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GM tells dealers to cut ties with some Websites

19 May 2000

    Sacramento - According to a story on CNET News.com, General Motors mailed 
letters to more than 7,000 U.S. dealers this week reiterating a long-standing 
policy that prohibits dealers from selling to third parties for resale to 
consumers.  The story, written by Rachel Konrad and Sandeep Junnarkar, also 
said that Ford Motor recently sent a similar letter to its dealers.

    It seems that General Motors is threatening to punish dealers that sell 
cars through some independent websites, such as CarsDirect.com and CarOrder.com, 
rather than official GM sites.  The story states that the GM letter emphasizes 
that consumers may buy GM cars online at the GM website or from the websites 
of dealers throughout the country.

    The CNET story indicates that it is also permissible for consumers to buy cars 
through websites such as Autobytel.com or Autoweb.com, although it is not 
certain whether that approval comes from GM or is simply surmised by the writers.  
Apparently, someone failed to tell them (either GM or the two writers) that 
Autobytel and Autoweb are both now also engaged in selling vehicles directly to 
consumers.

    Meanwhile, earlier this week, CarsDirect filed notice with the SEC that 
they are planning an IPO.  Given the position of GM and Ford, this may have 
a serious affect on the offering, either delaying it or depressing share 
prices.


MJR