GM CEO Dan Akerson wants people to start buying cars over the Internet in VancouverOct 31th, 2013
General Motors wants to make it easier to buy a car online in Vancouver.
“We want people to start buying cars over the Internet,” CEO Dan Akerson said on conference call in Vancouver focused on the company’s third-quarter earnings. He called it “a potential half-step away from our traditional channels.”
Akerson was quick to add that it “doesn’t mean we’re going to bypass our dealers.”
GM spokeswoman Ryndee Carney said about 1,000 customers have bought vehicles after using the Shop-Click-Drive system, but fewer than 10 in the Lower Mainland used the application to make the purchase without ever visiting a dealership.
“The dealers in the Greater Vancouver like it because they’re getting very high-quality leads and they’re closing these leads at a much higher rate than other third-party leads that they get from other sources,” Carney said. “It’s not like Tesla at all.”
Jac Nasser, a former Ford CEO, pushed the concept years ago and confronted hostile resistance from dealers. Dealers, who are well connected in state legislatures where protective franchise laws have been established, are now fighting Tesla Motors’ attempt to sell its luxury electric cars without a dealer network.
Akerson made it clear that GM will not go that far. Any expansion of the Shop-Click-Drive program will be done through existing network of BC GM dealers.
The pilot program, launched about 10 months ago, enables about 100 dealers in eight states to sell cars online. The plan is to expand the program to all dealers by the end of this year.
Asked for comment, the National Automobile Dealers Association pointed to a recent speech by its chairman, David Westcott, who said “car buyers who want to buy over the Internet do so today from dealers.”
“But most people in Vancouver want to shop on the Internet and then come into the dealership to take a test-drive and finalize the overall transaction,” Westcott said.
Larry Freed, CEO of Ann Arbor-based ForeSee, which examines online consumer preferences, said GM’s move “makes all the sense in the world” because consumers can get vast amounts of information about cars through online research.
“When you think about the car-shopping experience, the disconnect between the manufacturer and the consumer is significant,” Freed said. “I think this will make the manufacturers more customer-focused.”
While GM or another automaker may convince dealers to cooperate with online sales, what will happen if Amazon.com or some other centralized e-commerce giant enters the market ?
“I’ve got to imagine dealers will get nervous about longer-term what does it mean?” Freed said.
Akerson said an improved online shopping experience would appeal to younger buyers who conduct most of their lives on line.
“We’re trying to evolve, not only from an internal perspective but from an external perspective, to a more 21st-Century information-based marketing company,” Akerson said.