General Motors has proposed a partnership with its dealers valued at $50 million to boost its sales over the Internet.
The world`s No. 1 automaker said previously it was considering buying into an Internet auto sales company or starting its own that would offer cars from all automakers as a way to draw a wider swath of Web shoppers. In documents filed with the US Securities and Exchange Commission Friday, GM said it was forming a company called AutoCentric that would act as a go-between for GM, its dealers and whatever venture they eventually decide to form.
"Our objective is to define a new online business model to provide an enhanced online experience for GM customers in order to increase sales of GM vehicles," the filing said.
GM said it would offer to sell $25 million in AutoCentric shares, or half its declared value, to its 7,800 dealers and retain the rest for itself. The money raised would be used to buy an interest in an existing Internet company or start a new one and general business expenses, the company said.
While several studies have shown a majority of new-car shoppers in the United States turning to the Internet to research their purchase, less than 1 percent have actually bought online, according to Forrester Research, a firm specializing in Internet research.
Over the past year, new-car dealers in several states have successfully lobbied to strengthen franchise laws that hamper such sales. Several direct online sales firms, such as CarsDirect, have partnered with dealership chains as a way around such road blocks.
Automakers have made several stabs at trying to lure Internet shoppers, including GM`s own BuyPower site. But customers have consistently preferred to consult independent sites, which have long offered invoice pricing and more buying advice.
GM said by setting up an "independent" all-brands site, its dealers would have greater access to those shoppers. Dealers who took part could also commit to offer a specific Internet price for their vehicles.
GM spokesman Terry Sullivan said the company made the filing so it could discuss the proposal with dealers during the National Automobile Dealers Association convention in Las Vegas this weekend.
"It does not mean there is a company that is up and running," Sullivan said. "This is enabling us to take the concept and proposal to the next stage."
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