GM considers online sales for all cars

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by Jennifer Disabatino

(IDG) -- General Motors Corp. is considering a venture that would allow consumers to comparison shop for cars without a high-pressure sales pitch.

In a filing with the Securities and Exchange Commission (SEC) Friday, the Detroit automaker said it would either buy an existing Web site, such as Carsdirect.com Inc. in Culver City, Calif., or start one on its own with investment money from dealers. GM is also proposing to sell cars and offer information on all makes and models of cars on the site, citing research that indicates many consumers prefer "independent" dealers on the Web.

The announcement comes at a time when many start-up Web ventures are failing, while older, established businesses are investing more in their Internet offerings.

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The GM BuyPower Web site, which sells GM vehicles exclusively, will continue to operate, according to the filing.

The proposed company, to be called AutoCentric JV LLC, will be formed only if there is "sufficient interest among the GM dealers," according to the SEC filing. The filing is a notification of intent to sell shares in the online venture, should dealers show sufficient interest.

The offering is good news for consumers, said analyst Hiro Mori at Automotive Consulting Group Inc. in Ann Arbor, Mich.

At the very least, consumers can do their research online at home before approaching a car salesman on the lot, he said.

However, getting some dealers to buy into this may be tricky, since it may require some standardization of inventory-tracking software. Dealers have resisted such attempts at standardizing systems before, Mori said. Plus, different departments within GM, such as sales and purchasing, may not use the same software.

"GM does not now have good data on consumer trends to put into a production schedule," he said, but all Big Three auto manufacturers, GM, Ford Motor Co. and DaimlerChrysler AG, are all working on integration projects between different systems and software.

"[Their] information processing ability will improve in the future," Mori said. "That's a big task. I don't think it's going to happen overnight. But, I think everybody's moving in that direction."

In the SEC document, GM said it may not sell cars directly but could work through dealers who buy shares in the online company. Those companies could offer all or part of their inventory online.

The dealers could then offer cars with an "e-price," or a firm price that avoids haggling on Web-listed inventory. Or, the dealer could list the models as "referrals," or vehicles that are in stock but without a price, which allows more room for bargaining. A customer would then contact the dealer and ask for a price on the "referral" cars. The filing also suggests that consumers could put a deposit on a car over the Internet.

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Carsdirect.com
GM BuyPower
General Motors

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