General Motors Chairman and CEO Dan Akerson reiterates the automaker’s desire to sell more vehicles over the Internet, saying the challenge to the industry’s traditional dealer-network system fits with today’s customer and the company’s shift to data-driven marketing.
“We want people to start buying cars over the Internet, as a potential half-step away from our traditional channel,” Akerson says Wednesday in a conference call with Wall Street analysts to discuss the automaker’s third-quarter financial results.
GM reportedly wants to expand a recently launched, web-based application called Shop-Click-Drive to all of its 4,300 U.S. dealers. The tool allows customers to shop for a new vehicle, confirm a price and receive an estimate for the trade-in value of their current car or truck. They also can arrange financing and delivery of the vehicle after the purchase.
The tool would challenge the industry’s current distribution system, where dealers buy vehicles at wholesale prices from automakers, then sell and service them at brick-and-mortar retail stores. State franchise laws protect dealers by prohibiting automakers from selling directly to shoppers, and those statutes have withstood past attempts at rewriting the new-vehicle sales traditions.
GM’s plan keeps dealers central to the sales process, the automaker says.
“We’re not trying to bypass our dealers,” Akerson says, adding vehicle sales over the Internet makes more sense today given tech-savvy buyers and an economy underpinned by online shopping. The strategy also fits GM’s intent to become a data-driven business.
“We’re trying to evolve,” he says, “to a more 21st century, information-based marketing company.”
Shop-Click-Drive comprises a larger information-technology overhaul at GM, where the automaker has brought thousands of formerly outsourced IT workers under its payroll, rolled out one of the largest industrial purchases of software of support services and begun consolidating 23 enterprise data centers into two.
The two data centers in metropolitan Detroit represent a $188 million investment and enable GM to perform functions such as conducting high-tech vehicle crash simulations instead of more costly physical tests. It also facilitates work with suppliers and reduces engineering costs, allowing product-development teams to make tooling payments throughout the process and prioritize the timing of critical parts.
Akerson has said GM’s IT plan “drives unnecessary complexity from our businesses while improving our operational efficiency and better supporting our business strategy.”
The first of the two data centers went online earlier this year. Akerson claims it rivals the facilities of IT giants Google and Facebook for its capability.
