E-BUSINESS
GM Proves E-Business Matters
OnStar. GM's satellite-based service cantrack vehicles and unlock car doors from outerspace. Launched in 1996, OnStar was put under the eGMumbrella and now has 2 million subscribers, although it isnot yet profitable, according to published reports. The costto subscribers ranges from $17 to $70 per month, dependingon the level of service. On a practical note, OnStarprovides GM with something OEMs have never had: frequentcontact with customers. GM hopes that will prove to be aplatform for delivering more services, as it already has inthe case of location-based weather and traffic updates,which were added based on user feedback.
The GM Owner Center. Launched in January2002, this free online service stores maintenance recordsand manuals for current GM owners, and also provides servicereminders and vehicle-value-estimation tools. The site had14,000 registered members one week after the officiallaunch, which covered only certain GM models. Support forother GM brands is being rolled out in the first half of2002.
DealerWorld. This online portal includesapplications such as the just-launched VIN (vehicle IDnumber) Lookup, which allows dealers to simplify theformerly cumbersome process of determining what incentives abuyer qualifies for on a given model. GM also recentlyrolled out a package of services and tools that includestemplates for the dealers' own websites, which provide aconsistent look-and-feel and reduce dealers' burden of sitemaintenance.
GMAC SmartAuction. This Web-basedsystem allows all GM dealers to bid for leased vehicles thatwere returned to the dealer and are now owned by GMAC. Thisprocess is cheaper and faster than live auctions (shaving 30to 45 days off the normal selling time) and also reduces thelikelihood of damage to autos because transportation to anactual auction site is eliminated. GM has sold more than188,000 cars that way since launching SmartAuction in early2000.
For Suppliers: Streamlined purchases, faster productdesigns
Covisint. This purchasing exchange, formed by the troika ofDaimlerChrysler, Ford and GM, is the most-publicized of GM's links toits suppliers - but it is likely not the most valuable one. GM reportsthat it has conducted more than 600 auctions on the site thus far. In2001, the company did roughly $100 billion in auctions on the site,achieving a reduction of 3 percent in its per-transaction costs forthose deals, according to published reports. Because GM's majorcompetitors also use the site, it's natural to assume that Covisintis, competitively, a wash. That's not necessarily the case, says KevinProuty, research director of AMR Research in Boston, whose clientsinclude the three major OEMs. Prouty says Covisint may provide anadvantage to whichever OEMs use it correctly.