Will GM Dealers Begin Selling Cars Online?

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Wall Street Journal

General Motors’ software, available to its 4,300 dealers, will provide a high-profile test of whether the auto maker can better cater to the needs of online-savvy consumers – online.

Find out more about the possibility and what could stand in the way.

The software, which keeps GM’s 4,300 dealers central to the sale of its vehicles, will provide a high-profile test of whether the auto maker can better cater to online-savvy consumers without running afoul of state franchise laws that give dealers exclusive rights to sell most new cars.

By the end of this year, GM plans to extend a Web-based application, called Shop-Click-Drive, to its entire dealer network. The app would let new-car buyers use their computer screen to lock in the price of a new car, get an estimate of the trade-in value of their old car, apply for financing and even arrange a test drive or delivery of their new vehicle.

GM’s app acts as an electronic door to its independent brick-and-mortar dealers, and so represents a cautious step toward adapting to consumers whose experience with online shopping for appliances and other goods has made them less willing to visit showrooms.

“This is just another way to close” the customer deal, said Lenny George, general manager at Berger Chevrolet in Grand Rapids, Mich.

State franchise laws that protect car dealers mean their pivotal role in auto sales will remain intact. The dealers prefer doing business face to face because it also lets them sell auto buyers more-profitable service work, add-ons or finance and insurance products as well as new cars. New-car sales is one area that has been largely insulated from the online retailing revolution that already has pummeled booksellers and appliance stores.

GM dealers aren’t required to participate in the project, and GM officials say they have had some dealers turn it down. One potential sticking point is that the auto maker for several years has pressured dealers to undertake costly makeovers of their stores—investments that could be undermined if more shoppers buy online. About 100 other dealers have signed up so far through a pilot launched in January in Michigan, Minnesota, Wisconsin and Arizona.

 

 

 

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