GM Scraps Plan To Sell Cars Over Web - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


GM Scraps Plan To Sell Cars Over Web

The Detroit automaker says it's giving its AutoCentric project the red light, "due to a determination that the business model is not viable at this time."

For General Motors Corp., cars move too slowly on the information superhighway. The $184.6 billion auto and truck maker has dropped plans to form a separate company with dealers to sell cars over the Internet.

AutoCentric, unveiled in February, would have cost $50 million to start, with GM putting up half and selling the remainder to its 7,800 dealers. But in a Securities and Exchange Commission filing, the Detroit automaker said it was giving the project the red light, "due to a determination that the business model is not viable at this time."

GM's plan to scrap AutoCentric follows a decision the company made in November to fold its E-business unit, e-GM, back into the corporate organization, including the unit's 100 employees. The 2-year-old venture was responsible for GM's Web sites and included GM's OnStar in-car communications unit, which mostly operated independently.

With the disappearance of e-GM went plans for possibly buying a stake in an independent, third-party auto site that offers consumer information and sells new and used cars over the Internet. Instead, GM will continue its partnership with Autobytel Inc. in testing systems that link customers to dealers.

GM's decision to scale back its Internet plans is similar to rival Ford Motor Co.'s plan to cut back on E-business initiatives and focus on its core business. Carmakers once believed they could use the Internet to quickly grab market share from competitors, but analysts say the manufacturers have learned that the basics of quality, design, and cost remain most important. Says Kevin Prouty, market analyst for AMR Research Inc., "Wall Street no longer gets excited about the latest E-business initiative, but has gone back to looking at margins, inventories, and the excitement of new designs."

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of IT & Cybersecurity Operations 2020
The State of IT & Cybersecurity Operations 2020
Download this report from InformationWeek, in partnership with Dark Reading, to learn more about how today's IT operations teams work with cybersecurity operations, what technologies they are using, and how they communicate and share responsibility--or create risk by failing to do so. Get it now!
10 Cyberattacks on the Rise During the Pandemic
Cynthia Harvey, Freelance Journalist, InformationWeek,  6/24/2020
IT Trade Shows Go Virtual: Your 2020 List of Events
Jessica Davis, Senior Editor, Enterprise Apps,  5/29/2020
Study: Cloud Migration Gaining Momentum
John Edwards, Technology Journalist & Author,  6/22/2020
Register for InformationWeek Newsletters
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll