E-GM Getting Lukewarm Reviews

FRAMINGHAM (08/04/2000) - E-GM, the General Motors Corp. business unit that's charged with driving Internet initiatives within the automotive giant, recounted a year's worth of progress at a press conference this week. But analysts gave the unit low scores on efforts to improve consumers' online purchasing experiences and to rev up Web-based vehicles sales.

Since its launch last August, the 150-person division has boosted traffic at GM's consumer Web site, GMBuyPower.com, from 200,000 visitors in March to 1.2 million monthly visitors now, said Mark Hogan, e-GM's president. Meanwhile, the number of inventory searches conducted on the site and the number of consumer-to-dealer messages have jumped 130% and 85%, respectively, since April, he said.

Hogan said efforts by e-GM have improved its vehicle sales. For example, 27,000 sales made in the past year resulted from leads that were generated through GMBuyPower, said Hogan. Of that number, 20,000 were designated "conquest" sales, or sales from consumers who owned or were interested in vehicles from other makers.

But analysts said the sales results demonstrated e-GM's slow progress and cautioned the automaker to involve its 7,700 dealers more closely.

"Frankly, that number seems small given the size of GM," said Dan Garretson, an analyst at Forrester Research Inc. in Cambridge, Mass. "GM needs to work with its dealers to facilitate more sales."

Robert DeSisto, an analyst at Gartner Group Inc. in Stamford, Conn., also said more work needs to be done with dealers.

"One thing that e-GM has not addressed - the key thing - is how it will help reinvent the business model with dealers," he said. "Dealers cannot get rid of the fact that people can [now] get access to dealer invoices online, so margins are getting squeezed."

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