By increasing the reach of information, the Internet allows car buyers and consumers in general to have more power in the trading process, reducing risk and transaction costs. Popular Web sites like autobytel.co.uk and autotrader.co.uk allow for new and used car prices to be compared across the country. In addition, reviews and advice for are also accessible from the same place. This allows a customer to research the vehicle they are interested in, and importantly become aware of the price they should expect to pay. Entering into a transaction armed with this kind of information reduces the risk and increases the probability of striking a good deal.
Most major manufacturers are now at least part way into developing on-line trading exchanges.
Particularly noteworthy is the initiative by Ford, General Motors, and DaimlerChrysler. This will bring together manufacturers, suppliers, partners, and dealers in a single marketplace. Indeed, all areas of supply chain management will be touched in some way by this venture. This shows, in a very clear and unambiguous way, that organisations are not just streamlining themselves to leverage the economics of information and minimise the impact of transaction costs, but are actually willing to create new alliances and fundamentally restructure the way they operate to attempt to secure their future. The concepts of transaction costs and the economics of information are not difficult to grasp, and many would claim that the process of utilising them comes as second nature.