New GM site makes dealers choice
The giant automaker is counting on a new procurement Web site to save its 7,500 dealers money on everything from gas to office furniture.
The automaker estimates that deals made possible through its new "GM Dealer Supply Advantage" program could reduce dealers' costs by up to 15 percent.
The new site, hosted by Covisint and Reynolds & Reynolds, is slated to launch next Monday. Individual dealers will be charged $360 a year to subscribe, although GM executives said dealers should more than make up their costs in the savings they realize.
"The more volume you get, the more hurdles you pass, and the bigger volume discounts," said Bill Lovejoy, head of GM's sales, service and marketing organization. "We believe the real savings will be as we can make larger and larger purchases."
For instance, dealers will be able to get 5 cents off each gallon of gas they buy through the site, said Lovejoy.
GM dealers spend around $1 billion on various materials and supplies, Lovejoy added. He estimated that about a third of the car company's dealers would sign up for the system initially.
Dealers will access the marketplace online, connecting through the GM Dealerworld Web site.
The service will not be open initially to Saturn and Saab dealers, or to alliance partners Subaru and Isuzu, GM said.