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GM Starts Up Internet Unit

General Motors said Tuesday it's gearing up its Internet operations by forming a new Internet unit dubbed E-GM group with electronic malls and other services aimed at stoking sales.

"We want to put a bear-hug on e-commerce," said G. Richard Wagoner, Jr., president and chief operating officer of General Motors.

The new business group will put a range of GM products and services "closer to customers" by using electronic malls that deliver real-time, interactive and customized relationships.

E-GM will oversee GM BuyPower, the automaker's online store; OnStar; GMAC's e-commerce services, and GM Service Parts Operations. Mark T. Hogan, vice president of small car operations, was tapped to head up the unit.

Asked at a press conference how much revenue the new division will draw, Hogan said, "We don't know how big it is, but it's huge. We're pretty sure we're going to transfer the company to being an Internet company."

GM has been testing delivery of Internet-ordered cars with its Cadillac brand. It can deliver a car in about 15 days and it's looking to trim the time.

Asked if GM is planning an Internet tracking stock for the portion of its electronic business, Wagoner said, "it's not on the radar screen." Instead, the auto maker is planning to integrate the Internet to reach out to new customers and streamline the sales process.

GM already has more than 100 consumer Web sites around the globe with 3.8 million unique visits in June, the company said. GM BuyPower drew more than 650,000 visitors shopping for new vehicles in June, the company said.

GM's OnStar communication system, which contacts emergency help and gives directions, will launch a Web vehicle later this model year after its test in June.

Ronald L. Zarrella, executive vice president of GM and president of GM North America, will oversee the new division. He said the auto giant wants to work with dealers to enhance the sales and service experience.

"We are committed to partnering with our dealers as we build this new model moving forward," Zarrella said in a statement. "Many of our dealers are already moving into the Internet sales arena. Integrating our systems simplifies the shopping and buying process and allows for a seamless connection with our customers."

Written By Steve Gelsi, CBS MarketWatch

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