GM to Sell Cars Online--a First for Major Car Makers
General Motors Corp. plans to begin selling cars over the Internet next month as part of a service aimed at West Coast customers that is the first of its kind among major automobile manufacturers.
The service, unveiled Wednesday, puts GM in competition with Microsoft Corp. and a handful of independent companies jostling for access to the growing number of consumers shopping for vehicles online.
Created by GM’s regional marketing division in Thousand Oaks, the program will enable consumers to select specific models, check inventories at local dealerships, arrange financing, schedule test drives and request guaranteed price quotes--all by computer.
The service does not enable consumers to completely bypass dealers and is available only in California, Oregon, Washington and Idaho. But GM executives said it is a central component of the company’s ongoing effort to rebuild sales on the West Coast after a steep decline during the 1980s.
“We’re confident this is going to translate to more market share for us,” said Ann Pattyn, manager of GM’s Consumer Marketing Initiative, which created the program.
GM is the first auto manufacturer to launch such a service, although others are also paying increased attention to the sales potential of the Internet.
Chrysler Corp., for example, recently began testing an Internet price-quoting service in Maryland, and officials said the company is considering rolling it out nationwide. Ford Motor Co. allows customers to obtain price quotes from certain dealers through its Web site, although the manufacturer does not guarantee the quote. Many individual auto dealerships also have Web sites that offer quotes.
There are dozens of Internet sites offering car ratings and breakdowns on invoices. But GM’s site, at https://www.gmbuypower.com, enables customers to take care of the bulk of a transaction online and visit a dealer only to sign the paperwork and drive the car away.
Customers place an order, then receive a call, fax or e-mail within 24 hours from a nearby dealership offering the specific car at a specific price. Customers are free to try to find a better price elsewhere, putting pressure on the dealer to produce a compelling offer.
One of the early leaders in this marketing concept is Auto-By-Tel Corp., an Irvine-based company that has built a network of 2,500 dealers nationwide and now claims to handle about 75,000 purchase requests a month.
Microsoft has also moved into the market with the expansion of its CarPoint Web site two months ago. Executives at Auto-By-Tel and Microsoft both dismissed the impact of General Motors’ arrival.
“They will have a bias for GM, and that’s not what the Internet is about,” said Mark Lorimer, chief operating officer of Auto-By-Tel. “We can provide information about all makes and models, as well as used cars. It’s a one-stop shop.”
The GM program could add to the strain faced by dealerships, which have seen the Internet erode their negotiating power with consumers.
“You’ve got to figure out a way to cut overheads and sell more units,” said Gil Schneider, president of Century Automotive, a Van Nuys group of GM dealerships. “Because by the year 2000, you’re going to go into a dealership the way you go into the supermarket.”
GM officials said that dealer participation in the new program is voluntary, although the company expects few to decline because to do so means forgoing referrals. GM also said the new Web site will be accompanied by a toll-free telephone number offering the same service.
Shares of GM were unchanged at $65.25 on the New York Stock Exchange.
