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Car Dealers vs the Web: GM Shifts Toward Online Purchasing
cartechboy writes "Car dealers may be in for a new battle, and it turns out existing car manufacturers are joining the fun. Tesla Motors began the rebellion by trying to sell electric cars directly to buyers. Car dealers have fought that effort state-by-state and even complained to the DMV about Tesla's website. But things just got a little more interesting. General Motors announced plans to expand its new web-based shopping tool (aka a shopping web site) that allows customers to bypass showrooms when buying new cars. The idea is to use the Web as a giant test platform to see if the automaker can better target people who use the web to buy things. The catch is that the web app, called 'Shop-Click-Drive' will allow users to do almost everything they'd do at a dealer: customize the car, get pricing and financing and even arrange for delivery. But then when you push the button, your "purchase" will be routed to GM's network of 4,300 dealers, so you still have to visit a local dealer to sign on the dotted line. Even with this limitation, the move is still making dealers nervous. GM dealers aren't required to participate in the web-based test, and company officials say they have had some dealers turn it down."
I just bought a car after driving several. How would online options really help with determining what has good feel/performance for a customer. Some people like to feel the road others like a smooth ride. The terrible blutooth integration with my purchased car (though I dont think many cars support Google commands/Siri) makes me wish I played with it more at the dealership instead of just trying to make a call. Colors look different in daylight. Some plastics feel cheaper than others, the list goes on and on. You must have bought something online, opened the box and went "ugh I thought it looked different" So why would you want to put down so much on a car only seen online?
Even though you have to buy from a dealer, this new GM website means you get exactly the car you want with the extras you want at a price that is set before you even set foot on the dealer lot. No negotiating and no up-sell.
Which is exactly why some dealers dont like it.
I bought a new car recently. I try to keep my cars as long as possible, but the old one was causing me to wonder how long it would last without another expensive repair. That meant a trip to the dealership, knowing quite well that I was about to have the worst category of retail experience known. It doesn't matter if you are buying a cheap car or an expensive one - dealers treat all customers the same way. Haggle, make you wait while the sales person "I will try to get my manager to accept your price, but he is going to beat me up..." talks fantasy football with his manager as you wait. (If you are trading in a car, they will take your keys to look at your trade-in. You will not be getting them back any time soon, so be sure to bring an extra set of keys you can drive off the lot while they are playing this game to wear you down.) Make them wait while you enjoy a sandwich or read a book in the coffee shop across the street.
After you endure that nonsense, you get to talk tot he "finance manager" who will try to get you to by an insanely overpriced extended warranty contract. If that doesn't work for the dealership, they will be happy to offer you very high rate auto loan. Think of what is happening: The sales rep is telling you how great the car is while you are looking at it, then the finance person is telling you an extended warranty is really needed because the car will probably have a major repair after the warranty period is over. Be sure to ask the finance person if they think you should tell the sales person you will not be buying the car since he or she just told you it really isn't a very well made car.
Car dealerships are really parasitic IMHO. They use their intermediary status to extract as much as possible from customers, and in doing so alienate the customers from the manufacturers. The manufacturer spends a huge amount of money establishing a brand, designing cars they hope will appeal to the public, taking capital risk, and managing production. Think of the extended warranty pitch - it totally undermines the manufacturer since it implies the car really isn't very reliable. My previous car was a high end brand, but I detested the sales and service department at the local dealer so much I vowed to never buy another model of that brand, even though I really liked the car. But none of this is new to anyone who has purchased a car from a dealership, new or used.
Given the above, and manufacturers know all of it, I am surprised that Ford and Chrysler aren't jumping on the direct sales model, too. They probably will though; the dealership model makes far less sense now that consumers can learn more about a car online than most car sales people will ever know, since that is not what they care about. Before the internet, it was necessary to go to a dealership to look at a car, maybe get a brochure and see what the car actually looked like. Of course the buyer still has to test drive the car, but there is no reason manufacturers can't follow the Tesla model. This is a bit of a simplification, since Tesla cars in high demand and people are willing to wait for one. There is also a lot to be said for having inventory on a lot since it simplifies distribution and might help close a deal. But... I think every manufacturer would clamp down on the pathetic treatment of customers their dealers engage in if they were selling directly.
