By on March 6, 2013

Google’s autonomous car program tends to get the lion’s share of attention when discussing the tech giant’s auto initiatives. But lurking in the background is a more immediate project that has the potential to finally “disrupt” (as Silicon Valley types are so fond of saying) online automotive sales.

The last party to attempt such a feat was TrueCar, an innovative and well-intentioned company that ultimately ran afoul of dealers, regulators and the OEMs. TrueCar was forced to pull itself back from the brink and re-invent itself as a more dealer-friendly company, a process painstakingly documented by Ed and Bertel before I ever appeared on the masthead.

What TrueCar did was distort the information asymmetry that car dealers rely on to make money. TrueCar was able to provide data on everything from dealer invoice to transaction prices and allowed dealers to compete with one another for a sale – a major taboo in the world of car sales.

Now, Google is rolling out a service, the imaginatively named Google Cars, beyond its initial Bay Area test market. Consumers will be able to log onto Google Cars and use the handy one-stop filter box (rather than clicking through various menus and sub-menus to boost a given site’s pageview count) and get inventory, pricing and retailer information for the exact car they’re looking for, down to the color. With 66 percent of dealer website visits arriving from Google, it only makes sense for the tech giant to try and capture some of that value. Under the Google program, users can shop for their cars via the first page of any given Google search. Google will get a minimum of $10 per lead, which is determined by a bidding system. One California Toyota dealer told Automotive News that he was paying $22 per car and $26 per truck or crossover, slightly more than the $20 paid to competing services.

Reviews have been mixed, according to AN. Some dealers like the flexibility of bidding for leads, while others expressed frustration that potential customers can contact dealers anonymously (via disposable phone numbers or email accounts, which expire after a set number of unanswered calls or emails), which they say diminishes the effectiveness of the leads.

Regardless of the potential issues, Google Cars cannot be ignored. Google’s massive size and resources will allow it to be far more aggressive than TrueCar ever was when interacting with dealers and OEMs. Regulators may be a thorn in Google’s side (never underestimate the lobbying power of NADA and other dealer bodies), but again, it has the resources to put up a proper fight against the usually dominant entities.

On a smaller scale, Google Cars is likely to cause a lot of headaches for the established players in the online auto retail spaces. Current juggernauts like Edmunds, Kelley Blue Book, Cars.com and even TrueCar are all threatened by Google Cars, thanks to the strength of the Google brand and most of all, the superior user experience. Once consumers know that they can access a high-quality car shopping tool without ever leaving Google and have the benefit of Craigslist-style anonymity it will be a tough sell for the other sites to get their customers back. About the only criticism levied at Google Cars in this area is the lack of content, like car reviews and automotive news. But Google has never been a content company and they are wise in avoiding this space. Better to aggregate the near-infinite amount of automotive content (aggregation is one of Google’s strengths, after all) that will likely be consumed by dedicated auto enthusiasts rather than consumers. A successful Google Cars could also cause indigestion further down the on-line food chain, at sites that live mostly off selling leads, and who dress-up the lead generation with content, which all too often is not their own.

Aside from the millions it should generate for Google, the car shopping tool is yet another way for them to collect data on consumer purchases. In this case, Google will amass significant personal information relating to what is likely the second largest purchase of one’s life, data that goes beyond whether you like a tan interior or a manual transmission. Google already can sense purchase intent from your browsing data, actively perusing a shopping service would confirm this intent. Yes, it’s ironic considering that Google subscribes to the idea that “information wants to be free“, but there’s a reason behind the internet adage “if you’re not paying for it, you are the product”.

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18 Comments on “Analysis: Google Cars Gets Ready To Retail Rumble...”


  • avatar
    kvndoom

    Doesn’t sound like it’s going to have the same detailed information that truecar v1.0 had. Shame.

    • 0 avatar
      CoastieLenn

      I agree that its a shame, but on the other hand- Google is a search engine first and foremost. Why have redundancy in the services it offers? There will probably be some form of links provided to any given vehicle researched that brings the user/inquirer to another Google page to view.

  • avatar
    Gardiner Westbound

    This is huge! Google has the economic muscle, smarts and dogged determination to fight off the self-serving OEMs, dealers and regulators. It is likely to prevail.

  • avatar
    Dr. Kenneth Noisewater

    When Google normalizes all the various OEM’s technical data (such as headroom, legroom, cargo space, etc) and lets people search on those, they’ll win. Extra win for normalizing all features and options packages.

    “Please list all vehicles with >40″ of front and rear seat legroom”

  • avatar
    car_guy2010

    Maybe one day, we’ll finally see the demise of the ignorant car salesman and his annoying bag of sales tricks.

    Probably not completely but there’s nothing wrong with giving the consumer more power to make an informed purchase.

  • avatar
    Steven Lang

    “Google will get a minimum of $10 per lead”

    This will be pie in the sky high price if they are talking about creating leads in the lower end of the used car market.

    As a longtime dealer, it would make a lot more sense for Google to charge a certain fixed percentage based on the online asking price.

    A few simple modeling constraints would keep the whole pricing structure reasonable, and it would give dealers and owners the incentive needed to keep the asking prices competitive.

