Ford, GM to join Web giants and drive toward on-line sales
January 7, 2000
[There was an article in my local paper in Connecticut about car salesmen at dealerships starting to organize against the prospect of car companies cutting out the middle man. I will try to have the text emailed to me so I can post it. In the meantime we found this article on the subject. It could mean selling EVs and HEVs online, just like any other home electronic appliance, will actualize the prophetic commercial where the EV-1 is surrounded by toasters and microwave ovens!!! Remy C. ET Ed.]
GETTING IN step with retailing's hottest trend, Detroit's Big Two automakers are joining forces with two of cyberspace's top Web sites.

For Ford Motor Co. and General Motors Corp., successful alliances with heavyweight Internet portals may well hasten the day when they can sell vehicles directly to customers over the Internet.

Ford has concluded an agreement with Yahoo Inc. to supply automotive information on an exclusive basis, while GM is about to enter into a similar alliance with America Online Inc. Yahoo and AOL will realize millions of dollars in advertising revenue from the automakers.

If the theme of computing last year was Y2K, this year it's B2C, the abbreviation marketers increasingly use to describe "business to consumer" relationships via the Net.

Visitors to Yahoo and AOL presumably will be able to customize preferences that will tell them when their Ford or GM vehicle needs servicing, how much money is still owed on a loan, technical advice, the names of nearby dealers and a host of other facts pertinent to owners.

None of the parties is willing to speak officially yet about the pacts, but unofficially GM has confirmed that reports about its alliance are true. Ford remains mum. Hoping to make a big splash, the automakers will provide details next week when several thousand members of the media worldwide descend on Detroit for the North American International Auto Show.

But Ford already has scheduled a high-level celebratory dinner for Ford and Yahoo executives Sunday night at Fair Lane, Henry Ford's mansion in Dearborn.

DaimlerChrysler has decided to remain silent about its future on the Internet. Executives who frequent e-commerce conferences and seminars say they rarely see counterparts from DaimlerChrysler or hear speeches from DaimlerChrysler executives describing strategic objectives.

Alliances between Internet shopping portals and consumer companies had become all the rage, as consumers increasingly demonstrated they were willing to buy on-line. The growth of e-commerce also is a key factor behind the run-up in the prices of Internet stocks. In mid-December, Kmart Corp. and Yahoo joined forces to create, which will offer free Internet access and the opportunity to order merchandise from Kmart.

The automakers already have built hundreds of Web sites for distributing information to customers, owners and others, but no automotive manufacturer has yet proved it can solve the puzzle of how the Internet can be used to sell.

GM, in addition to its imminent pact with America Online, is negotiating agreements with, an Internet portal owned by Walt Disney Corp., with Kelley Blue Book, an on-line supplier of automotive pricing information, and with others.

Though Ford and GM haven't publicized the precise terms of their agreements, it's likely that they will be buying preferred placement and capabilities on Yahoo and AOL. The payments from the automakers to the Web sites will entitle them to advertising as well.

Car owners can benefit
In addition to basic customer services, in the next year or so, the automakers say they will be able to offer satellite links with vehicles that will offer voice-activated Internet connections as a feature. A driver could, for example, order music for the car from a laptop or desktop computer and then listen to it later while driving.

"My perspective on these alliances is that Americans spend 700 million hours a week in their cars," said Steve Girsky, automotive analyst for Morgan Stanley. "There won't be anything you won't be able to get in your home -- from streaming video to music to shopping -- that you won't also be able to get in your car."

Visitors to the sites who are shopping for new vehicles would be "funneled" -- it's the buzzword these days in Internet marketing -- to a GM or Ford site. An AOL visitor, for example, will quickly be funneled to, which can quickly locate the nearest dealer who has a vehicle on hand with features the customer wants.

In October, Yahoo said that it had 33.6 million hits at its site, more than any other site on the Internet.

For the moment, customers for GM and Ford vehicles may receive only information about vehicles, finance and delivery over the Internet. If they decide to buy, they must make an agreement with a franchised dealer, though their identity may be sent to a dealer in that customer's vicinity.

Net as selling tool
Eventually, Ford and GM hope to be able to sell directly on-line. Many traditional buyers will always go to dealerships, but younger customers especially are accustomed to point-and-click purchasing.

The main obstacle is opposition from most dealers, who have invested heavily in real estate and buildings. Franchise agreements and state franchise laws protect the dealers from circumvention by the manufacturers.

So far, the dealers are cautious. But the automakers are betting that impressive growth of customer traffic and orders through big Web sites will help them persuade dealers to collaborate on some Internet strategy.

"The customers are going to the Net whether we want them to go there or not," one automotive executive said. "We have to be there; we have to give them what they want."

GM has formed a dealer advisory council on e-commerce issues, from which the automaker hopes to develop a consensus that will permit direct sales over the Internet.

If the Israelis and the Syrians can sit down and discuss peace, dealers and automakers certainly can find a way to mutually benefit from the information revolution. The dealers could probably earn a commission from each Internet sale; they could have first crack at buying a used vehicle, as well as the opportunity to create a long-term service relationship.
DORON LEVIN can be reached at 313-223-4390 or