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GM Launches E-com Drive

General Motors Corp. Tuesday formed eGM, an independent business unit designed to leverage the business-to-business and business-to-consumer resources of its 100-plus global Web sites.

GM said the effort is aimed at offering the auto giant's customers real-time, interactive and customized capabilities.

Mark T. Hogan has been appointed group vice president of GM and will oversee the e-GM group, reporting to Ron Zarella, president of GM North America.

eGM plans to bundle the services of its sites which include offerings such as GM BuyPower, OnStar navigation system, GMAC's e-com services and GM Service Parts Operations. In addition, the unit will create new vehicle applications and services.

eGM has also been charged with the task of transitioning GM's traditional automotive operations into a global e-business enterprise. Under the plan, GM expects to improve upon customer service, efficiency and slash costs via eGM's integration of business development, strategic e-marketing, e-sales, e-product management and technology and operations units to one central unit.

"The Internet fundamentally changes the way business is conducted," said G. Richard Wagoner, Jr., president and chief operating officer of General Motors.

"GM has a strong e-based presence within our traditional business operations. "What we are doing today is combining these initiatives to ensure we will be a leader in electronic commerce by leveraging the Internet and our worldwide communications capabilities," Wagoner said.

Wagoner said Tuesday's announcement was the result of more than a year of research and development by in-house personnel in collaboration with consultants including Forrester Research.

George Colony, Forrester's president, CEO and chairman, touted GM's full-throttle e-commerce thrust, and dubbed the company's efforts, "The Manhattan Project of e-commerce."

Colony cited recent company statistics that indicate GM's launch is warranted, including projections that starting next year and lasting until the year 2009, the Internet will experience hypergrowth in the U.S. In 2003, estimated car sales derived directly from the Web will be 500,000, with 8 million car purchases resulting from Internet-aided research by consumers.

Colony said GM has four major challenges in its newest venture: harmonizing its channels, capturing online branding, creating an efficient back-end which could save the company 5-10 percent of car manufacturing costs and obtaining the commitments from executive leadership.

Zarella said GM dealers back the e-commerce plan, with as many as 75 percent of its dealerships connected to its BuyPower Web site.

"We are committed to partnering with our dealers as we build this new model moving forward," said Zarrella. "Many of our dealers are already moving into the Internet sales arena. Integrating our systems simplifies the shopping and buying process and allows for a seamless connection with our customers."

Scott McNealy, Chairman and CEO of Sun Microsystems said Sun has already developed demo cars featuring Internet browsers.

"I think automobiles are Java browsers with tires," McNealy said.

McNealy outlined a brave new world of cars and computers, contending that since studies show an average workday commute lasts 80 minutes, GM has the potential to capture a great deal of "eye-ball hours that would make NBC jealous." GM said it plans to test-market a browser-enabled car in the fall.

"The b-to-b and b-to-c opportunities are very big," McNealy said. "Web consumers want the instantaneous, to be spontaneous and are impulsive and want to be satisfied right now."

In McNealy's vision, future GM cars would be outfitted with a backseat Java browser, where drivers could conduct all their "nomadic," such as e-mail and voice-mail. Each GM customer would receive his/her own Web site with a car purchase, with the car's vehicle identification number acting as a URL. The URL would contain information such as oil change notifications, ability to schedule an appointment with a GM service center, etc.

"I no longer give my sales reps offices," McNealy said. "I give them a nice Cadillac. Automobiles should be a docking station for all your nomadics, such as a Palm or Nokia."

Marketing opportunities are also plentiful in the future, according to McNealy, who outlined a scenario in which Shell Oil or McDonalds had agreements with GM. Wherever a driver goes, he could punch up the locations of the five nearest Shell stations, or McDonalds, McNealy envisioned.

With such potential, GM may just be able to turn the auto e-com world on its head.



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