While more leads than ever are being generated by online automotive buying services, leads from independent services are

proving harder to close than those from their manufacturer and hybrid

counterparts, according to the J.D. Power and Associates 2002 Dealer

Satisfaction With Online Buying Services Study released July 24.

The study shows that online buying services (OBSs) are responsible for

generating 3 percent of new-vehicle sales by dealers. Manufacturer OBSs

generate the same number of sales for subscribing dealers as independents

do, but from fewer leads.

"With industry sales surpassing 16 million new units annually, a medium

generating approximately 500,000 vehicle sales per year is not to be taken

lightly," said Scott Weitzman, senior director of automotive Internet

research at J.D. Power and Associates. "Dealer satisfaction is directly

correlated to closing ratios, and while the average number of sales

prospects provided to dealerships by their OBSs may be higher than in

previous years, the quality of these leads and the dealer's ability to close

those sales is the key."

According to the survey, with high marks from dealers for its ability to generate business, Lexus.com

ranks highest in overall satisfaction in the study. Independent online

buying services are the top performers in overall lead generation per

dealer. Autobytel provides the greatest number of new-vehicle leads per

dealer, while Cars.com provides the most used-vehicle leads. AutoTrader.com

is still used by more dealers than any other OBS and retains the largest

share of the online used-vehicle market.

The 2002 study shows the historical gap is closing between the ability of

independent and manufacturer-sponsored sites to create sales for their

client dealers. Independent services are finding increasingly keen

competition from manufacturer-sponsored OBSs. Services such as Lexus.com, GM

BuyPower and VW.com continue to provide an increasing number of quality

leads and are generating more sales for their dealers. Hybrid services,

which provide leads from both Internet and non-Internet sources, have also

experienced improved closing ratios at the dealer level. Costco and Sam's

Club offer such auto buying services to members.

"Manufacturer-sponsored online buying services hold six of the top 10

positions in the study's satisfaction index in a year where overall industry

satisfaction rose 28 points compared to 2001," said Weitzman. "With industry

closing ratios of 15 percent for new-vehicle sales and 21 percent for

used-vehicle sales, these manufacturer OBSs are an increasingly important

tool for dealers."

The study said dealerships are also having more success with their own Web sites in 2002.

Ninety-three percent of dealerships report having their own Web sites that

generate quality leads with strong closing ratios of 20 percent for new

vehicles and 22 percent for used vehicles. Still, nearly two-thirds (65

percent) of all dealers continue to subscribe to online buying services,

representing a small increase over 2001.

The 2002 Dealer Satisfaction with Online Buying Services Study is based on

more than 4,000 interviews with dealers throughout the United States.

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a

global marketing information services firm operating in key business sectors

including market research, forecasting, consulting, training and customer

satisfaction. The firm's quality and satisfaction measurements are based on

responses from millions of consumers annually.