General Motors plans a 90-day pilot with Autobytel.com that could serve as the model for a joint-venture car-buying site with dealers.
The test will involve sales of a single GM brand in a single metropolitan market, the automaker said last week. Neither GM nor Autobytel.com would disclose the brand, market or cost of the test, which begins May 1.
But GM has been planning a joint-venture Web site with its dealers since last summer and at the National Automobile Dealers Association convention earlier this month gave it a name: AutoCentric LLC.
By partnering with Autobytel.com, GM may avoid some of the legal pitfalls other Web sites have faced, such as state statutes that ban auto brokering. If the pilot is successful, Autobytel's site may become the platform for running AutoCentric and GM may take an equity interest in Autobytel.com, which would refine its business model.
In a filing with the Securities and Exchange Commission, GM said AutoCentric either will be run by a third-party Internet service in which GM has a minority stake or will be started from scratch by GM and its dealers.
'We are doing this because consumers prefer a site offering all makes and models three to one,' said Mike Devereux, director of business development for E-GM, GM's Internet division.
Customers who want to buy GM vehicles will be able to search participating dealers' new-vehicle inventories for a specific car and get a price quote from a dealer they choose. Throughout the process there will be no evidence of GM's involvement in the transaction.
Dealers will call the shots on retail prices. They can choose to list a vehicle without a price, list it with a special 'e-price' or not list the vehicle at all.
Because GM dealers will set their own prices, they avoid state laws that ban factory involvement in retail pricing, prevent factories from setting price ceilings and prohibit price-fixing by factories and dealers.
The GM venture also avoids state bans on brokering, which have quashed some online auto brokers. Autobytel.com's site refers customers to dealers; it does not broker the sale.
'I had a call from the GM folks on how to comply with Virginia law,' said Mike Charapp, a Washington dealer attorney. 'They don't want to get derailed by some legal challenge.'
GM has filed a registration statement with the SEC to raise $25 million through a private stock offering to dealers. GM will invest another $25 million in the venture, the document says.
The project has at least one dissenter. Dan Myers, a Tallahassee, Fla., dealer attorney, is suspicious of GM's desire to launch a joint venture with dealers and its potential to own a stake in Autobytel.com. Myers believes the joint venture still could run into trouble in states that restrict factory ownership of retail operations.