While many consumers simply look for useful information on these websites, an
increasing number of buyers have begun to use the Internet as a way to purchase
cars.
Song Jian, an executive with a Shanghai-based State-owned company, bought a
Honda Odyssey van for his company in December from a Chinese auto trading
website. He says he was too busy to go to a dealership, so the Internet became
his primary source of information.
After doing his homework and comparing prices on the Honda Odyssey, the
35-year old decided to order directly from the website.
"There was not much difference between new cars of
similar models in quality and price, so it saved me from having to rush between
different dealerships," he says.
John Zhang, president and chief executive officer of Chinese automobile
portal Chinacars.com, says his company has over 200,000 registered users and
more than 10,000 car dealers as partners.
Group purchases have been particularly lucrative for Zhang. Last May, one
Hyundai Elantra dealer asked Chinacars.com to organize a group purchase. The
dealer offered a 2,000-yuan (US$240) discount on the 110,000-yuan (US$13,600)
car. Within a week, 300 buyers in Beijing had joined the programme.
Online auctioneer eBay's Chinese website also sold 400 new cars to consumers
in Shanghai in partnership with the second largest dealer in the city over a
two-week period last June.
Despite the increasing influence of automobile websites, it is still not easy
for online entrepreneurs to satisfy diverse consumer needs.
"Automobile-related online advertising has maintained very high growth, but
that might not continue over the next few years," says iResearch President Henry
Yang.
"The long-term development of auto websites should eventually shift to
professional and differentiated services."
Zhang agrees, and says Chinacars will focus on individualized services in the
future.
Car accessories have also become popular online.
"Cars are still luxurious commodities for ordinary consumers, and car
ownership is also seen by many Chinese as a sign of modernization. That's why
mainland consumers tend to spend more money on accessories," says Yang with
iResearch.
Li Wei, an online trader at Taobao.com, which directly competes against eBay
China, started selling automobile accessories three years ago on his own. He now
employs five assistants and has an annual sales volume of 1 million yuan
(US$120,000).
The Taobao site lists more than 20,000 automobile accessories.
China's cities are changing and developing quickly, with new roads built
every month and new buildings every day in cities such as Shanghai, Beijing, and
Suzhou.
Domestic consumers also have more disposable income than
ever before, and are eager to spend their money on leisure activities.
Chinacar's Zhang says this is why his company is focusing on global positioning
systems (GPS). It offers GPS services to truck companies and police stations in
Guangzhou, and is eager to provide individual consumers with new features, such
as sending map data through short messaging services.
(For more biz stories, please visit Industry Updates)