A friend of mine is thinking about buying a BMW M3, but I told him he should drive a Tesla first given that the two models are similar in price. The BMW might be a good car, but he dislikes the dealership experience as much as anyone. Why support the dealership business model if there is a choice? My thought is that my next car will be a Tesla not only because it is a great car, but also because I know my money won't support the jerks who run auto dealerships.
Given the intermediary advantage the dealer has when approached by a customer, it is no wonder they are fighting the direct sales model. They have a license to steal, and don't want to give it up. We hav
Imagine how much harder physics would be if electrons had feelings! -Feynman, maybe
So YOU are the one guy that bought it!
the last car i bought, 5 or 6 years ago, i considered a GM car. I had just gone through a great experience buying a honda for my wife, then GM came along to show me how miserable a shopping experience could be. There were a couple of options that made me want this car, but then I couldnt figure out how to get them. The salesman just wanted me to pick one off the lot, but they were over priced with options i didnt want, or didnt have what i came for. We looked at how to order the car, but the items all came in bundles... piles of bundles. One might have a sunroof, a certain radio, upgraded rims, and memory seat adjustments. of these I wanted the sunroof. Then you pick a different engine, and it changes the rims and radio and carpet, and you arent sure which set of overlapping choices would end up on the car. No one could figure that out. This happened for every option i wanted.
I then tried to configure on a website. again the options were a joke of complexity. At the end, I got to choose which dealership would contact me with a quote. I could choose 1, and only 1. I wanted to see what competing quotes might get me, but I had to start the entire order process over. This was going to take too much time, so I bought a Nissan.
The whole "wheeling and dealing" for a car price needs to go away.
Spelling and Grammar errors have been added to this post for your enjoyment
GM is functionally incompetent when it comes to the internet. Tesla is new, small, agile, and responsive to the market.
Well Tesla has, what, one model, with very few options available. More coming, sure, but today, its pick your color and battery size, and send a check.
With any of the other big manufacturers, the combinations are almost endless. Engines, transmissions, rear ends, tires, interior trim, exterior trim, across maybe 10 or 30 models. Its a whole level of scale. They have never been set up to do this on a massive scale. Even the dealers need hand holding when ordering cars. Dealers typically order from a pick list of pre-configured models, of what they think will sell in their area.
When you come kicking tires, if they can't find a car you want on their lot, they might check other dealers, but sooner or later you end up settling for something handy or going for a custom order. And custom orders aren't quick through any of the big dealers. It can take a couple months easily, and if you are near the end of a model year you are SOL. So most people settle for what's on the lot.
Tesla was set up from the beginning to custom build from a SMALL selection of models. Detroit was set up to pre-build bazillions of standard models with a very few custom orders.
Still you have to give them credit for trying. You can already "custom build" by picking package options from most manufacturers. (Not with anywhere near a desirable level of granularity.) But you are going to go through a dealer somewhere along the line.
Sig Battery depleted. Reverting to safe mode.
Heh, unless you work for a GM dealership, you have NO idea how bad GM is at IT. Their dealer-side website still does not officially support anything other than IE8. Business reporting relies on ActiveX integration with Excel, and only works properly with Excel 2000 and 2003. It can be made to work under 2007, but they don't support anything higher. Parts of the service-related workbenches still use VBScript. It used to be accessible only over a super-slow satellite link, but they changed that a few years ago, thank god.
To be fair, though, Toyota's web back-end, Dealer Daily, is even worse. IE-only, accessible only through a dedicated T1 which may not be used for anything else (but which you still pay full price for, of course). Blank page under anything other than IE.
Come to think of it, a lot of dealership stuff is locked on IE. Dealertrack (intentionally locks out non-IE browsers), Dealersocket CRM (featured-limited under non-IE browsers). ADP is the biggest supplier of dealership management software in the US and most of their stuff is entirely reliant on IE.
It's a pathetic state of affairs.
End of lesson. You may press the button.
Except that "under the age of 25" basically means the world hasn't kicked them in the balls yet, and biking around their urban area seems a pleasant way to pass the INFINITE amount of time they have left.