolutionizing Americas Used-Car Industry. IntroductionYou know the stereotype. Walk onto a used-car lot and come face to face with a smiling salesmanwearing the infamous plaid sport coat and a tie that may or may not m

2、atch. Nonchalantly grin-ning from ear to ear, he welcomes you with a hearty handshake and perhaps even a slap on theback, and by way of introduction, drops the line that many of us have heard at one time or another:“Have I got a deal for you!” Today, that well-worn phrase is finally true for million

3、s of consumersshopping for used cars. But instead of the used-car salesmans voice, it is computer-aidedthevoice of the Internet and it really does “have a deal for you.” By giving car buyers searchable accessto millions of vehicles, the Internet is radically changing the $360 billion used-vehicle in

4、dustry inthe United States.The Internet is transforming long established practices of vehicle remarketingthe process ofreselling pre-owned vehicles in retail and wholesale channels. It is pushing activity that traditionallytakes place in dealerships and at physical auction sites into the virtual dom

5、ain. In the retail sector,individual consumers are forgoing classified ads and hit or miss trips to local dealers and, instead,taking their vehicle searches online. According to Gartner Group, 32 percent of U.S. householdsthat purchased used vehicles from September 1999 through March 2000 used the I

6、nternet at somepoint during the buying process. In the wholesale sector, dealers are beginning to peruse and buy atonline wholesale auction sites in lieu of bimonthly pilgrimages to physical auctions. Findings ina year 2000 A.T. Kearney study confirm it16 percent of franchised dealers reported buyin

7、g usedvehicles online at a wholesale auction website.With fundamental change underway, industry players are aggressively maneuvering to capture theopportunity. Consider that in the past six months, nearly 20 partnerships have been announcedin the e-remarketing space. Cobalt and GE formed MotorPlace

8、Auto Exchange, AutoTradeCenterhas teamed up with Honda to sell used cars online, and Manheim bought LemonBusters to buildits inspection capabilities. These players know that it is a new era and a new game. It is all aboutpositioning and building a product and/or supply advantage.In this paper, we pr

9、esent A.T. Kearneys perspective on the changing used-vehicle market. We beginby describing key developments in e-remarketingthe web-enabled, used-vehicle remarketinglandscape. We highlight new business opportunities made possible by the Internet and explain howboth new and traditional players are po

10、sitioning to capitalize on these opportunities. Finally, weexplore the four key factors for e-remarketing success. Devised by A.T. Kearney, these factors arefundamental requirements for any company intending to pursue a long-term strategy for remarketingvehicles in the new economy.How the Internet I

11、s Revolutionizing Americas Used-Car Industry. - The Internet is the single most important force driving change in the used-vehicle market. It allowsgreater aggregation of used-vehicle supply and demand, creates vast “virtual” used-car lots, andenables efficient and secure online transactions. Whethe

12、r it is one person selling through the classi-fied ads, a dealer selling to consumers, or a wholesaler hauling used vehicles to an auction site, theInternet has changed this industrys business dynamics (see sidebar: Our Nations Used-Car Lot). There is little mystery as to why there is nonstop growth

13、 in the online remarketing industry.It is the overwhelming benefitswhich are enjoyed by buyers and sellers alike: Online solutions slash time and costsThe Internet promises to cut remarketing costs for vehicle supply owners by slashing both time andprocess costs. A seller who uses an online auction

14、channel rather than a physical auction can cutvehicle remarketing time by half, or more. The less time it takes to remarket a vehicle the less it costs.The vehicle owner who sells online can see 15 to 25 percent in cost savings due to lower inventorycarrying costs and depreciation. Process costs can

15、 be reduced as well. By selling a used vehicle earli-er in the supply chain, the owner can eliminate transportation and physical auction sales costs. Thesesavings can be anywhere from 30 to 40 percent of total remarketing costs, and the resulting overalle-remarketing savings can range from 45 to 60

16、percent of traditional costs, depending on wherein the remarketing supply chain an online solution is employed (see figure 1).Not surprisingly, wholesale vehicle supply owners are salivating over the opportunity to lowertheir remarketing costs. With a vehicle volume of 10 million units per year, at

