Acres of parking lots marked by color-coded signs surround a large, high-ceilinged building of tan brick and glass. Inside, instead of battered desks and lots of pushy sales representatives, the office contains curving cubicles of polished wood, with computers to describe the features of every car on the lot.

But as heavy sleet turned to snow in this Detroit suburb, a team of liquidation experts poked through the cavernous showroom, trying to determine what could be sold and how quickly, from the cars to the computers. For while AutoNation has succeeded in creating a cheerful, comfortable place to buy used cars, it has failed to do so in a way that would earn money.

Throughout the century-long history of the auto industry, selling cars -- particularly used cars -- has been a gritty business. Profits usually flowed to the hardest-nosed bargainer, the dealer who negotiated the highest possible price for each automobile while spending as little as possible on amenities like furniture, carpeting and salaries.

AutoNation and other big, publicly traded companies captured Wall Street's fancy three years ago by trying to change all that. Now they are struggling as the car-sales industry is buffeted by the rise of the Internet, a fall in used-car prices and a push by traditional dealers to improve customer services.

Some of these new-wave car sales companies built used-car superstores that looked like cafes, not junkyards, and employed computer kiosks and child-care centers to lure customers to immense lots that offered as many as 1,000 late-model cars. The same companies, plus a few others, later created big chains of new-car dealerships that would share ad budgets and back-office staff to build national brand names at relatively modest cost.

But now the used-car superstores are disappearing almost as fast as they appeared, while the chains' new-car dealerships try to cut costs after sometimes lavish expansions.

AutoNation's announcement that it would close most of its used- car superstores and slash costs at its headquarters signals the unraveling of that original vision. To some extent, investors had already seen it coming: With the exception of Lithia Motors, the most old-fashioned of the publicly traded auto dealerships, stocks in those chains had already slumped. Since early 1997, price-earnings multiples for the dealer chains have tumbled from as high as 50 to just 8 or 9, as low as the multiples for auto manufacturers.

But the troubles are far from over. "The initial Wall Street projections were so off-base that you had this land rush into the industry," said George Hoffer, an economist at Virginia Commonwealth University.

What went wrong? The publicly traded dealership chains appear to have been buffeted by several forces that few anticipated.

Most notably, the Internet has made car buyers more conscious of what constitutes a fair price and better able to check prices without shuttling among dealerships. These informed consumers give dealers with low costs and little overhead the advantage, because they can afford to sell cars at rockbottom prices.

Meanwhile, largely because prices for new cars have leveled off, prices of late-model used cars have fallen recently, hurting the value of the inventories at used-car superstores.

Long-maligned traditional dealers also seem to have improved customer service, partly to match the competition and partly in response to pressure from automakers, including some that are experimenting with operating dealerships themselves.

Finally, dealers have used their muscle in state capitals to strengthen franchise laws. Even where the rules have not been tightened, the laws already make it hard for publicly traded dealership companies, automakers and Internet companies to expand their retailing efforts.

Super-dealerships, thus, are undergoing a metamorphosis: Auto executives are replacing the financiers who built the chains and are moving quickly to reduce costs. In August, Roger Penske, the car dealer and diesel-engine magnate, took control of United Auto Group, the nation's second-largest dealership chain, from Marshall Cogan, a financier. Michael Jackson, former head of Mercedes-Benz's North American operations, became AutoNation's chief in October, replacing Steven Berrard, a video-rental executive and friend of H. Wayne Huizenga.

It was Huizenga who conferred Wall Street credibility to the idea that publicly traded corporations could consolidate the auto dealership industry; Huizenga had already consolidated the garbage- hauling and video-rental businesses, building first Waste Management and then Blockbuster Entertainment. In 1995, Huizenga took control of Republic Industries, a small garbage hauler, and set about turning it into what is now AutoNation, the world's largest auto retailer.