The US online used car market is on the brink of explosive growth, breaching $164 billion in 2004, but brick-and-mortar car dealers could put a roadblock in the path.
“Online used car firms will need to provide an integrated system and a full range of vehicle-related services, including financing, insurance, and trade-in services,” said Jonathan Gaw, research manager for IDC’s eAuto program. “Because traditional car dealers make their largest profits from finance and insurance services, they may withhold inventory if online auto dealers threaten this part of their business.”
If the online used car market can steer around this obstacle, IDC believes its revenues will accelerate from less than $10 billion in 1999 to over $164 billion in 2004. The online share will jump from 3% in 1999 to almost 40% in 2004.
“Used cars tend to be high-consideration products for consumers, and the Internet helps to bring clarity to the process and transparency to the market,” concluded Gaw.