17、a cost of $1,000 pervehicle, the potential industry savings could total more than $5 billion annually.Buying dealers stand to gain as well. Online auctions allow buying dealers to stock used-carinventories from home or the office at any hour of the day. Forgoing visits to a regional auctionreduces d

18、ealer cost of acquisition by an estimated $125 per vehicle, and, a used-car manager whospends time on the lot rather than at auctions will be accessible and therefore able to negotiate andapprove more vehicle sales.Locate-to-order used carsThe Internet promises similar perks for the car buying publi

19、c. In the past, a typical consumer hadto either surmount an exhausting search, traveling from dealer to dealer to find a good used-car deal,or stay at home thumbing through the classified ads. Either way, the consumer ends up settling forthe best vehicle they might find rather than the dream car the

20、y want. With online access to usedvehicles and online search capabilities, buyers can virtually locate their used dream car “to order.”With the push of a button, a used car can virtually be built to personal specifications. In fact, theentire supply base of used cars is becoming one giant virtual us

21、ed-car lot where a car buyer canspecify the make, model, year and options of a desired vehicle. A few seconds later, the computerhas located the desired vehicle or vehicles anywhere in the country. While complete access to all vehicleHow the Internet Is Revolutionizing Americas Used-Car Industry. in

22、ventories is not yet possible, there is sufficient inventory to whet most consumers appetites.Remember, more than 30 percent of used-car purchasers go online to shop for their used vehicle.One-stop shoppingThe Internet is making it cheaper and faster to review and purchase nearly all complementary v

23、ehi-cle servicesenabling customers to bundle vehicle financing, insurance, warranty, and registrationservices at the point of purchase. With more service offerings, competition among service providersincreases, which ultimately should mean lower prices for consumers. Also, automated selection toolst

24、hat provide side-by-side comparisons help used-car buyers choose from among several financing orinsurance suppliers. For instance, quotes from several insurance companies can be obtained andcompared online at A and I, eliminating the need to make phone calls toseveral local agents. And no more stand

25、ing in long lines at the DMV, thanks to links to registrationand title transfer services like T.Sellers reap residual valueFinally, used-car sellers gain access to a broader demand base distributed over a wider geographicregion. The entire country. Thus both casual and wholesale sellers can ask for

26、and get higher prices.Wholesale sellers can circulate their “virtual” vehicles among several demand groups. Casual sell-ers can do the same by posting their vehicle for sale on several websites, many of which are free.Consumers can check out online dealer sites like CarMax, which buys used cars from

27、 consumerseven if the consumer does not buy a car from CarMax. And in the near future, companies suchas Autotrader could offer to remarket consumer used vehicles through a B2B or C2B channel ifa casual sellers online listing fails to produce a sale.- The used-car industry is fast changing its focus

28、from simply remarketing to e-remarketing. The sup-ply chain is being shortened, virtual inventories are growing, new and more efficient players andprocesses are emerging, and more consumers and dealers are going online. To capitalize on theupheaval, companies are pursuing new strategic opportunities

29、 along the e-enabled vehicle supplychain. Three areas are getting the most attentiononline B2B auctions, e-tailing sites and auxiliaryservices (see figure 2).Online B2B AuctionsAn online business-to-business (B2B) auction is an e-commerce exchange in which wholesale sellerspost their vehicles for sa

30、le to wholesale buyers. It supplants the traditional physical auction process.Unlike other industries where online exchanges are a new way of conducting business, in the auto-motive industry they are only a slight variation from a process that participants are comfortable withand for which there is

31、already a supporting infrastructure. As a result, the movement toward onlinewholesale auto exchanges is happening quickly. How the Internet Is Revolutionizing Americas Used-Car Industry. Three groups are driving efforts in the B2B online auction space. Two of these, vehicle supplyowners and physical

32、-auction operators, have tremendous influence in the traditional physical auctionprocess. The third group, online remarketing service providers, is brand new to the e-remarketinggame. To understand what each group is doing, it is helpful to consider the market from theirperspectives.Vehicle supply o

33、wnersFor the largest vehicle suppliers like Ford and General Motors, remarketing is a multi-billion dollarbusiness. They must not only ensure an efficient disposal channel, but also protect residual vehiclevalues. Vehicle manufacturers, vehicle financiers, and other large vehicle suppliers manage au

