Latest Venture

I haven’t been involved in the car industry since 2007, when Evenlevel shut down. I’m not getting back in the car industry today, but you can check out my latest venture, a furniture search engine at FurnitureNear.Me.

Seeking a Blogger

I haven’t posted in awhile, primarily because I’m no longer in the auto industry. After Evenlevel met an unfortunate end, I left and joined another startup. However, my blog continues to generate traffic and comments. If someone is interested in taking it over and blogging, contact me through comments.

Thanks,

EJ

Free Cars & Cars As Service

I am a week late on this one, but found it to be pretty interesting. The Long Tail blog has a brief post about a new venture that will sell electric cars for free and instead charge for the electricity.

The new company would use existing battery technology and increase the number of charging stations to extend the range of the useful range of the car.

Lanelogic Update – Consumer Portal

As a reader pointed out, I misread a Lanelogic press release from the other day, so, instead, here is a link to their consumer portal. I know I’m a few months late on this, but…

Cool New Classified

vLane.com is a great new auto classified/vertical search engine. Currently vLane makes it easier for a consumer to find a car by integrating better search functionality, news and articles (with voting), and user reviews of a car into one site.

vFinder offers users a variety of ways to filter out cars and drill down to the right type of car. For example, some car shoppers I’ve worked with wanted a Japanese manufactured sedan with 6 cylinders, very easy to do. The search capability isn’t 100% perfect yet, but I have no doubt things will get better quickly. Also not sure about the business model, could be an adsense site (like it is now) or perhaps a traditional classified site later.

I’m a big fan right now, especially since they agree with me that car search needs to be improved.

Autotrader Price Increase and Generated Leads

According to a study by Autotrader, Autotrader generates $99 billion in annual sales, or nearly 30% of total car sales in the US. More than 40,000 dealers have signed up with Autotrader and a number of private sellers list cars for sale on Autotrader as well. Autotrader is a huge company for car sales, but clearly tensions exist between dealers and autotrader. The recent price hikes have irked dealers, but the amount of leads from Autotrader also lags other providers on a cost per lead basis.

Jake at HigherTurnover.com has done an experiment to see which classified drives the most leads and Craigslist is out performing Autotrader 3 to 1 while Cars.com has driven twice as many leads. Not a statistically valid sample size, but still interesting.

Autotrader started back in ’97 before the pay per action model became established and went with a traditional subscription model. This has had a few significant consequences for autotrader, consumers, and dealers. Primarily because businesses manage to what they measure, in this case, subscription revenues.

Autotrader monetizes dealer subscriptions not leads. This means Autotrader would place more emphasis on direct sales and dealer recruitment than lead generation. Not bad, per se, as consumers go to Autotrader for cars, and dealers have cars, but Autotrader has less incentive to experiment with driving leads. For example, a company called LiquidMotors actually handles the initial contact with customers. If Autotrader charged per lead, they could pre-screen leads for dealers and charge more.

I think Autotrader’s search results are also affected by the subscription model. Premium listings are posted first, despite not being the most relevant to a consumers search. Making money off leads would give Autotrader the incentive to improve search functionality, helping consumers find the right car quickly would drive leads, but reduce page views, visit times and perceived value.

Harvard Business Review published an article this month on mapping competitive position in a market. It recommended identifying what features customers pay for and then running a regression on features and price to identify what market opportunities are open. This is also a great way to see what people value. The auto classified space is interesting because the dominant players all offer the same basic value but at wildly different prices.

Craigslist – more leads than Autotrader and free

Oodle, Vast & Edgeio – millions of visitors and free

Cars.com – from what other dealers have said they generate the same amount of leads at autotrader for a portion of the price

Autotrader.com – biggest name, most dealers

Without doing the actual regression, dealers are not paying Autotrader for leads but instead for brand, great for Autotrader, less good for dealers.

Recent M&A Activity in the Car Industry

The Web 2.0 “bubble” has been driven by M&A activity, here are some of the recent acquisitions in the Auto Industry (not manufacturers & not in any order).

I’m sure there are more, all that came to mind. We need more acquisitions in the auto industry to spur more startups.