Car Dealer Group Plans to Link Its Members With E-Commerce Site


DETROIT -- The National Automobile Dealers Association has decided it's better to click than fight.

After several years of fighting the online car-selling strategies of manufacturers and independent Internet players, the NADA next month plans to launch its own car-shopping Web site, which will offer consumers access to invoice prices of new vehicles, an online inventory of new and used vehicles and links to used car trade-in values and dealer Web sites. Eventually, the NADA hopes all 19,500 of its dealer-members, or about 90% of the nation's new-vehicle dealers, will be accessible through the portal,

The NADA's move to show invoice pricing on its site is a major break with the group's past opposition to disclosure of what amounts to the dealers' costs for cars and trucks. That decision, as much as the move to create a consumer car-shopping portal, demonstrates the often change-averse dealer group's recognition that the Internet is now as mainstream a tool for auto buyers as the Yellow Pages or the phone.

"Everybody says, why are dealers against the Internet," NADA President Frank McCarthy said. "We're embracing it. We are going full bore and embracing the Internet."

As part of that embrace, the NADA has agreed with Cobalt Group, Seattle, to make it easier for dealers that don't currently have proper Web sites to get upgraded technology in packages developed by Cobalt. Cobalt Group will provide the NADA site with a database of more than 500,000 vehicles in stock at dealers that use Cobalt's Internet systems.

Ultimately, NADA officials say they hope to connect all 19,500 NADA member dealers to the new site,, and eventually allow a consumer to search inventories at all those stores.

The NADA site will provide shoppers with the names of three dealers in their area that carry brands they want to buy, and will make those referrals at no charge -- thus undercutting referral sites that assess fees from either consumers or dealers for acting as virtual middlemen.

"If the consumer believes there's a cost of working with an intermediary ... why not just deal with the guy who can give me the car anywhere?" said Cobalt President and Chief Executive Officer John W.P. Holt.

The transformation of NADA leaders from Web skeptics to would-be megaportal sponsors got a big boost at the group's convention in Orlando, Fla., in February, Mr. McCarthy said. The convention's sprawling exhibit space was dominated by glitzy stands representing various Internet car-selling ventures that all posed a threat to traditional dealers and their business practices.

"You walk around that floor and see 26 dot-com companies all trying to get into the business," Mr. McCarthy said.

After that event, he said, the NADA leadership wrote to every NADA dealer, outlining the plan to post invoice pricing on a NADA Web site and make the NADA competitive with the independent online retailers.