GM to expand its OnStar service

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General Motors Corp. soon will offer wireless carriage outside the horseless carriage, expanding the capabilities of its in-vehicle OnStar telecommunications system to out-of-vehicle, hand-held devices in the first quarter of 2002.

Mark Hogan, GM group VP and president of its e-GM arm, disclosed the move at the non-profit Digital Detroit's second annual conference last week. He declined to provide details, saying more would be revealed at Detroit's auto show in January, but stated the move is "clearly where we want to go."

The industry's profit margins on car sales have been squeezed by rising competition and hefty incentives, so collecting fees for OnStar's navigational and communications' services is another revenue generator for GM. It's also a way for the auto giant to stay in touch with owners between auto purchases.

GM has nearly 2 million OnStar subscribers. They use embedded Verizon wireless phones in their cars and are linked via satellite to call centers for things such as roadside help or traffic reports.

Initially, OnStar cost $699; GM now includes the cost of installation in the price of more than 30 models. The option includes one year of service. After that, basic service costs $199 annually, but the annual cost can rise to $399 for added services such as Virtual Advisor, which provides voice-activated data from the Internet, including news, weather and e-mail. There's no screen.

OnStar is also available on American Honda Motor Co.'s Acura RL sedan, Audi of America's A4 and Toyota Motor Sales USA's Lexus LS430.

Other evidence of the auto giant's New Age tendencies:

GM spent $25.4 million on Internet advertising in the first half of 2001, making it the nation's largest online advertiser, according to Taylor Nelson Sofres' CMR. GM was the only automaker among the top 10 spenders for the period.

Mr. Hogan said GMAC, GM's finance arm, completed 32,000 online loans this year, making it tops in that arena. The auto marketer plans to expand online local pilot tests nationally to sell vehicles. Local dealers in the pilots in Minneapolis and Washington, D.C., listed pooled inventory at special prices.

GM's no-interest financing incentive, which started in late September, has tripled the number of leads coming into GMBuyPower (www.gmbuypower.com) to some 2,400 per day.

Mr. Hogan said the marketer's dealers sold 135,000 vehicles to each other this year other via online auctions, saving as much as $500 per vehicle vs. attending auctions.

Globally, GM consolidated its 19 global customer databases into three. Mr. Hogan said the move eliminated duplicate names of owners and prospects. It includes about 80 million GM owners in North America alone.

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