Cap Gemini Ernst & Young has released a new survey that examines the role of the Internet in the automotive industry. "Cars Online 2002" uncovers some misperceptions that car dealers and OEMs have regarding consumers' wants and needs, how the Internet is causing an increasingly competitive car market and what the future looks like for the Internet in the

automotive industry.

The survey covers eight markets spanning

across the globe: United States, United Kingdom, Germany, France, Italy, Sweden, Benelux (Belgium/Netherlands/Luxembourg) and Japan - a total of 2,500 customers. Also interviewed were 10 OEMs and 100 dealers from each country, according to Kurt Rossler, spokesman for CGE&Y.

Among the U.S.-specific key findings of the report:

* U.S. dealers are very positive about the Web. 78 percent regard it as an opportunity for their business and only 5 percent consider it a threat.

* Internet dealers were responsible for 1 percent of car sales in the United States, the highest of any country studied. According to the report, this is not surprising given that the online channel is more advanced than in the other countries, with e-tailers such as Autobytel.com having been in operation for several years.

* U.S. dealers were among those least concerned about the potential overall impact on their business from new sales channels. This may reflect the strong position of franchised dealers in the United States. As the Internet has apparently not significantly eroded their hold on the market, they may feel confident in their ability to overcome other alternative channels.

* Close to 45 percent of U.S. consumers said they have ordered a vehicle to their own specific design (build-to-order), second only to consumers in Germany among the countries studied.

* Nearly three-quarters of U.S. consumers purchased their last vehicle from a franchised dealer and 14 percent bought from a used-car dealer.

* The ability to shop without sales pressure is particularly important to U.S. consumers (81 percent named this factor).

Overall key findings of the report included:

* The gulf between perception and reality is one of the key findings of "Cars Online 2002."

* Perception: Dealers continue to overestimate the importance of factors such as "familiarity with the dealer" and "one-stop shopping" (that is, offering finance, insurance and accessories as part of the sales process). Reality: Consumers, in fact, place less importance on these features, and instead look for the ability to save money, convenience and no sales

pressure.

* Perception: An overwhelming majority of dealers and OEMs (nine out of 10) believe the Internet has created a new breed of better educated consumers, resulting in a more competitive marketplace. Reality: While it's true that consumers today tend to be better informed and educated, in fact only a small percentage of consumers (less than 20 percent)

claimed that the Internet was a source of research for their vehicle purchase, and only 3 percent said it was their primary research tool.

* There is also a mismatch between the Web site features that consumers consider attractive and those that dealers offer.

* All OEMs surveyed had a vehicle configurator on their site, while only half offered the ability to schedule test drives or services, or

offered full cost breakdowns - features considered more important in the eyes of consumers.

* Only a handful of OEMs and dealers offer online parts locators - a feature demanded by two-thirds of consumers.

* The automotive market has become increasingly competitive, with 42 percent of dealers saying that margins on new car sales have decreased (compared with 31 percent the prior year).

* The manufacturer-franchised dealer remains the primary source of information for consumers researching both new and used vehicle purchases

in all countries.