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eGM is producing for the company, says Mark Hogan GM is focusing on e-commerce results, now that the (4/23/2001)

Saying that “the Gold Rush is over” in automotive e-business, Mark Hogan emphasized that results rather than new initiatives are now the sign of success for automakers. GM is focusing on e-commerce results, now that the "gold rush" for position is over, says Mark Hogan. “Results -- you don’t often hear about that at e-commerce or Internet conferences,” said Hogan, president of e-GM and group vice president of General Motors.

But GM is already tabulating results from its varied e-offerings, especially GM BuyPower, and over the past two years the company estimates it has gained $8 billion in additional revenue from BuyPower alone, Hogan told an audience at the e-AutoWorld conference held in Detroit April 10.

The company believes some 860,000 sales were “influenced” by BuyPower, with 64,000 of them classed as “conquests” in which a car buyer considering another automaker’s product switched to a GM brand. Hogan said the BuyPower site receives 2,200 visits an hour, with 700 visitors using the service to estimate payments on a new car and another 700 printing off window stickers. Dealers receive online communications from about 125 of the visitors each hour; about 1,000 dealer leads come from the site each day.

In addition, GM has sold some 25,000 vehicles directly to customers using the Internet in Brazil, the United Kingdom and Taiwan.

Hogan said new car sales are far from the only e-business success for GM. The company’s lending arm has closed more than 20,300 loans online.

General Motors Acceptance Corporation has sold close to 80,000 off-lease vehicles online at an average savings of nearly $500 per vehicle, or a total of almost $40 million, compared to traditional off-lease selling methods. The “SmartAuction” program, in place for 14 months, has cut 45 days from the disposal time for off-lease vehicles. GM expects to auction 120,000 cars and trucks using the program this year.

The e-GM leader was quick to admit that economic uncertainty and the bursting of the dot-com market bubble has chilled some thinking about e-business. In the aftermath, people have pointed to the hype and wrong predictions that companies including GM created about the future of e-commerce.

“Does this mean e-business is out of business? Absolutely not,” said Hogan.

Instead, he said, auto companies including GM must concentrate on real internal improvements that can be made by innovative use of the Internet and e-business tools that came into being over the past two years or more.

Referring to e-GM’s philosophy as “launch and learn,” Hogan said GM believes it must put leading initiatives into the marketplace to stake out its space first, then correct the initiatives to deal with unanticipated challenges or unexpected consequences.

“We won’t get our e-business initiatives 100 percent right the first time,” Hogan said.

An example may be BuyPower itself, which was launched in March, 1999, from a California pilot project developed in 1997. BuyPower’s lead generation success is still based entirely on relatively primitive telephone and FAX follow-up work to get dealers in touch with potential customers. The early site used so-called “hard” coding in its architecture. That has meant that any change to the site – such as adding email links to customer prospects for dealers – requires a rebuild of the entire application.

Hogan said that is changing with introduction of a new J2EE architecture, which will allow bolt-on site updates without affecting BuyPower’s core programming, but it’s an example of the unintended consequences of rapid innovation.

For the near future, GM expects to push its BuyPower initiative into 40 countries by the end of this year, eventually intending BuyPower to form the bridge to a build-to-order system.

But GM also plans a 90 day pilot project with Autobytel to open an all makes/all models portal for buyers who don’t necessarily want a GM car.

Hogan said GM will continue selling direct to consumers in Taiwan, and has extended its current European e-price model used by Vauxhall to the company’s Adam Opel customers in Germany.