G.M. to Open Doors of Online National Showroom
By MICHELLE KREBS -- October 1, 1998
The burgeoning Internet has often been compared
with the automobile industry in the early days of
mass
production. Now the big auto makers want to take more
of their business online.
The General Motors Corporation intends to become the
first auto maker to offer nationwide Internet shopping
for the cars and trucks sitting on participating
dealers' lots.
The company announced this week that
GM Buy Power, a Web site, would start
operating in the first quarter of 1999,
enabling customers to do everything
over the Internet except actually buy and take delivery
of a vehicle, which must still be done at a dealership.
The online customer will be able to schedule a test
drive, ask the dealer to hold or locate a specific
vehicle, find out the dealer's best price on a selected
vehicle and apply for pre-approved financing from the
General Motors Acceptance Corporation. The Web site
will list all vehicles in inventory at dealers
participating in the service, with the list updated
daily.
Unlike such other online buying services as Autobytel
and Microsoft's Carpoint, GM Buy Power will not limit
consumers to shopping a specific geographic area,
giving them a wider choice, a spokesman for G.M. said.
G.M. dealers will not pay a monthly subscription fee to
participate in the service and, for the first nine
months of 1999, G.M. will not charge dealers an
enrollment fee. Other services require a monthly fee in
return for limiting the number of dealers in an area
who can participate.
All G.M. dealers can be part of GM Buy Power if they
agree to certain customer standards; install required
computer hardware, which costs about $1,000, and send a
dealership manager through training.
G.M. research shows that customers want the time needed
to buy a vehicle at a dealership to be an hour to an
hour and a half instead of the usual three to five
hours, said Ron Sobrero, the Chevrolet general sales
and service manager who is a leader of the national
roll-out of the site.
The Internet is becoming too popular with car shoppers
for auto manufacturers to ignore.
Nearly 25 percent of vehicle shoppers search the
Internet for information before buying, a number that
is likely to rise to 50 to 60 percent in 2000,
according to a recent study by J. D. Power and
Associates of Agoura Hills, Calif.
G.M.'s decision to take the online shopping service
nationwide follows a successful test started in October
in four Western states: California, Oregon, Washington
and Idaho. In the test, the Buy Power site received
more than 670,000 visits in its first 10 months, with
users spending an average of 11 minutes there, making
it one of G.M.'s most active sites. More than 60
percent of the dealers in the region participated in
the service, and consumers made more than 300,000
online searches for GM Buy Power dealers.
Both Ford Motor Company and the Chrysler Corporation
plan to upgrade their Web sites and to offer similar
listings of dealer inventory and the ability to find
out a dealer's best price. Both currently offer model
specifications (but not listings of specific vehicles)
and the ability to get a quote from a dealer on a car
or truck via phone or e-mail.
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