Rick Lee of EGM Discusses the Company’s Future at CAR Conference

LAS VEGAS – Rick Lee, manager of North American regional operations for EGM operations, spoke at the Conference of Auto Remarketing (CAR) 2000 on the future of e-commerce and e-remarketing. Lee gave several different perspectives on the new world that are starting to be generated. "You have to throw out every old paradigm and start with a clean sheet of paper," Lee said. "There are new players entering all the time. The competitive landscape is becoming very crowded, but the end game for EGM is for GM to become a digital business."

According to Lee, the whole phenomenon (e-commerce) is turning things around. "Currently in GM, it’s not uncommon to see a 28-year-old tutoring the most senior managers at GM," Lee said. "It’s the younger generation, known as the e-generation, that are using the Internet, and shortly will become the buying public. The e-world shrinks geography. The e-world also shrinks the advantage of the seller and the buyer. The e-world shrinks the advantage of the big over the small. Those who are fast are going to crush the slow."

There are a number of e-commerce entities, Lee said. The first group is portal and online communities, which include companies such as AOL, Yahoo, Excite, MSN, and iVillage. The second group is the Internet intermediaries, such as Kelly’s and Edmund’s, which provide information and content. Then the third-party Internet transaction services, such as Drive-Off.com, Open Auto, CarPoint, Car Direct, AutoByTel, CarPrices.com, Priceline.com. The fourth group is the dealers, such as AutoNation Direct and CarMax, and Honda and Chrysler are also entering this marketplace. The fifth segment is automotive services offered online, which include finance services and parts. "Five years ago, the first three categories, portals and online entries, Internet intermediaries, and third-party Internet transaction services, did not even exist," Lee said.

"These entities participate at different point across the customer experience continuum. The portals provide awareness, the intermediaries provide research and allow sellers to dispose of their vehicles, and the third party transaction providers allow people to shop and buy commodities. In the next one to two years, there will be major consolidation in these industries," Lee said.

"At GM, we are tracking 500 websites on a global basis. GM has consistently underestimated the rate of adoption of people going online," Lee said. "Currently 86 percent of the people are online. Of those, 87 percent use the Internet for some part of their shopping process in buying a vehicle."

EGM was created in August 1999. The goals of EGM are to capture the full opportunity of the Internet, to leverage the entire enterprise, and to go fast, Lee said. "If you don’t move fast, you’re going to be left at the dock. The end game is to turn GM into a digital business. The other thing to look at is the people GM is in contact with."

In addition GM is in contact with 9 million new-vehicle buyers, Lee said. There are currently 80 million GM vehicles on the road. There are 10 million GM credit card holders, and 8 million Direct TV subscribers. "These are all people GM already has a relationship with. The elements of the EGM strategy are to consolidate and synchronize its online and off-line world, and to deploy a world-class capability to leverage its size. The biggest task is integrating the Internet with its dealer network."

Globally, GM had, prior to EGM, 150 websites, but each was independent of one another. GM is actively building its next-generation Internet product site that will integrate all the individual countries, brands, divisions, and GM BuyPower. "No matter where you are as an Internet user, you’ll be able to navigate seamlessly through all those sites."

GM is also developing alliances to support EGM. "The strategy for GM is to be ubiquitous. It starts with alliances with online portal companies such as Net Zero and AOL, working with information intermediaries such as Kelly Blue Book and Edmonds, and allowing people to navigate seamlessly through those into the GM BuyPower experience. The end game is to build a lifetime relationship with customers. In addition, GM is building GM supply power on the back end. The front end is GM BuyPower. GM supply power is looking to integrate all its suppliers together, creating a web-enabled supply chain," Lee said.

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