GM revs up discounts with promotional site

The site, GM Ticket To Ride, will offer incentives from $200 to $1,000 on some vehicles through July 15. GM partners America Online and NetZero will feature banner ads to promote the GM site, which will also be advertised in national magazines, newspapers and on television beginning Sunday.

Like many automakers, GM has struggled to streamline its relatively inefficient distribution system so popular cars with the hottest features arrive at the appropriate dealerships. Auto dealers' lots often overflow with expensive inventory that must be discounted to reduce the glut. Or they become understocked, forcing customers to wait weeks or months for their ideal vehicle to be shipped from the assembly line.

GM vice president John Middlebrook said today that the new site will ease some distribution kinks.

For example, if dealers in California cannot unload all of their Chevrolet Cavaliers, GM can offer local Web surfers a hefty discount on the compact cars to make them more attractive. Likewise, if Chevy Tahoes prove particularly popular in the Northeast in the winter, GM can reduce or eliminate the online incentive, thereby boosting the automaker's profitability per unit.

Currently, incentives must be approved in Detroit and move through a Byzantine bureaucracy before reaching dealerships--a process that can take days or weeks.

"The beauty of the Internet is that it gives us flexibility," Middlebrook said. "We can vary and change the discounts depending on market conditions. The great thing is that we'll be able to know what's going on every minute, every day. It's going to be a great learning experience."

The program--which also features gift certificates for people who test-drive GM vehicles and sweepstakes prizes including trips to the winter Olympics in Salt Lake City and the summer Olympics in Australia--is GM's first cross-brand promotion. It aims to provide consumers with one-stop information on five GM brands: Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac.

The Saturn division, which rarely offers cash discounts on its compact and midsize vehicles, is not participating in the effort.

Middlebrook said he was not worried that cross-branding will dilute the identity of each brand. In fact, he said, clumping the brands will help lower the average age of some of GM's buyers. GM has been struggling to attract younger buyers to its relatively upscale Buick and Cadillac brands for more than a decade, as the audience withers and baby boomers flock to imported luxury vehicles by Mercedes, BMW and Lexus.

According to Tom Jump, director of advertising and sales for Buick, the average Buick buyer who makes the purchase in a physical dealership is 60. By contrast, the average age of an online Buick buyer is 45--a clear nod to the prevalence of younger consumers who prefer to shop online for major purchases.

GM would not forecast traffic on the site, which debuted yesterday. But the site, when combined with other GM sites such as GMBuyPower.com and divisional sites, is expected to generate more than 1 million hits per month for all of GM's online initiatives.

That is small compared with giant search engines such as Yahoo, but it is respectable for an automaker. More than 50 percent of consumers consult the Internet before buying a vehicle, according to JD Power and Associates.

The program is scheduled to run until July 15 but could be extended depending on traffic and the number of sales it generates--particularly sales that would have otherwise gone to GM competitors such as Ford Motor, DaimlerChrysler, Toyota Motor and Honda Motor.