General Motors will not grant a franchise to an online broker, said Mark Hogan, president of e-GM, the automaker's e-commerce business unit.
'We are committed to our dealers,' Hogan said, as he spoke to the National Association of Motor Vehicle Boards and Commissions at a meeting held in conjunction with the NADA convention.
GM's decision suggests that dot-com companies will have a tough time buying dealerships. Some well-capitalized online auto brokers are trying to sell new vehicles direct to consumers. To do that, they need to have a franchise.
But under dealer franchise agreements, a franchise cannot be transferred from one dealer to another without factory approval.
Still, some dot-com companies might be able to buy GM dealerships despite GM's objections. 'Franchise laws don't always allow us to veto acquisitions,' Hogan said.
Hogan said GM has big plans for GM BuyPower, an online buying service that competes with independent Internet brokers. GM plans to increase traffic on GM BuyPower from 4 million visitors last year to an annual rate of 50 million by year end.
He expects the increase to come from marketing alliances with high-traffic Web sites, similar to the deals GM recently reached with America Online and NetZero.