Ford Motor said on Friday it has partnered with its 4,200 dealers to form
FordDirect.com
, an Internet site that will allow customers to configure, price, finance and buy a new Ford brand car or truck online.
FordDirect will allow consumers to communicate with dealers directly over the Internet, giving them the chance to see what kinds of vehicles are available in dealers` inventory from their homes.
The Internet site will publish the invoice price of cars and trucks -- the amount the dealers pay for the vehicles -- in states that allow that price to be published under restrictive dealer franchise laws, Ford officials said.
In other states, the site will publish an e-price -- which the automaker considers a fair market price -- which customers could later negotiate lower with dealers.
Ford officials said they will consider expanding FordDirect to other Ford brands -- including Lincoln, Mercury, Volvo, Jaguar, Land Rover and Aston Martin. Ford also has a controlling stake in Japan`s Mazda Motor.
FordDirect, which will be run by an independent management team and owned jointly by the automaker and its dealers, is expected to be fully operational in California in September, with full implementation throughout the country next year.
Customers on the Web site will also be able to arrange a time to pick up the vehicle at dealerships. In some states, where franchise laws allow it, customers can have the car or truck delivered to their home or business.
"One of the things we have found is that people who buy online expect to have delivery within 30 days, max," said Art Spinella, vice president and general manager of market research firm CNW Marketing/Research. "It becomes a distribution issue more than an online or Internet issue."
Spinella said that about half of all car buyers refer to the Internet before they make a purchase, but only about 1.5% or 250,000 to 300,000 of the approximately 17 million light vehicles sold in the US each year are bought online.
Ford and General Motors are each racing to establish a major presence on the Internet and fend off some of the independent car-buying Internet sites.
Amazon.com announced earlier this week that it plans to offer cars and trucks along with books and CDs on its popular Web site.
Because of state dealer franchise laws, most Internet car-buying services refer the final sale to auto dealers, which they claim simply adds another layer of costs to the whole process. Spinella said consumers paid an average of 5.5% more when they purchased a vehicle online rather than through a dealer.
Unlike many of the independent car-buying sites, Ford and GM are partnering with their dealers. They say they can offer consumers the best and most accurate prices, and access to the automaker`s car and truck inventory, so they know exactly what models are available.
Ford has diversified its bets, taking a 25% stake in Microsoft`s online car-buying service CarPoint, which racks up about 6 million visits to its Web site every month.
Texas-based software developer Trilogy will provide the technology to run FordDirect.
Chris Porch, chief executive officer of Drive, Ford`s joint venture with Trilogy to run Web sites, said FordDirect is a step forward from Ford`s current car-buying site BuyerConnection through Ford.com. FordDirect offers more pricing information, including consumer incentives as well as inventory and financing information.
Earlier this month, GM said it was also considering a venture with its dealers.
However, GM said the proposed Web site, which it is referring to internally as Retail.com, would present unbiased information on all makes and models of cars and trucks.
GM officials believe the new site would thereby reach consumers who would not visit GM`s existing car-buying site, GMBuyPower.com.
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