34、ctionsupply and demand to protect their multi-billion dollar remarketing liabilities. In fact, this is thevehicle manufacturers key advantage. They own the vehicle supply at the top of the remarketingsupply chaincontrolling where it goes, when it can be sold, and to whom.Vehicle supply owners have t

35、he most to gain from online B2B auctions. They can save time andcut processing costs in the wholesale remarketing supply chain. Just think, a vehicle manufacturerthat remarkets 500,000 vehicles per year at a cost of $500 million can cut his costs by 50 percent,or $250 million per year, in perpetuity

36、.In addition to cost savings, there are opportunities for generating additional revenue. Vehiclemanufacturers can open their auctions to other vehicle suppliers and even to consumers, charging afee for online remarketing. Additionally, they could follow the lead of other Internet consumer sitesand c

37、harge advertising fees, and garner referral revenue from complementary service providers likeinsurance companies. Remarketing can fuel brand awareness and help drive market share and new carsales. Remarketing efforts tied to certified used-vehicle programs provide an opportunity for superiorvalue cr

38、eation. Given numerous advantages, its no wonder vehicle manufacturers are aggressivelypursuing this opportunity.Physical-auction operators Physical-auction operators are at the center of traditional remarketing. They own the channelthrough which most wholesale inventory currently flows. In the Inte

39、rnet economy, these companiesare redefining their offerings to provide online auctionsthus protecting their share of the remarket-ing supply chain.Although they are downstream, physical-auction operators have several advantages. They ownand operate the physical infrastructure and best understand the

40、 business of vehicle auctioning.Through their long-standing relationships with vehicle suppliers and several thousand dealers acrossthe country, they are well positioned to redirect the existing players through their version of onlineauctions. By aggregating both supply and demand through traditiona

41、l auctions, these players aretodays used-vehicle market makers and command a strong position in the industry. Leveragingstrong relationships with logistics, inspection, and reconditioning companies, the physical-auctionoperators are also well positioned with back-end fulfillment capabilities. These

42、advantages areHow the Internet Is Revolutionizing Americas Used-Car Industry. allowing the physical-auction operators to hit the ground running with fully functioning onlineauction solutions.Take Manheim Auctions as an example. Manheim sells vehicles online via two channels.Through the CyberLot sect

43、ion of its website, registered dealers can view and buy wholesale inven-tory online from manufacturers, leasing companies and financial institutions across the country.Dealers that want to sell online can also post vehicles for sale to consumers throughAutoT, an affiliated Manheim website. As dealer

44、s have become more comfortable withbuying on the Internet, online sales from CyberLot auctions have grownfrom just $58 millionin 1997, to a projected $1.5 billion in 2000. New online remarketing service providersAs with every other B2B industrial sector, pure play startups have emerged in the automo

45、tive remar-keting space. New players are positioned with ground-up, Internet-focused business models. Nottied to any one group of stakeholders, these startups have the ability to offer both open andclosed auctions to buyers and sellers across the full spectrum of players. However, their lack of exis

46、t-ing relationships, lack of supply, and lack of a dealer network frames their challengethey mustaggregate inventory online from suppliers in order to build the eyeball count of purchasing dealers.Their lack of physical infrastructure is a drawback as well. They need space for performing neededfulfi

47、llment services such as inspection, reconditioning, and vehicle storage if they are to deliver ontheir Internet solution promises.Among the most notable new entrants are Autodaq and AutoTradeCenter. The two companies offer online B2B e-remarketing solutions to vehicle supply owners. At both sites, s

48、upplyowners can choose to list their vehicles in “open” or private “closed” auctions and thereby can tar-get buyers and dealers important to the vehicle supply owner. To counter the inherent relationshipand infrastructure drawbacks, AutoTradeCenter has developed vehicle manufacturer relationshipswit

49、h Honda and Suzuki, and Autodaq has developed a relationship with Hyundai.E-tailing sitesWhile most of the activity in the B2B segment occurs out of the view of most consumers, the oppor-tunities being pursued in the retail market are increasingly changing used-car buying behavior.According to Gartn

50、er Group, 36 percent of all households are very likely to shop for their next usedvehicle online. While most retail used-car buyers use the Internet primarily for comparison shop-ping, 1 percent reported actually purchasing a used vehicle online, and 5 percent said they were “verylikely” to buy thei