GM, Ford fight back at Web car dealers

General Motors Corp. and Ford Motor Co. said that they have told dealers not to sell vehicles to online direct car sellers such as CarOrder.

General Motors Corp. and Ford Motor Co. said that they have told dealers not to sell vehicles to online direct car sellers such as CarOrder.com and CarsDirect.com.

22 May 2000 - The North American division of German-U.S. DaimlerChrysler AG, the other member of the traditional Big Three U.S. auto makers, did not send such a notification to its dealers, but plans to send a similar one in the next week or two, company spokesman Dominick Infante said.

"We are of a similar mind as GM and Ford on this topic," he said.

The Big Three, which accounts for more than two-thirds of all U.S. vehicle sales, said selling vehicles to vehicle brokers who bypass dealerships violates long-standing franchise agreements.

Not all car sites created equal
Other vehicle-selling Web sites such as Autobytel.com Inc. generate sales leads by sending prospective customers into dealerships. But CarsDirect.com and CarOrder.com skip dealerships entirely.

"I haven't seen anybody able to service a vehicle online yet,"said Ford's Ann Doyle. GM spokeswoman Rebecca Harris said companies like CarsDirect.com, which is preparing for an initial public offering, and CarOrder.com fail to provide any after-purchase service for their vehicles.

"Our retailers are our way to get products to our consumers," Harris said. "They can provide service; they can provide sales consultants; they can provide all the things an online company can't provide."

With vehicle prices under pressure because of heavy competition and the ready availability of prices on the Internet, many analysts believe dealerships will have to increase after-market services in order to survive.

"I haven't seen anybody able to service a vehicle online yet," said Ford spokeswoman Ann Doyle.

GM sent letters out on Monday, Harris said. Ford notified its dealers in mid-April.

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