Sonoma County auto dealers remain buoyant amid surge in online competitors
Most car buyers find Scott Silveira’s auto dealership in Healdsburg via the Internet, and these days more shoppers are making their first contact via smartphones.
Used car buyers especially use the “live chat” feature on the Silveira Buick GMC website at all hours of the day to ask about prospective vehicles. Such shoppers are querying other dealers around Northern California, Silveira said, and “the one who responds first is generally the one they go see.”
“It’s even more immediate than it was five years ago,” he said.
The car buying experience continues to change in Sonoma County as technology advances and new competitors enter the marketplace. The competition includes new Bay Area tech startups like Roadster, Shift and Beepi that offer an online alternative to buying new or used vehicles. As well, CarMax, the nation’s largest used-car retailer, has won approval to build a dealership on Santa Rosa’s Corby Avenue.
Amid such changes, existing dealers continue to adapt with online services that allow them to reach potential buyers from both inside and outside the county. Websites are designed so smartphone users can easily find the cars that interest them, and staff are assigned to quickly respond to any questions.
At the Hansel Auto Group, which has 11 franchises in the county, four customer care centers have been set up in the past few years with staff trained in customer services, not sales. While live chat has been a popular method for contacting the staff, a growing number of customers now select the feature that allows them to speak directly to a representative.
“We’re actually seeing an increase in actual phone calls,” said Justin Hansel, the group’s vice president and general manager. But today’s calls generally come after the customer has “spent some time on their mobile device” looking at the available cars.
Americans are expected to purchase 16.9 million new cars this year, according to IHS Automotive. That would amount to a 2 percent increase over 2014, but a 46 percent jump over the 11.6 million vehicles sold five years ago.
The local dealers agree that car sales have improved considerably over the last five years.
“I feel things are definitely on the upswing,” said Trevor Sanderson, general manager at Sanderson Ford in Healdsburg.
At Platinum Chevrolet in Santa Rosa, revenues from sales and service have grown 25 percent in the past two years, said president and owner Todd Barnes. He purchased the dealership in 2009 right before General Motors entered bankruptcy, and the early years included “some tough times.”
Today dealers report a significant increase in the number of companies buying new trucks, vans and other vehicles. To those who cater to such businesses, those sales point to better times for the larger economy.
“It’s a good overall indicator of what’s going on in Sonoma County,” said Barnes.
Along with increasing sales, the years since the Great Recession have witnessed changes in the way buyers shop for cars.
Eight years ago the typical customer visited four showrooms before making a purchase, said Jim Bone, the dealer and a partner in the Jim Bone Auto Group in Santa Rosa. Today’s buyers visit on average 1.6 showrooms. The change partly reflects how much more information now resides on both the dealer and automaker websites.
“I can’t remember the last time a customer said, ‘We’ve just come in for a brochure,’” said Bone, whose business includes Nissan, Kia and Fiat franchises.
Buyers have long turned for outside help in new car purchases. Assistance is available from auto buying programs, such as those at AAA and Costco, as well as from online buying services like TrueCar and Autotrader.
Online car buying
Data is murky on the number of Internet-related sales. But a third of U.S. auto buyers say they are willing to buy a car online, according to Capgemini’s annual Cars Online survey.
To that end, tech startups continue to introduce new businesses for those who want to go online to buy and sell cars. Since most of the startups are located in and near Silicon Valley, it’s not surprising that they seek to attract their first car buyers in Northern California.
The online companies say they can make car buying and selling easier and do it for less than a buyer would pay at a dealer. They stress no haggling over price. And for used cars, the say they offer extensive vehicle inspections, no hassles over title transfers and “no-questions asked” return policies.
For both new and used cars, the companies typically offer to deliver the vehicle and all the needed paperwork directly to the buyers’ homes.
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