GM Launches Online Ad Blitz

General Motors Corp. (NYSE: GM) is attempting to draw buyers to its dealers -- and away from Web-based car sellers -- with an online campaign featuring incentives and contests.

The site, called Ticket to Ride, offers incentives of up to $750 (US$) on each Buick, Cadillac, Chevrolet, Oldsmobile, Pontiac and GMC vehicle, as well as sweepstakes to win tickets to such events as the 2001 NCAA Final Four, the Olympic Winter Games in Salt Lake City, Utah, the summer games in Sydney, Australia, and the Country Music Association awards.

The company says the promotion will run through July 15th.

Dealers Fight for Position

Car dealers are fighting desperately to keep their piece of the car-buying action as online sites like CarsDirect and AutoWeb (Nasdaq: AWEB) gain in popularity. Forrester Research sees online car sales rising to $12.5 billion by 2003, while International Data Corp. projects $27.3 billion in sales by 2004.

Most Americans already use the Web as a research tool at some point in the car-buying process, according to J.D. Power and Associates.

The Los Angeles-based CarsDirect recently filed with securities regulators for an initial public offering to sell $175.2 million worth of stock at a price yet to be determined. The IPO would help raise cash to finance operations.

GM and other automakers have reportedly sent letters to their dealers warning them against selling vehicles directly to online sites like CarsDirect. They are encouraged to use Internet companies like Autobytel.com, which steer potential buyers from the Web to local dealerships for purchase.

Smaller Companies Angle for Space

As the competition heats up online, smaller companies are also trying to grab a share of the market. Alison Wagonfeld, vice president of marketing at Greenlight.com, says her company has found that consumers experience "tremendous dissatisfaction" with the traditional car-buying process, which involves haggling at the dealership and difficulty finding the best price.

Greenlight currently works with dealers in a few states -- though the company is expanding -- and arms customers with research on features and prices before handing them over to dealerships for test drives and final paperwork.

That way, says Wagonfeld, customers get the follow-up care and solid experience of dealing with a brick-and-mortar dealership without having to barter over prices and options.