DEALERS GET SOME OF GM'S BUYING CLOUT

A new General Motors Corp. Internet service is touted as giving GM dealers some of the automaker's purchasing clout.

It allows dealers to purchase everything from office supplies to fuel on line, cutting costs and reducing the time spent procuring such items individually.

GM dealerships spend about $1 billion on supplies including furniture, fuel, computers and assorted equipment and services, says William Lovejoy, GM group vice president for vehicle sales, service and marketing.

“GM Dealer Supply Advantage aims to reduce such costs by providing a wide selection of products and services to GM dealers in one efficient marketplace,” he says. “This web site will provide GM dealers with prices that are based on aggregated GM purchasing volumes and enable our dealers to become more competitive.”

GM estimates that dealers, who pay a $360 annual subscription fee, will save about 15% on such purchases.

The online ordering program comes about two years after DaimlerChrysler AG launched their version of an Internet-based marketplace, Five Star Market Center.

Since then, more than half of Chrysler, Jeep and Dodge dealers have started using it, saving on purchases including office supplies, fuel, uniforms, computer equipment and shipping services.

“Dealers seem to be happy with this, and obviously there's room for growth,” says Dianna Gutierrez of E-Business and IT Communications at DC. “It's our goal to increase dealer participation, it's a savings for them.”

That's what GM hopes to achieve, supported by Covi-sint and The Reynolds & Reynolds Co.

Covisint, founded by DC, Ford, GM, Nissan, Renault, Commerce One and Oracle, is a global solutions provider that brings OEMs and suppliers online to exchange information and make business more efficient. Reynolds & Reynolds is an information management company that helps automotive retailers manage change and improve profitability.

“We're planning on joining. The amount to join it is relatively inexpensive, and if it can save us some money I think it would be worthwhile,” says John Nestor, CFO of Jack Maxton Chevrolet in Worthington, OH.

His dealership currently buys supplies from various local outlets.

“If GM gets a big enough group and they get some buying power out of it, it should lower prices,” says Nestor.

Some dealers say they're not familiar with the new purchasing program, nor do they plan to sign up right away.

“We're going to see what other dealers have to say once they've started using it,” says John P. Fowler, president of Somerset Pontiac-GMC in Troy, MI. “If it works, we'll use it, but we're doing fine without it at the moment.”