To be fair to GM and other car manufacturers, it's not as easy as it might appear for them to sell cars on the Web. Dealer franchise agreements are ironclad and long-standing, and legally binding. Those agreements also prevent them from selling cars directly to the public. For instance, GM has tried several times to own and operate their own retail stores, and has been shot down every time. In July 1999, the state of Texas denied the Detroit-based corporation a retail license to operate a dealership in Houston, citing a law on the Texas books that prohibited automobile manufacturers from owning or running retail stores.
Most states have similar laws.
The fallout in dealer profitability and distribution has been significant. The GM initiative, which is still in the planning stages, takes an unconventional approach to the Web dilemma. In an unusual move by a major manufacturer, the site plan would allow dealers to list all the vehicles in their inventory, including non-GM stock. The first trial balloon for the plan was floated in an August 10 letter to dealers from Bill Lovejoy, GM group vice president of North America vehicle sales, service and marketing. In subsequent interviews, Lovejoy has indicated that nothing is set in stone.