General Moters to Test Internet Purchase Program

Responding to the allure of online shopping, General Motors Corp. said Monday it is launching a program allowing customers to complete all but the final steps of a vehicle purchase on the Internet.

Expanding the features of its GM BuyPower Web site, GM will let customers check available vehicle inventories in their area and get a guaranteed “e-price” based on sales in their market.

A dealer would handle the final paperwork.

“We believe there is a market demonstrated for this kind of service,” said GM spokesman Mike Gardner.

A pilot program starting the first week of October will cover the seven Oldsmobile dealers in the Minneapolis-St. Paul, Minn., area, Gardner said.

In August, Ford Motor Co. and its 4,200 Ford Division dealers announced a similar program, set for launch in California within weeks.

The automakers’ Internet sales systems are a response to the growing popularity of online vehicle sales programs, seen as a threat to the traditional dealer-automaker relationship.

“If they can’t beat them, they are going to try to join them,” said Burnham Securities analyst David Healy.

The key to the value of an online vehicle shopping site is the accuracy of its pricing information, Healy said.

FordDirect.com’s guaranteed maximum price and GM BuyPower’s e-price are useful but are not the same as fixed, no-haggle prices, he said.

“Maybe it narrows the range of bargaining, but it doesn’t seem to exhaust it,” Healy said.

The GM site, GMBuyPower.com, already allows customers to get online vehicle information, including the sticker price.

During the Minneapolis-area test, shoppers also will be able to pick the options and features they want, search the combined inventory of area dealers, receive an e-price quote and select a dealer with which to complete the purchase.

“That price is a market driven price, based on what consumers typically have been paying for the same vehicle or a similar vehicle in that market,” Gardner said. “The dealers are obligated to honor that price.”

After a 90-day test in Minneapolis, GM plans to try the program with other nameplates and in other areas. “We ultimately would like to roll this program out nationally by the end of 2001,” he said.

GM dealers are playing a big role in the program’s development, working through the year-old GM e-Dealer Advisory Board, Gardner said.

Ford’s online sales program also is set for launch soon. Announced Aug. 25, FordDirect.com will begin operating in late September or early October in a yet-to-be-named California city, said Ford spokesman Chris Vinyard.

The site will supply a price that “represents the maximum for that vehicle in that market,” he said. Buyers are free to try to negotiate a lower price with the dealer, Vinyard said.

“We know now that the percentage of customers who go on the Internet to shop is something like 60%,” he said. Last spring, Ford’s main Web site was getting 162 million hits a month.

On the Net:

https://www.gm.com

https://www.ford.com