Thank you Phil [Brady] and good afternoon ladies and gentlemen.
It's great to have the opportunity to speak with you today about the many "e" initiatives GM has planned with its dealers.
Wayne Gretzky once said, "I skate to where the puck is going to be, not where it's been."
Well, today I'd like to spend a couple minutes talking about where I think the internet is "going to be" over the next couple of years, and how GM and its dealers are going to win in the game of attracting customers and selling vehicles via the web.
We have a lot to cover so let's start off with a quick overview of what the internet landscape looks like today.
In spite of the dot-com bust, the web still plays an important role in the automotive industry: Customer usage continues to grow. In fact, over 60% of customers use the web for research before actually buying a car or truck. That number is expected to grow to 75% two years from now, representing over 11 million new vehicle sales.
And these customers aren't just "fooling around" on the internet. Our experience shows that of those customers who use GMBuyPower and then contact a dealer, 2/3's of them actually purchase a vehicle within fourteen days. That's a pretty revealing statistic about the growing importance of the web in our industry.
But it's not just consumers who are using the web more than ever. Dealer web presence is growing as well. In today's digital economy, customers expect dealerships to be just as accessible online as offline. Dealers are responding to that demand with over 90% of them now having some form of a web presence.
All of this is good news for dealers, customers and GM. But there are some challenges that come with this. Today, we all know that customers using the Internet are better informed and have higher expectations when it comes to buying a new vehicle:
They want information from the dealer now, not tomorrow. And they expect to have this information at their fingertips.
They want more value from their purchase. This is not just about getting the lowest price. Whether online or offline, it's about the quality of the retail experience, and how the customer is handled.
Today, possibly more than ever, the customer is in the driver's seat.
No where is this trend more evident than in Brazil, where the Chevrolet Celta has proven that when given the opportunity, consumers will choose the internet. Since launch in September of 2000, 112,000 Celta's have been sold. 78,000 of those vehicles were sold online. That's almost 70% of all sales online!!!
And customers aren't the only ones who love the Celta sales model -- dealers want more as well. The best testimony to dealer acceptance is that over 90% of online Celta transactions are completed at dealership kiosks. Consequently, the dealer has the ability to switch the customer to a traditional sale in a number of ways if they really wanted to. However, what we see is the opposite...online sales are increasing as a percent of total Celta sales. There has been plenty of talk among dealers in Brazil about extending this online model to a number of other GM models.
The Celta program has taught us how to use technology to create a better retail experience, and the learnings from Celta could be applied worldwide.
GM's vision for working with dealers on the internet hasn't changed...it's the same vision we started with when e-GM was formed in 1999; and it's the same vision that is directing our future plans.
Our vision is based on the understanding that the web is not about "web pages"; it's about effectively connecting the online consumer with the dealership network. This means providing the technology, web-based tools, and interactive (or internet) marketing and sales strategies to help our dealers.
It's about making it easy for our dealers to do business with GM. This, in turn, will make it easier and more enjoyable for our customers to shop for a GM vehicle, buy one from our dealers, and become a customer for life.
So what progress has been made? I'd like to spend the next couple of minutes walking you through some of the building blocks we've put in place to turn our vision into reality.
The first block, and in fact, the cornerstone of our strategy is GM BuyPower. BuyPower's robust suite of shopping and buying tools is the bridge that connects GM brands with GM dealers, providing a seamless, integrated experience for the customer.
Since its introduction, the response from our dealers has been substantial:
70% of our dealers are now active on GM BuyPower
Of those dealers, over 90% are receiving leads - up from 50% just a year ago.
Over the past six months, leads to dealers have increased more than 300%! We are currently averaging over 70,000 leads per month!!! Some of this increase is due to the recent zero percent financing offer, but most of it can be credited to the continuously improving customer experience provided by GM BuyPower's shopping and buying tools, such as the new messaging system, making it easier for customers to send messages to dealers.
And we expect this volume to grow even more with the new applications and programs planned for '02. We'll talk more about those exciting initiatives in just a moment.
GM BuyPower brings more than leads to the dealer. The presence of a GM BuyPower Manager in the dealership has been a big plus for dealers in helping to turn leads into sales. The GM BuyPower manager adds the "human touch" that customers need to finalize their purchase decision.
The importance of this human touch is evident in some compelling statistics:
With the GM BuyPower service, customers receive responses to their online dealer inquiries 90% of the time, compared to the industry average of just 42%.
When a GM BuyPower Manager is involved, the closing rate at the dealership is almost 30% higher than without one.
As a result...
