The days when buying a new (or used) vehicle meant devoting entire Sunday afternoons to visiting dealerships, eating free hot dogs and kicking tires could be gone forever.
In a global survey of more than 8,000 prospective car buyers, 94% of the respondents said they use the Internet as a research tool.
At the same time, chatter about vehicles and dealerships on social media sites is carrying more weight in the car-buying process, according to the survey by the Paris-based consulting firm Capgemini.
Some 71% of the respondents said they likely would purchase a vehicle from a particular automaker or dealer if they found positive comments posted on social media sites.
Conversely, 51% said they would be less likely to purchase a vehicle if they found negative comments posted on social media sites.
"We've been surprised at how fast social media has really become an integral part of the process for research," says Nick Gill, Capgemini's Global Automotive Sector leader, who likens user-generated content about vehicles and dealerships to "online word of mouth."
As consumers increasingly rely on the Internet to make decisions about their vehicle purchases, they're spending less and less time eating free hot dogs and kicking tires at automotive dealerships.
And the buying cycle continues to shrink.
"When people come into the dealerships, they're serious about buying," Gill tells IndustryWeek. "They're not just coming for a fun ride."
Indeed, 43% of the respondents to the Capgemini survey said they won't visit a showroom until a month prior to purchase, up from 39% in the previous year's survey.
"That keeps increasing," Gill says. "The critical tipping point, we've found, is two weeks for most buyers. Most buyers will narrow their search down to one or two vehicles within two weeks of purchase. They've basically decided what they want, and then they go and test-drive one or two vehicles."
Death of the Dealership as We Know it?
To provide some perspective on how rapidly the Internet has become a dominant force in the car-buying process, only 20% of Capgemini survey respondents said they used the Internet as a vehicle-research tool in 2002. That's approaching 100% today.
The Capgemini survey also points to a growing interest in buying vehicles, parts and accessories on the Internet.
Some 42% of the respondents said they were likely to purchase a vehicle online, up from 37% two years ago.
Consumers in developing markets expressed the most enthusiasm for the idea: Brazil led the way with 67% of respondents likely to purchase a vehicle online, followed by China with 57%.
"Price discount, along with ease and speed of transaction, are cited by consumers as the main reason to purchase a vehicle over the Internet," Capgemini says in the survey report, "Cars Online 11/12."
Not surprisingly, younger consumers are the most enthusiastic about buying online, with 43% of survey respondents in the 18-to-34-year-old age group indicating that they were likely to purchase a vehicle online, compared with 36% of those 50 or older.
The survey also revealed a growing interest in alternative buying models such as mobility packages as well as vehicle-sharing and ride-share programs -- particularly in developing markets.
Nearly half of the respondents said they would consider a mobility package as an alternative to purchasing or leasing a vehicle, while nearly 40% said they would consider a vehicle-sharing or ride-sharing program.
If consumer interest in alternative approaches to buying and ownership continues to grow, the auto industry will have to adapt its business model, Gill says.
"It's a big change for them. They'd rather just sell the vehicle to the dealer," he says. "But if the consumers keep pushing and there's enough demand, they'll have to change."
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