LAST YEAR, GENERAL MOTORS CORP. AND FORD Motor Co. announced major Internet-based initiatives designed to someday allow customers to configure and order vehicles on line for delivery in about 10 short days.
My initial reaction was "yeah, right!" Dealers didn't know what to think, other than the manufacturers had to be trying to figure out yet another way to cut them out of the retail process.
To their credit, both Ford and GM insist that when or if the 10-day vehicle ever happens, customers will be required to pick up their creations at franchised dealerships.
Part of my "yeah, right" response came from having covered the supplier side of the industry for years. It would take years, I figured, for manufacturers and suppliers to organize to that degree. Besides, the manufacturer relationship with suppliers sometimes can be as tense as it is with dealers and with unions.
Let's look at the logistics that would have to fall into place for a 10-day vehicle to be possible.
A customer goes to a dealer or auto company website. He selects the make and model vehicle he wants. He clicks on his preferred color, selects his interior trim package, clicks on a few accessories and a pretty picture of the finished product appears on the computer screen. A price also appears. The customer enters a credit card number for a deposit and clicks on a button for the manufacturing process to begin.
The electronic data package goes instantly to the manufacturer and then on to the suppliers who put parts on that particular vehicle. The data also goes to the assembly plant that has to make sure the right parts and paint colors are ready to go when the vehicle goes down the assembly line.
The parts have to be delivered at exactly the right time for this system to work, and until recently it wasn't much more than a pipe dream.
There are hundreds of supplier companies. They make everything from the littlest of screws to the largest chassis systems.
The only parts the automakers actually make anymore are engines and sheet metal panels.
All of these companies would have to be wired and networked for the so-called 10-day car to be a reality.
Well, last month GM, Ford and DaimlerChrysler announced that they were setting up what amounts to a place on the Internet where all three manufacturers would procure parts. Purchasing contracts would be issued and bid for on-line.
At first glance this doesn't appear to be an announcement that affects dealers. But if you look deeper, it does.
If this scheme works, suddenly all automotive suppliers are wired and networked with the manufacturers, making the 10-day car much more possible and realistic. Much of the configuration and e-commerce technology already exists and is in use in this and other industries.
I generally take a wait-and-see attitude to newfangled ideas such as Intenet auto sales. But, believe me when I say that this Big Three purchasing announcement is a huge step in the direction of making on-line customer-ordered vehicles a reality.
Instinct tells me the vast majority of people will never really want to buy something as large as a motor vehicle without seeing it in person, kicking the tires and smelling that new-car smell first. The latest research, conventional wisdom and the reality of what's going on in the market tend to back up my instinct.
But if dealers haven't begun to change the way they look at the potential of the Internet, now is the time.
Tim Keenan is senior editor of Ward's Dealer Business. He can be reached at [email protected]
