Google’s Self-Driving Car Program Could Transform Online Auto Sales
Google’s self-driving car program tends to stay under the radar, emerging mostly when examining the tech giant’s automotive activities. However, what remains less visible is a more immediate development that could ultimately “disrupt” (as Silicon Valley is fond of saying) the online car sales landscape.
The last company to attempt a similar feat was TrueCar, a forward-thinking company that eventually clashed with dealerships, regulators, and OEMs (Original Equipment Manufacturers). As a result, TrueCar had to step back, rebrand, and shift its focus to being more dealer-friendly.
What TrueCar did was eliminate the information asymmetry that car dealerships traditionally relied upon to make a profit. TrueCar gave consumers access to details such as dealer invoices and transaction prices, empowering customers to negotiate with dealers, something previously unheard of in the car sales industry.
Now, Google is launching a program called Google Cars, expanding beyond its initial Bay Area test market. With Google Cars, customers can sign in and use a streamlined platform—essentially a one-stop shop—to view car listings, pricing, and dealer information all in one place. This new service simplifies the process, allowing consumers to search for cars directly from the main Google search page. Given that 66% of dealer website visits originate from Google, it makes sense for the tech giant to capitalize on this by capturing a piece of the market.
Under the Google model, customers will be able to search for cars directly from the search page and receive dealer leads through an auction-based system. Dealers pay for these leads, with a California Toyota dealer telling Automotive News that they are paying $22 per car lead and $26 per truck or hybrid lead, slightly higher than the $20 paid to competing platforms.
Reviews have been mixed. Some dealers appreciate the flexibility of paying for leads, while others express frustration that potential customers can contact them anonymously—through disposable phone numbers or email addresses that expire after a certain number of unreturned calls or emails. Dealers argue this reduces the quality of the leads they receive.
Despite these concerns, Google Cars is impossible to overlook. With its vast resources and market reach, Google is poised to become more influential than TrueCar ever was in its dealings with both dealerships and OEMs. Regulatory bodies could pose a challenge for Google (especially given the lobbying power of NADA and other dealer associations), but the tech giant has the financial muscle to mount a serious challenge against established players.
On a smaller scale, Google Cars is likely to create significant competition for the major players in the online car retail space. Websites like Edmunds, Kelley Blue Book, Cars.com, and even TrueCar are now at risk of losing market share to Google Cars. This shift is due to the strength of the Google brand and the superior user experience that it offers. Once customers realize they can access an excellent car shopping tool without ever leaving Google’s platform, the competition will face a tough battle to win back those users.
A key critique of Google Cars at this stage is the lack of content, such as car reviews and industry news. However, Google has never been a content-driven company, and they are adept at avoiding this space. Instead, they’re likely to focus on aggregating a wealth of automotive content from external sources. This approach could appeal more to car enthusiasts than casual shoppers.
A successful Google Cars program could also create waves beyond the immediate online car shopping space, affecting other platforms that generate revenue from selling leads. These companies often supplement their services with content—something they might struggle to provide in the face of Google’s dominance.
Beyond its potential revenue, Google’s auto shopping platform offers a new way for the company to gather consumer data. Given that purchasing a car is likely the second-largest financial decision most people make, Google will collect detailed personal information about consumer preferences, going beyond basic choices like color or transmission type. Google already has the ability to predict purchasing intent based on browsing data, and a car shopping service could further solidify that capability.
Read about: The Future Changes in the Automobile Industry!
