The Project: Use electronic auctions to unload vehicles, to auto dealers, at the end of their leases.
The Payoff: Last year, GM moved 303,000 vehicles through such auctions, saving an estimated $180 million.
After several false starts, General Motors (GM ) Corp. has figured out how the Net can save it big bucks. The winning approach: selling used cars through online auctions. In early 1999, the carmaker and its finance arm, General Motors Acceptance Corp. (GMAC), were leasing close to a quarter of the 5 million vehicles GM sells each year. This left GMAC with a deluge of used cars when they came off lease. The only way to unload them was at live dealer auctions, often at a loss. So GM set up online auctions for off-lease vehicles and retired rental cars. GM sold 303,000 used cars via the Web last year and should beat that number this year. Dealers can get cars from all over the country. For GM the pricing is better, and auction costs are minimal. This boosts returns by $500 to $600 per car -- a total of $180 million last year. This effort on the Web gets the checkered flag.
By David Welch