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BRETT LEWISBlewis1228@aol.com

MISM, W, F @ 1:00PM

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HOW IS THE INTERNET AFFECTING THE AUTO BUSINESS?

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TABLE OF CONTENTS:1) Cover Page2) Title Page3) Table of Contents4) The Internet5) Internet & Commerce6) Beneficiaries7) Can Internet be Negative8) Those Negatively Affected9) Business Model10) Today’s Business Models11) Altered Business Models12) Interview13) In the Future14) Conclusion15) Bibliography

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WHAT IS THE INTERNET:

The internet is an extensive, worldwide

“network of networks” available to the public

which allows individuals to exchange and gather

information through computers and other

devices connected to the

network.

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INTERNET AND COMMERCE:

When it comes to commerce, the internet often has two types of impacts:

1.) Aggregation of buyers and suppliers2.) Facilitation of information exchange 1.

Helper, Susan; MacDuffie, John; P.5

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WHO BENEFITS FROM THE INTERNET IN THE AUTO

BUSINESS? Dealers are now able to market to larger segments than those in

local areas of dealership.

Manufacturers can utilize “build-to-order” methods which can increase their potential market. 2

Customers are now allowed more choices. Purchases can be made from dealerships, fleet managers, individuals located around the world, auctions, and other online sources.

Helper, Susan; MacDuffie, John; P.7

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CAN THE INTERNET NEGATIVLEY AFFECT THOSE IN THE AUTO

INDUSTRY?

Yes, but the negative effects depend on what role one plays in the auto business. What is good for

some is bad for others.

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WHO ARE THOSE NEGATIVELY AFFECTED?

Salesmen lose out on commissions from sales if direct “build-to-order” methods are implemented.

A large portion of salesmen can be eliminated because the internet allows individuals to directly contact fleet managers at dealerships. 3

Dealers now have more competition due to the public’s ability to contact individuals/businesses.

Auto trader ClassifiedsCycle trader EBay

Phillips, Chandler

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WHAT IS A BUSINESS MODEL?

Quite simply, the business model states how the company generates revenue. 4

Investopedia.com

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WHAT ARE THE BUSINESS MODELS OF DEALERS AND MANFACTURERS

TODAY?

Dealers today focus their efforts on generating revenue through finance payments, maintenance, and price markups over the MSRP (Manufacturer’s Suggested Retail Price). 5

Manufacturers tend to make profit because dealers must make purchases to fill lots.

McClure, Mark

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HOW MIGHT BUSINESS MODELS OF DEALERS & MANFACTURERS CHANGE

DUE TO THE IMPACT OF THE INTERNET?

Since the internet adds another level of competition for dealers, dealers now have to attract consumers with more incentives. Their business models now have to focus more on consumer behavior because many consumers will ignore price markups if presented with the right incentives. 6

Manufacturers mainly focus on decreasing production cost and increasing quality of products to increase profits.

Phillips, Chandler

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INSIDER’S PERSPECTIVE: Saturn Automotive Salesman states…

Internet research helps consumers pick specific products before they visit dealerships.

Internet competition is not a threat for new car sales.

The internet increases level of competition for used car sales.

That car maintenance is a big source of revenue. (business model )

Jason Lucas, Sales Consultant, Saturn of Marietta (Interview) Phone # (770) 421-1400

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WHAT THE FUTURE HOLDS:

Even though technology is advancing, dealers will be here to stay.

Vehicles may all be built to order online.

Salesmen might become extinct or all communication with customers will be conducted via web. 7

Vaughan, Mark

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Conclusion:

The internet is a useful tool that impacts those in the auto business both positively and negatively.

The internet forces dealers and manufacturers in the auto business to re-evaluate and change their business models in order to remain competitive and make profit.

Mostly, the internet allows everyone to be more informed and to communicate more effectively.

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Bibliography:Helper, Susan and John MacDuffie. E-volving the Auto Industry: E-commerce

Effects Consumers and Supplier Relationships. Sept. 12, 2000.

Investopedia.com. Business Model

Lucas Jason, Sales Consultant, Saturn of Marietta (Interview)Phone # (770) 421-1400

McClure, Ben. Getting to Know Business Models. March 31, 2004.Investopedia.com

Phillips, Chandler. Confessions of a Car Salesman. Edmunds.com

Stewart, Virginia. Business Journals: Online Sales Altering the Future of Car Salesman. Sept 2000.