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General Motors Co. plans to expand a new online shopping tool that allows customers to bypass showrooms when buying new cars. The software, which keeps GM’s 4,300 dealers central to the sale of its vehicles, will provide a high-profile test of whether the auto maker can better cater to online-savvy consumers without running afoul of state franchise laws that give dealers exclusive rights to sell most new cars. By the end of this year, GM plans to extend a Web-based application, called Shop-Click-Drive, to its entire dealer network.
The app would let new-car buyers use their computer screen to lock in the price of a new car, get an estimate of the trade-in value of their old car, apply for financing and even arrange a test drive or delivery of their new vehicle. GM dealers aren’t required to participate in the project, and GM officials say they have had some dealers turn it down. One potential sticking point is that the auto maker for several years has pressured dealers to undertake costly makeovers of their stores—investments that could be undermined if more shoppers buy online. About 100 other dealers have signed up so far through a pilot launched in January in Michigan, Minnesota, Wisconsin and Arizona.
GM says the program isn’t intended to replace dealers or their showrooms, but rather to give its dealers a way to reach a growing group of customers, many of them young and tech-savvy, who prefer to complete transactions online and skip the showroom ritual. Of the 900 cars sold so far through the Shop-Click-Drive program, only five have been delivered directly to customers. The vast majority of buyers chose to pick up their new purchases at a showroom.
Source: The Wall Street Journal