GM Sees Net Car Sales Boom In Brazil

In sharp contrast to the consumer resistance that online car dealers are experiencing in the U.S., General Motors (GM) said Tuesday it has sold over 8,000 Chevrolet Celta cars in Brazil via the Web since mid-September.

According to GM, more than 80 percent of its expected 25,000 Brazilian Celta sales will take place online over the next several months. The company believes that over US$1 billion will be generated in Latin American e-commerce by 2005, 50 percent of it in Brazil.

"We're still scratching the surface of a terrain with enormous potential. Our challenge is to bridge the gap between Internet use and new-car buying patterns in Brazil," said Fritz Henderson, GM group vice president and president GM Latin America, Africa & Mid-East.

Built with the Net in Mind

The majority of GM’s online success has come from the in-store kiosks located in GM dealerships throughout Brazil. Although consumers have the same ability to go online and customize, finance, purchase and track the progress of their new car from home as they do at the dealership, GM said that consumers appear to be generally uncomfortable making such a large purchase from home.

The company said that the Celta was created from the outset with the Internet in mind, offering only 20 manufacturing options, so that any given Celta configuration can be built near its final destination. Five distribution centers located throughout Brazil fulfill the Internet orders.

"The Celta is, for my money the best example of what we can do to combine design, engineering, manufacturing and distribution in a proactive way in this market that is really starting to embrace the Internet," said Mark Hogan, president of General Motors Internet branch e-GM.

Favorable Numbers

According to recent reports by Jupiter Communications and the New Car Buyers Survey, the number of Brazilian Internet users could grow more than 350 percent by 2003. Up to 14 million Brazilians are currently online, and 65 percent of Brazilian new-car buyers have Internet access.

GM said its Internet Brazilian sales strategy is based on two primary factors: a large "popular car" market that is primarily driven by price; and Brazil’s speed in adopting Internet technologies.

Jury Still Out in U.S.

GM officials say they are cautiously optimistic about the chances of a similar Internet sale model being implemented in the United States. In fact, several car plants now being built in Lansing, Michigan are currently incorporating some Brazilian Celta model elements.

"Clearly, we have issues of online ordering and distribution in this country that are different from the approach we've taken in Brazil," Hogan said. "But we think as the consumer continues to get more and more comfortable with the Internet, we want to be ready."