GM, Autobytel to test online car sales

General Motors Corp. and online car buying Web site Inc. yesterday announced they're teaming up to run a 90-day test of a new service aimed at enabling car shoppers to buy vehicles from specific dealers via the Web.

The agreement between the two companies follows GM's disclosure earlier this month that it was seeking an online venue that would let customers shop for multiple makes and models of cars. At that time, GM said in a filing with the U.S. Securities and Exchange Commission (SEC) that it would either buy an existing Web site or start one of its own (see story).

The deal with Irvine, Calif.-based hews to "the same locate-to-order business model as we [outlined] in our SEC filing," said Mike Devereux, director of business development at the automaker's e-GM unit, which handles its online offerings. Devereux said the test with Autobytel, set to start May 1, will help GM decide how to proceed with the development of its proposed AutoCentric JV LLC venture.

During the test, car shoppers who log on to Autobytel's Web site will be able to search for a specific GM vehicle that they could buy from dealers in a yet-to-be-identified metropolitan area. According to Devereux, a "no-haggle" online price would be set by individual dealers and posted on the Autobytel site, cutting out the usual bargaining over the cost of cars.

The GM car division that will be involved in the test and the city where it will be offered are due to be disclosed shortly, Devereux said. Yesterday's announcement said the test with Autobytel is expected to help GM and its dealers "learn how to ultimately create an effective online locate-to-order system that displays a market area view of available [car] inventory" and lets dealers set their own online prices.

GM's plan to set up that kind of system could be good for consumers, said Hiro Mori, an analyst at Automotive Consulting Group Inc. in Ann Arbor, Mich. But Mori added that getting auto dealers to buy into the idea may not be easy, partly because a locate-to-order system could require a standardization of inventory-tracking software. Dealers have resisted attempts to standardize such technology in the past, he said.

In addition, GM and other automakers historically "haven't had very cooperative relationships with the dealers" that sell their cars, Mori said. The automakers typically "come up with a great idea and then tell [dealers] that this is the way it's going to be," he said. But in this case, according to Mori, the locate-to-order plan may be "something dealers will have to live with in the long run because [the way people buy cars] is changing."

Jennifer DiSabatino contributed to this report.

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