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Consumers Drive Disruption in the Automotive Industry Consumers Drive Disruption in the Automotive Industry

No one doubts the auto industry is going through disruption right now. Existing industry leaders are busy repositioning themselves to fuel the changes that are evolving within the car buying experience. Speaking of repositioning, do you know what became of BackRub, Jerry's Guide to the World Wide Web, or Philip Morris? (The answers are at the end of the article).

I recently attended the AUTOVATE conference hosted by Cliff Banks of The Banks Report in Austin, Texas that brought together industry leaders to discuss disruption in the automotive industry. We heard about the very progressive dealer in Manhattan, Paragon Honda, which offers service in the evenings. They pick up your car, take it to the dealership to perform maintenance, and return your car in the morning. This is a huge benefit for consumers and it brings in additional revenue for the dealership when the service bays are traditionally empty.

At AUTOVATE, there were discussions about how the ultimate pricing transparency could become one-price selling (we can add Saturn to the list above) and that dealer counts may dwindle as more and more of the car buying experience is done online.

And if you have not heard of Blockchain Technology, then study up as this is predicted to change almost every aspect of how cars are manufactured, owned, used, and financed.

Artificial Intelligence (AI) and Machine Learning (ML) are at the top of every new product or service offering to dealers. Did you realize that the order of the pictures displayed to consumers can have an impact on sales and through ML, computers can not only determine the order but also automatically display the photos in the appropriate order for maximum impact? Great stuff and another example of disruption in the automotive industry.

The most immediate shifts are what we read about every day - ridesharing, autonomous vehicles, electric vehicles, online transactions, flexible ownership (no set ownership or financing terms), subscription services (one monthly fee with the ability to switch out vehicles), and buying without a franchised dealer being involved.

Next come the questions "when" and "why?" The answers? When consumers want it and when they demand it. You see, consumers are driving these changes while we as industry partners (I dislike the word "vendor") rush to fill the void and provide what the customer wants when they are ready for it.

Now the answers to the trivia question from above: BackRub became Google (after taking up too much bandwidth on Stanford's servers); Jerry's Guide became Yahoo (once the founders got serious about their vision); and Phillip Morris became Altria (to distance itself from tobacco-related health problems).

Speaking of disruption in the automotive industry, here's another example.  Pioneer of the automotive Internet, Autobytel - often referred to as AutoByTell - was founded in 1995. The company was originally designed to sell cars by fax and on QVC - hence the name AutoBy"Tel" (as in telephone). With the launch of the Internet, Autobytel's business model shifted and the automotive industry was never the same again.

Today, we are now known as AutoWeb. AutoWeb reflects our new operations and corporate strategy as we apply AI and ML to communicate with the right consumer at the right time with the right message, and ultimately, to connect more in-market automotive shoppers with franchised retail dealers. Our new name (and stock ticker AUTO) reflects what we have evolved into - Autos and the way the Web is used to give consumers the experience they desire.

After all, they're in the driver's seat of disruption.

Rich Shugg is Senior Director of Strategic Accounts for AutoWeb, Inc. (formerly Autobytel), offering the industry a full suite of high quality lead products and advertising services, including AutoWeb Traffic, TextShield, and Payment Pro. For more information, text or call 949.702.1162 or email For more dealer training, tips, advice, and news, visit

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