The Internet is changing the way people buy books, flowers and airline tickets. General Motors is convinced it also will fundamentally alter the way it sells cars.
The world's largest automaker said yesterday it plans a national rollout of a Web site that lets consumers track down the exact model car or truck they want, print out a window sticker, schedule a test drive and get a commitment on a low purchase price from a local dealer.Shoppers still must negotiate final terms, financing and trade-in allowance in person. But GM hopes its new GM BuyPower program will streamline the car-buying process - an ordeal that many consumers consider slightly less dis-taste-ful than root canal surgery.
Consumers in California, Washington, Oregon and Idaho have had access to a pilot program at (www.gmbuypower.com) for almost a year. An enhanced version of the site will be launched for all 50 states in the first quarter of next year.
GM, the first major automaker to launch a Web initiative, will be going up against several well-established sites that provide consumers with car-buying in-for-mation and dealer referrals. Among the leaders in the young field are (www.autobytel.com), (www.autovantage.com) and (www.carpoint.com).
They're all fighting for a piece of what is shaping up to be a huge market. A recent survey by J.D. Power and Associates found that 25 percent of all new-car buyers use the Internet to arm themselves with product and pricing information.
No one is suggesting that people will buy cars directly over the Web - at least for the foreseeable future. "In the short term, the Internet is a tool for helping customers work within the traditional shopping process, not circumvent it," said Chris Denove, director of consulting operations for J.D. Power.
"You're still talking about a major purchase, where the customer needs an extra measure of comfort you get by dealing with a person," said analyst Richard Hilgert of First of Michigan in Detroit.
What is clear, however, is that dealers are going to have to change the way they sell cars to savvy shoppers who sometimes know more about the cars they're buying than the salesmen do.
Despite the marketing advantages the Internet offers, GM may have a hard time selling GM Buy-Power to its 8,000 dealers. Only 60 percent of GM dealers have signed on in the pilot states.
The program has resulted in just 8,000 car sales so far, prompting some dealers to call it a flop.