What if ordering a Buick were more like ordering a laptop computer from Dell Inc. (NASDAQ:DELL)? You might like it. The new General Motors Co. might learn to like it too.
But for car dealers, who have the most to lose in any transition, it's a troubling thought. Like real estate brokers, the dealers have an ambivalent relationship with the Internet. They need a presence on it. It's great for marketing and lead generation. But they fear its potential to compress margins and commoditize the products they sell. A less personal sale may also be a missed opportunity to lay the groundwork for a profitable service relationship.
And yet, more and more consumers want to shop and even buy on the Web. So if part of your mission is market share, as is the case for GM, what do you do?
You come up with a deal like the one GM announced with online auction company eBay Inc. (NSADAQ:EBAY) on Monday. It's done at the dealer level -- specifically, 225 dealers in California, where GM especially needs to regain share. According to press reports, it's structured in a way to keep dealers from competing with each other on price.
And as GM vice president for sales Mark LaNeve said in a call with reporters on Monday, dealers elsewhere needn't fear having such a program imposed on them. According to Automotive News, LaNeve says GM officials will conduct a 10-city tour over the next
six or seven weeks
visiting GM dealers and providing them with updates
about the program. "We would roll it out upon dealer
request, but we're not going to put it in any market where the dealers
are uncomfortable or don't feel that they're ready for it," LaNeve said.
But if the practice works out in California, dealers elsewhere would probably be wise to get ready for it. As GM's shutdown of 1,100 dealers while it was in bankruptcy showed, this is a transformational time in the business. With old models discredited, the trick is to find new models that work.
And the news isn't all bad. Even in the much simpler, hypercompetitive PC business, the pendulum has swung back toward retail and customer service in recent years. Maybe the automakers and their dealers can find a new balance as well. -
Kenneth Klee
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Juergen Lasowski
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I wonder if those personal relationships are a thing of the past. My Senior Mother and I have this discussion regularly. She doesn't want to bank online. She wants to go in and meet the banker. She doesn't want to deposit a check at an ATM she wants a human to process it. She wants to go in and have a relationship with the salesperson at the clothing store.
I on the other hand don't want the emotional baggage that comes with that relationship. I want to know I am getting the deal I want and not feel like I might be paying more because I'd hurt my friend the salesman's feelings if I asked for a better price.
Times ARE changing. They HAVE already changed. It's about time that car companies jumped on board!