    One other thing. If Google ever saw fit to combine forces with Autocheck or Carfax and offer free history reports, THAT would be the killer app. The overwhelming majority of phone deals that are successful for me, are those where I send the buyer a Carfax via email before the call is completed.

    If you eliminate uncertainty, and provide full disclosure, you earn the trust of your customers. Google should pursue this project with those goals in mind.

  • avatar
    corntrollio

    “and have the benefit of Craigslist-style anonymity”

    That is not true. Google has violated user privacy on numerous occasions, and Google Cars will be no different from any other Google service in this regard. They are tracking you and they can follow you anywhere.

    • 0 avatar
      tkewley

      You might want to check the fit of your tinfoil hat.

      • 0 avatar
        JMII

        Gotta agree with corntrollio here. Remember Google is advertising company first and foremost. They are after your information. Once you tell Google you want to buy a car be prepared to have every Google search you perform recommend some kind of vehicle. “This search sponsored by the new Ford Fusion, click here for Google’s Cars special low price”. Google will be selling the search information (maybe not your personal information) to the OEMs and dealers. Their entire business model is based on knowing: what you like, what you buy, and where you go. Read here: http://www.theatlanticwire.com/technology/2012/01/whether-you-it-or-not-google-will-track-your-email/47816/
        Google even shows you (their ad partner) how to do it:
        http://cutroni.com/blog/2008/11/04/email-tracking-with-google-analytics/

  • avatar
    Dimwit

    What should be interesting is if it will put pressure on worldwide pricing. Being able to seamlessly cross shop US and local pricing with good data will be painful from mfg, dealers and gov’t standpoints.

    Moar info!

  • avatar
    mbaruth

    For new car customers online, Google is nothing more than a directory service. It’s true that a high percentage of dealer site traffic comes directly from Google-but that’s only AFTER a customer has gone to a third-party site and researched the vehicle and found the dealer that has the car they want. They THEN go to Google and type in the name of the dealer.

    More and more dealers are investing in digital audience analyses and finding out that Google is just one stop on the consumer’s path to purchase.

  • avatar
    Dave M.

    As someone currently in the market, this makes sense. As savvy as I like to think I am, it’s still the Wild West out there in shopper land. The dealer has every advantage except to pull the purchase trigger.

    While my purchase is a well planned, extreme researched 6 month project of love (I keep my cars 12–4 years), the problem with the TrueCar model is their contacts want you to buy RIGHT NOW. Guess that’s the nature of the beast.

    I’m a huge CR fan; as in the past I paid for their fee for the car buying reports for my two ‘finalists’. I was very disappointed this round because I receive no further information than I researched on my own. Plus the dealer contacts were highly aggressive despite me repeatedly saying “I just want an out the door price; I’m not buying until June”.

    I don’t want the dealer to lose money; conversely I want them there in case I need warranty work in the future….

  • avatar
    sportsuburbangt

    This would be an interesting tool, I could have used in my last purchase.
    I just bought a new (2012 leftover) Ford Expedition in October. I used Cars dot com and did a national search. I found the exact Expy I was looking for in Texas, I live in NY. They were advertising a price that was $11k off the sticker. I negotiated shipping to NY for $1k and had a new truck at a great price.
    I started out looking for a used 2011-12. I found the new 2012 for a couple thousand more, after I expanded my search nationally and added $5k to my price limits.
    The deal was so clean, I sent them an email, and then we had a couple of calls. When we had the particulars on shipping sorted out I gave a 2k deposit on my credit card, and they overnighted me the paperwork. I gave it to my credit union for the loan and then overnighted the dealer the loan check and completed paperwork. I had the new truck in 5 days. They even worked the tax and DMV fees into the total purchase price and gave me a check to give DMV for the NYS taxes and fees.
    I sold my old Expedition on Ebay. I used Edmunds and Ebay to determine the right price for the old truck, and it sold in 6 days.
    The whole process took 3 weeks. The combination of a 1.9% loan for 6 years, and 11k off the sticker price made everything doable.
    I could not have done this without Cars dot com, Edmunds and Ebay. The tools are there, if Google bundles them in one place it will be very helpful.
    BTW we are very happy with the new Expedition, I am amazed at the improvements from 06 to 12.

  • avatar
    baggins

    I just spent about 20 minutes there. Pretty handy, although all the options / packages searches didnt totally work.

    But you can use the price filter to narrow the field within the trim line. So if you want a Sienna LE with Nav, its pretty quick to get a list of what’s avail

    For HOnda Oddy it was even easier. No options, just trim lines.

    I’ll use next time I buy

  • avatar
    nrd515

    Sounds great, if they can pull it off, it will put a world of hurt to some sites for sure, and some dealers too. Best/easiest experience I had was when I bought my 2003 Ram online. Lots of emails back and forth, bottom line prices were given freely and they were unbeatable, and a phone call sealed the deal. Sadly, the internet guy they had then quit, and his replacement isn’t really worth a damn. I tried to get a price on a car recently and the usual old tired games came out and I bailed.


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