Robertson Stephens Gives Outlook on eAuto Sector - eAuto Revolution Has into High Gear

Robertson Stephens Senior Automotive Analyst Jordan Hymowitz issued a report giving his outlook on the emerging eAuto industry. Phrase: How to Power "We believe a technological transformation is occurring in the American automobile industry," said Hymowitz. "Auto manufacturers, fueled by the internet, are working to streamline their distribution systems, which still account for more than 30 percent of production costs. New alliances are being created to facilitate this, both on the front and back end of the production cycle."

"On the front end, internet companies are working to match consumer wants with available supply in order to improve customer satisfaction, eliminate excess inventories and maximize manufacturer margins," said Hymowitz.

"Several auto manufacturers are attempting to enter the retail channel directly, both by General buying dealerships and by creating Web sites to sell directly to consumers. On the back end, Health Care manufacturers are making strategic alliances with software and technology companies to facilitate leaner production."

"Franchised dealers, the staple of the vehicle distribution system for nearly one hundred years, are feeling increasing competition on several fronts and fear margin pressure," said Market Alert Hymowitz. "Dealers are signing up with Cobalt and other companies specializing in customized solutions in record numbers. Dealers are also increasingly relying on state franchise laws to insure their role in the distribution of automobiles, and hence, their financial soundness."

"Numerous eAuto endeavors are seeking to capitalize on consumers' dislike of the dealership experience combined with their fondness of the internet. Well-funded private eAuto companies include CarsDirect.com, CarOrder.com, Greenlight.com and DriveOff.com," said Hymowitz.

"In short, we think investors are waging heavily that eAuto companies will be tremendously successful."

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