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AutoNation revs up new 'virtual dealership' on Web

DEARBORN, Mich. -- AutoNation Inc. is challenging the growing array of online car-buying services with a new Web site that it hopes will help expand its sales nationwide, even in cities where there is no AutoNation dealer.

Publicly traded AutoNation is the nation's largest owner of car dealerships and already sells more than 5 percent of its vehicles online through its individual dealer Web sites. Executives expect its new "virtual dealership" will generate one-quarter of its sales within five years."So far this year, we've sold more than 15,000 vehicles through our more than 270 Web sites; that's $350 million of revenue," said Steven R. Berrard, co-chief executive. "By the end of this year, we'll sell more than $750 million of automobiles online."

AutoNation predicts business will double to $1.5 billion next year and to $3 billion in 2001.

The company, based in Fort Lauderdale, Fla., will link its individual dealership sites through a new nationwide site at www.AutoNationDirect.com.

The site will feature what AutoNation says is the nation's largest inventory of new and used cars, with no-haggle prices and "sales guides" who will be online seven days a week in a live chat room.

The new site, introduced Tuesday, initially will operate only for AutoNation's 17 dealerships in the Tampa, Fla., area. The company plans to expand it to its other markets by fall and to sign up independent dealers in markets where there is no AutoNation store.

AutoNation may become a minority partner in some independent dealerships, especially in smaller markets where it does not plan to expand on its own soon, Berrard told a news conference in the Detroit suburb of Dearborn.

The competition among car buying services, dealer networks, independent dealers and automakers for Internet consumers has become intense in recent years. Few in the industry dispute that the Internet is a significant sales tool.

When AutoNation was started three years ago by entrepreneur H. Wayne Huizenga, the idea was to bring the superstore retailing concept to the used car market. But the AutoNation USA stores had mixed success.

AutoNation then went into the new car business, buying up dozens of franchises and quickly becoming the industry's No. 1 retailer.