US online car dealers crash out - Europeans stand firm

European online car dealers remained bullish today in spite of the collapse of another major US auto retailer.

June saw the failure of US-based dreamlot.com and autoallies.com, but last Friday, Carorder.com joined the growing list of high-profile failures.

However, car e-tailers in the UK deny claims that the trend will soon hit Europe. Charles Tyrer, the MD of online auto retailer Eurekar.com, told silicon.com: "We are successful and believe in our business model. Ninety per cent of our customers know what kind of car they want which makes the internet an ideal place for shopping. Going to a car showroom can be a daunting experience for many customers."

Mark Godfrey, marketing manager at Jamjar.com - which has already sold 100 vehicles since its launch last month - agreed: "Car buying habits are changing and once people become more accustomed in shopping online, our business model will be a success."

But analysts and the industry associations aren't convinced. Alan Pulham, director at the Retail Motor Industry Federation, said: "Too many car e-tailers are trying to get away with a minimalist order-taking system based on no stock, no clear commitment on timely order fulfillment and no credibility.

"Despite promises of large savings, customers want either immediate supply or an authoritative delivery commitment before they will trust car e-tailers."

Analyst Mat Hanrahan at Bloor Research echoed that view. "The market is still too immature to speak of success. Selling large valuable commodity over the internet is still seen as uncertain venture as customers are being cautious of rogue dealers. The US e-tailers have burnt out in the early stages because of too many entrants in a very competitive market," he said.