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Vauxhall poised to grow online sales

Nick Reilly believes Vauxhall has gained valuable experience in internet sales in the UK and is “well placed to take advantage” of any surge in online sales activity.

Mr Reilly said Vauxhall's dotcom programme for General Motors was likely to be expanded to other European countries over the next 12 months.

“In Britain we have sold 1,200 cars online, which is significantly more than any other company,” he said. “We have leadership in this market. In addition, the technology that we have delivered can be used by GM in other countries.”

He stressed that Vauxhall would continue to use its dealer network “as long as the economics are right” to supply and service cars sold online.

“As far as the consumer is concerned the dotcom car is a direct sale. But we can deliver around the country through our network – they make money for handling the car and also receive the servicing business.”

Vauxhall research showed customers were not satisfied with some of the dotcom operators like Virgin Cars, because of their “lack of vehicle choice and poor online facilities”, said Mr Reilly.

The dotcom concept was yet to return a profit on investment, though Mr Reilly believed that was only a matter of time.

Vauxhall acknowledges the importance of its dealer network and expects the current market structure to remain in some form post Block Exemption.

“We will still need to sell and service the product nationwide – that's what the customer expects,” said Mr Reilly.

“In order to keep hold of brand values, the network must be franchised to meet certain standards. If Block Exemption review frees up the market we will have to look at making our network more cost-effective.”

Vauxhall is considering ways to compete with potential market entrants like supermarkets, who may focus on selling a limited range of popular models to keep their overheads down.

“I believe it's doable, and we are working on solutions in partnership with dealers,” said Mr Reilly. This may include selling a higher proportion of cars through the internet and using online processes to cut costs with suppliers. Vauxhall claims its transaction prices are already competitive with mainland Europe, but it has been easing down list prices in a bid to restore consumer confidence.

“We expect list prices to continue gradually reducing towards the transaction price, but there will be no sudden leap,” said Mr Reilly

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