August 21, 2000

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GM And Its Dealers Propose Auto Web Site

Open site would link to any automaker's dealers to reduce use of third-party sites

By Bob Wallace

More on GM:

More Online Help For Auto Dealers (6/12/00) EETimes Partnerships could change buying experience (7/31/00) EETimes e-GM drags giant into a new era (7/31/00)

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n an effort to slow the use of independent Web sites by its dealers, General Motors Corp. and some of its key dealers have proposed launching a retail car-selling site that would include vehicles from other automakers and links to their dealers.

The site, which would be jointly owned by GM and its dealers, would list invoice prices and other information needed for comparison shopping, and deliver leads to GM and other car dealers signed up for the service. GM is briefing its dealers on the plan and says it will build the site only if a majority approve.

"This move shows that GM has taken to heart research that shows that consumers prefer using an independent buying site not affiliated with any one automaker," says Chris DeNove, a director at J.D. Power & Associates. "The big challenge for GM will be to generate the perception with consumers that the site is truly independent, as opposed to another outlet for selling GM vehicles."

Another challenge will be to convince non-GM dealers to participate.

"I can't see myself or other dealers signing up for something that says GM on it because there's no bond of trust," says David Abatsis, owner of Acton Ford in Acton, Mass. "And we have many established third-party services out there today."

GM views the proposed site as one way to strengthen relationships between dealers and consumers. "We see this as a way to use the Internet to take better control of our business by creating a single unbiased portal that gives consumers access to more inventory and pricing information," says Mike Gluck, manager of business development for the company's e-GM unit. He says most auto dealers use several third-party referral services.

Automakers have been battling independent, third-party auto sites, which are being used by a growing number of car buyers. GM's initiative is aimed at replacing Web sites that provide lead referrals to subscribing dealers. GM and Ford have also sent letters to dealers warning them not to sell cars to online brokers--such as CarsDirect.com Inc., which resells the cars directly to consumers--or the dealers will risk penalties.

"Third-party services were great in the beginning, and we use four today. But if the proposed site is successful, we won't need them anymore," says Sam Slaughter, VP of Bob Sellers Pontiac-GMC in Farmington Hills, Mich., a member of GM's E-council. "In trying to work with GM to maintain customer relationships and with marketing efforts, the last thing we want in the way is third parties."

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