TORONTO -

The number of Canadian dealers utilizing a multi-platform retailing strategy — selling cars on their lots and online — continues to grow every year. In fact, now it is rare to find a dealer that isn’t posting inventory on the Web.

In light of this trend, IBIS World just released its “Online Car Dealers in Canada” industry report.

Sean Windle, IBIS industry analyst, said that with economic recovery and increasing demand, more companies are “tapping into the online car dealers industry.”

“Given the low capital equipment start-up costs and moderate barriers to entry, the industry is projected to experience an influx of new operators in the coming years,” he added. 

That said, the report contends that growth in online sales by dealers is expected to slow over the next five years.

The company explained that while demand is growing from consumers and business, the “industry continues to face challenges in luring consumer to buy cars online.”

Besides this obstacle, changing tax laws may affect the online side of the industry in the near future, as well.

“The industry faces threats from potential future legislation that would give states the ability to collect sales tax from out-of-state online retailers,” IBIS officials said.

These factors may increase costs for online car dealers and have a negative effect on demand and profit, according to the new report.

Editor’s Note: Interested in new technology for dealers? Check out the next edition of Auto Remarketing Canada that will feature a Technology Roundtable special section. This edition will be available later this month. Stay tuned!