Will GM Dealers Begin Selling Cars Online?

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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