JD Power reports that GM BuyPower has the highest closing rate for new vehicle sales across all manufacturer and third party automotive sites!
And that GMBuyPower is now the leading OEM net buying service in online sales!
It's clear that our strategy is paying dividends for our dealers. Each year the numbers get better and better. In 2001, 550,000 vehicle sales can be attributed to GM BuyPower, up from 400,000 the year before.
While I've been talking about the U.S. version of GM BuyPower, the website is international in scope. We've rolled "BuyPower" out to 40 countries around the world, covering 3.5 billion of the world's total 6 billion population. Right now, BuyPower is in every global market where GM does business!
GM BuyPower has helped GM to attract new customers, but an area where we need improvement is in retaining the ones we already have. Thanks to the internet, GM is now at the forefront of maintaining owner loyalty with a new website called Owner Center at MyGMLink.com.
The Owner Center concept was born from a simple consumer need...GM vehicle owners wanted a comprehensive online resource to enhance their ownership experience.
MyGMLink.com provides owners with all of the information they need to know about their vehicle. It also provides the ability to track their maintenance history, get service reminders, and locate nearby dealerships for ongoing care of their vehicle. Last but not least, it provides exclusive access to offers and other privileges that come with owning a GM vehicle.
Here's a short clip highlighting some of the key features of MyGMLink.com.
Currently, MyGMLink.com is operational for Pontiac and some select Chevrolet models. The initial results are very promising and we expect to roll out these tools to all GM divisions later this year.
In addition to these customer-facing initiatives, we've also been using the web to simplify the dealer's ability to connect with GM. We've created the DealerWorld portal to provide a single point of contact between dealers and GM. Through last year, we've incorporated 31 different applications into DealerWorld, with more scheduled this year -- all based on substantial dealer input.
Our ultimate goal is to provide GM dealers with a one-stop point of access for all of their GM business applications...spending less time on administrative activities and more time selling vehicles.
Just providing the online tools is not enough. Recognizing that we need to help our dealers take full advantage of the rapid developments in eCommerce and Internet technology, we launched a nation-wide training program. The "eBoot Camp" training program was designed originally only for our wholesale team, but the positive response was so strong that we rolled out the program to dealers as well. Over 1200 wholesale staff attended the training together with more than 370 dealers.
To make sure that we continue to listen to our dealers' needs and concerns, we've set up the eDealer Advisory Board. Our sponsorship of and participation in this board is another example of our ongoing commitment to using the web to help our dealers succeed.
We've been working side-by-side with our dealers on initiatives to pilot new programs like Retail.com and dealer web sites. The learning from these joint efforts is helping to focus our future strategies for maximizing leads to our dealers.
But that's only the beginning of the story. There's more to come over the next year. We are taking our vision to the next level and there are some important things you'll be seeing from us as we do this.
One of the first major efforts is to integrate GM BuyPower services into the GM divisional sites. This is a critical step towards leveraging the almost 4 million visits our Brand sites receive monthly -- providing a seamless, integrated experience for the customer, starting with the Brand and ending directly at the dealership.
We will continue to increase the volume of qualified leads flowing to our dealers through some important initiatives:
The first is an innovative strategy working with 3rd party web sites to drive incremental sales through GM BuyPower. The key benefits to dealers will be:
A second important initiative is to help dealers launch their own online presence.
This initiative will provide a consistent consumer message- off-line and on-line
And it will delivers customers directly to participating dealers
When you look at the building blocks we've put in place and the exciting plans for 2002, it's clear that GM is working very hard to fulfill the vision we put in place two years ago. The benefits of these efforts to our dealers is equally clear:
Increased leads and increased sales
Better communications between dealers and GM
And increased customer satisfaction that will generate greater loyalty to dealers and to GM brands
When I think about the work we are doing with dealers on the internet, I am reminded of a story told about a French Marshall named Louis Hubert Lyautey (pronounced lyota'). Marshall Lyautey once asked his gardener to plant a tree. But the gardener objected, arguing that the tree would take over 100 years to reach full maturity.
The Marshall replied, "Then we have no time to lose. Plant it this afternoon."
Over the past two years I've heard everything from, "The internet will change the world," to "It's all a waste of time." Who's right? I know one thing for certain...the work we are doing today to build up our online retail initiatives will pay big dividends in the future.
The internet has become more and more important in terms of our ability to succeed in this fast changing and unpredictable world.
But we have to maintain perspective. For GM and its dealers, the internet is not an invitation to tear down our traditional way of doing business...it's an opportunity to improve what we already do - and that's build, market and sell the best automotive products and services in the world.