DETROIT – General Motors Corp. has canceled plans for a joint venture with its dealers to boost car sales over the Internet, saying the business simply was not viable.
GM had said in February that it was seeking to form a $50 million company called AutoCentric, which was supposed to help set up an Internet car sales business for GM and its dealers. GM had also said the venture would sell vehicles from other automakers.
The world's largest automaker had planned to fund AutoCentric by selling half the company for $25 million to GM's 7,800 dealers and providing another $25 million itself. But in a filing with the U.S. Securities and Exchange Commission on Tuesday, GM said it was ditching the whole effort.
The original offer was withdrawn "due to a determination that the business model is not viable at this time," GM said.
A majority of U.S. car buyers browse the Internet for information. Automakers have made several stabs at trying to lure Internet shoppers, including GM's own BuyPower site. But customers have consistently preferred independent sites, which have long offered invoice prices and more advice on how to get the best deal.
GM had said that by setting up an "independent" all-brands site, its dealers would have greater access to those shoppers. Dealers who participated could also commit to offer a specific Internet price for their vehicles.
GM's move comes a few days after Ford Motor Co. told the SEC of its intention to sell a stake in an Internet firm for a loss of about $49 million.
Ford bought its 462,962 shares of Internet Capital Group Inc. for $50 million in December 1999, when the stock was valued at $108. Internet Capital Group's stock was trading at $1.15 on the Nasdaq market on Tuesday.
Ford spokesman Todd Nissen said it was not clear whether a $200 million third-quarter charge for reduced values for some of Ford's Internet ventures included the Internet Capital Group stake. He also said there could be tax implications from the sale.