Business Selling cars online The TrueCar challenge
商业 网上卖车 TrueCar来势汹汹
A price-comparison website causes ructions in the motor trade
AMERICANS looking for a new car nowadays often use online price-comparison sites such as AutoTrader, Edmunds and eBay to find the best deal.
Most such sites charge dealers a small fee for passing on sales leads from shoppers who have submitted their details.
TrueCar, a relative newcomer, does things differently.
It charges dealers $300, but only when its introduction of a customer results in a sale, and it makes its dealers guarantee to honour their quotes, no excuses.
TrueCar taps into data from state vehicle-registration offices, car-loan providers and other sources to compile what it says are the most accurate figures available for what motorists pay for the same car locally. This can be several hundred dollars less than the sticker price, and is often below "invoice"—the price that, according to the paperwork sent by the carmaker, represents the wholesale price the dealer paid.
In fact dealers receive various rebates from carmakers, and make money from such things as loans and service contracts, so a modest profit is still possible.
But such heavy discounting alarms carmakers.
Honda's American arm recently told dealers it would cut off their marketing allowances—which can be worth hundreds of dollars for each car sold—if they did not stop offering sub-invoice prices on TrueCar and other sites.
Honda insists dealers can sell at whatever price they wish, but it will not pay them to market its products as "cheap" or "low-end" cars.
It also suggests that some dealers use such sites to "bait-and-switch", offering tantalisingly cheap cars they do not have, to reel in suckers, a practice many states ban.
TrueCar insists that the contracts it makes dealers sign commit them to deliver the cars they promise at the price quoted.
David Wilson, who recently told the 16 dealerships he owns in California to stop using TrueCar, says he has reason to share Honda's scepticism: he plays back to The Economist a voicemail from a rival dealer who had quoted him an attractive price via TrueCar on a new Lexus, calling to say that they did not have it in stock but could try to find one for him.
TrueCar says there had been no hiding of the fact that the model concerned might no longer be available, and thus no question of "bait-and-switch"; that this was a one-off case and that TrueCar has had few complaints so far.
But it is awkward that a critic had so little trouble catching a dealer quoting for a car it did not have.
Another big chain of dealers, Group 1, has also told its members not to use TrueCar, saying it had privacy worries over the website's requirement that it have access to showrooms' computer systems so as to verify sales.
Scott Painter, TrueCar's founder, says that so far such publicity has only drawn dealers' attention to the attractions of using the website.
All the site is doing, Mr Painter argues, is making more open what is already going on. He says his data show that 23% of all the Hondas sold via TrueCar are below invoice price, only a little above the 22% sold below invoice for all Hondas in America.
Mr Painter says his website is proving so successful at shifting metal that Honda, and the doubting dealers, will eventually relent: "The power of the market will change their mind."
However, several states' regulators are looking into whether the website breaches their laws.
Some states specifically ban "bird-dogging"-taking commission for introducing a sale.
Some also ban using the word "invoice" in car ads, regarding it as potentially misleading.
Colorado's regulator has warned dealers there that they will be held responsible for any rule-breaking in their TrueCar quotes.
TrueCar says it will shortly make changes to its website to satisfy the regulators' concerns.
In September TrueCar raised $245m for expansion. On January 1st it began an exclusive tie-up with Yahoo! to provide car-buying services.
It also provides such services for consumer groups such as the American Automobile Association and the United Services Automobile Association.
It could look forward to a large slice of the $6 billion a year American car dealers spend on advertising-if it can convince both regulators and dealers that it is operating within the law.