Under GM's plan, customers in four states will be able to use the Internet to scan a dealer's inventory, examine sticker prices, agree on a deal, obtain credit approval and place a hold on a vehicle before entering a showroom.
The customer will still have to visit the dealership-or at least have some direct contact with the store-to complete the purchase. Unlike other Internet services, GM's will route computer-shoppers to a specific dealer for a sale.
POSING NEW COMPETITION
GM began recruiting dealers last week week for its GM BuyPower program (www.gmbuypower.
com). It will be offered in California, Oregon, Washington and Idaho (AA, Sept. 8).
The plan poses new competition for the growing field of Internet services created to bypass traditional auto retailing practices.
Ann Noel Pattyn, manager of GM's California-based Consumer Marketing Initiative, estimates that 21% of new vehicle buyers use non-traditional shopping methods, including brokers and the Internet.
She believes GM BuyPower will give the U.S.' No. 1 automaker a leg up on going after the rest of the nation's shoppers.
"The primary benefit of this is that it generates sales and profits and market share," Ms. Pattyn said. "We're confident that this is the next trend in auto retailing. We want to work with our dealers to make them major players on the Internet."
The program will provide inventory and price information over the phone as well as electronically. A toll-free number will give shoppers an operator who will provide the same information.
Ms. Pattyn declined to forecast how many of GM's 738 dealers in those states might participate.
FREEING UP SALESPEOPLE
But one of them, Ron Clauden Jr. of Valley Pontiac-GMC-Buick in Auburn, Wash., said he is eager to join up. Mr. Clauden was one of the dealers GM consulted in creating the program.
"If providing information this way frees up one of our salespeople to focus on selling a car, then it's worth the effort," he said.
GM will include dealers on the system for no charge for the first six months. After that, Ms. Pattyn said, they will pay a fee. The amount hasn't been determined yet.
GM will produce and maintain a Web site, and also provide free training to dealership personnel who will handle the Internet customers. GM will also monitor the operation.
GIVE SHOPPERS SINGLE BEST PRICE
Mr. Clauden said he used to oppose the idea of providing specific vehicle information on the World Wide Web, even though his dealership operates its own Web site. But now, he said, he wants to put out the data.
"Everybody and his brother seems to be on the Internet with a plan to get you the car you want cheaper," he said. "The idea here is to give shoppers our single best price. We didn't want to throw too much information at consumers. But now they're getting it anyway from other Internet services-and not always correctly. If customers are going to get it, let's give it to them ourselves."
The new approach is the latest GM gambit to strengthen its standing in the import-heavy western U.S.
Over the past few years, GM has been trying to reassert itself in particular in the large California market, where it had been bested by No. 2 Ford Motor Co.
STOP HAGGLING OVER PRICES
GM's "value pricing" program in California has rallied GM dealers to stop haggling over prices with customers there. The program, which began in 1993, reduced the number of model variations. The fewer models were packaged with popular features and given lower-than-normal prices.
Ms. Pattyn said the program helped GM boost California sales by about 45,000 units last year.
The value-pricing approach is critical to the new Internet campaign, Ms. Pattyn said. Because retailers will publicize their sale prices, the prices must be consistent from dealership to dealership.
Customers will have the option of selecting a specific dealer from the GM Web page, or allow the system to select the three closest dealers.
If one dealer does not have the specific model the customer wants, that dealer will have to order it from another.
Making the customer track it down, Ms. Pattyn said, "would not be customer friendly."