Perhaps as early as this month, Japanese consumers will be able to read about General Motors vehicles, arrange a test drive, negotiate prices from dealers and even apply for financing, all over the Internet.
It is part of a plan to expand GMBuyPower.com to 40 countries by 2002.
'Drivers will be in control of the car-buying experience,' says Yasuo Maruta, a senior manager of marketing for e-GM Japan.
The car-selling site already is valuable for sales and marketing in the United States. In addition to content, it allows consumers to configure vehicles and communicate with more than 6,500 dealers. More than 1,000 daily e-mails are received by dealers through the U.S. site; there are 2,200 dealer inventory searches each hour, says Terry Johnsson, regional director of e-GM Asia Pacific.
GM launched the site in China in April.
'We were stunned by the explosion of online use there,' Johnsson says. 'China has seen a tremendous growth (in Internet usage) with more than 20 million users. Around 40 percent of our car customers (in China) use the Internet to get shopping information.'
GM says it is successful with online transactions in Taiwan and South Korea. GM BuyPower started operations in both countries in 1999. 'Taiwan is a unique market because consumers can buy cars directly online,' Johnsson says. GM sells 250 to 300 vehicles online per month. In Korea, a smaller market, GM sells 40 cars online each month. In each case, that's about 10 percent of GM's total sales.
In Japan, where automakers sell 6 million vehicles annually. GM has a 17 percent share of the Japanese market if one includes the sales of Isuzu Motors Ltd., Suzuki Motor Corp. and Fuji Heavy Industries Ltd. (Subaru).
Johnsson says GM designs each BuyPower site to meet the cultural preferences of that country. In Japan, where consumers use the Internet but prefer the personal relationship of a dealer, there will be a wide range of information and opportunities for contact. 'It's imperative in Japan that the dealers are completely involved all along the way,' Johnsson says.
GM sees BuyPower in Japan as an opportunity to appeal to people of all ages. More than 47 million Japanese - about 37 percent of the population - use the Internet.
BuyPower started in 1999 when Mark Hogan, head of the e-GM Internet business division, integrated GM's global Internet activities into a competitive e-business model.
'In addition to connecting better with existing customers, we hope to leverage BuyPower to reach people who don't shop us,' Hogan says. 'For example, we don't get our fair share of the 20-something market, and while part of that may be product-driven, it's also due to our ability to link with them properly. They don't go to traditional media sources. We've noticed that 40 percent of prospective buyers go to the Internet for some sort of information before they make their purchase.'
Johnsson says GM 'doesn't view BuyPower as increasing sales, but for customer access to information online.'
Noriyuki Matsushima says it probably will be some time before such Internet efforts significantly increase profits. Matsushima is director of equity research for Nikko Salomon Smith Barney.
'Having said this, it is certainly better to be undertaking such experiments than not doing anything at all - you won't know if you don't try,' he says.
Tatsuo Yoshida, an analyst for Deutsche Securities Ltd., says: 'BuyPower is a perfect tool to collect information. But for consumers who want to compare prices, this is not going to happen. That's because the manufacturer will want to control the price.'
The Japanese do not like to give their names and addresses over the Internet, says Yoshida. They prefer to shop at the local dealership and meet the salespeople. 'It's a huge involvement for consumers,' he explains. 'They want to feel, touch the car and consult with the salespeople when purchasing the vehicle.'
Although the online car-buying model in Japan is in the early stages, it could become an important step in meeting needs of consumers. Kentaro Suzuki, a 37-year-old consumer, is enthusiastic about the prospect of buying a car over the Web.
'I want to be able to get information from the Web before I make my final purchase,' Suzuki says. 'I want to know what colors are available, options, fleet price and the suggested retail price. I want to know everything without the car salesman interrupting me or influencing my decision. It's fair trade for the consumer, and that's the way it should be.'
E-mail writer Catherine Makino at [email protected]