Mike Jackson, AutoNation’s CEO (AutoNation is America’s biggest new vehicle retailer) just told the Wall Street Journal that they are embarking on a $100M plan to sell vehicles online, similar to other e-commerce goods.
Will a one-stop AutoNation site be good for consumers? For those seeking convenience as priority one, “maybe,” or “yes.” For people who want a great price, “no.”
If AutoNation can price, take deposits, and secure deals on-line, they will essentially force a fixed price model on their customers (Have you ever negotiated the price of an Amazon item?). Consumers that seek lower prices will look elsewhere, and the remaining buyers will buy at a higher price. Unlike retailers like Amazon, whose cost structure (no physical stores) is much lower than “brick and mortar” competitors and can thus allow them to offer lower prices than competitors, AutoNation has the same brick and mortar as their competitors.
But instead of reducing the price for consumers who demand this, AutoNation will probably take their cues from airlines, and adjust prices dynamically to eek out every possible consumer dollar, adjusting prices market by market in microseconds. How would you like the price on the car you’re looking at to go up and down from day to day and hour to hour?
The new car business is traditionally one where a savvy buyer can get a great deal if they want. This will not be true at AutoNation.
So the bottom line is a boost for AutoNation’s bottom line – but not yours.
If you would like to read the full article please visit:http://online.wsj.com/articles/autonation-profit-higher-on-strong-spring-selling-season-1405599280?