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Sunday, October 31, 1999 Published at 16:57 GMT

Business: The Company File

Car makers take to the Net

Out with the old...and in with the

Car manufacturers come of age on Monday 1 November as Vauxhall becomes the first to sell to customers directly over the internet.

From midday, people will be able to select a Vauxhall car online and have it delivered to their door within about a week.

Customers will also be able to receive a guide to the value of a part exchange vehicle, arrange a test drive at home, and sort out finance for their purchase.

"We believe we are the first manufacturer in the world, working with our retailers, to offer this service across a range of our products," said Nick Reilly, Vauxhall chairman and managing director.

Initially there will be six special ".com" cars, two each from the Corsa, Astra and Vectra ranges. Further models are expected later.

The Consumers Association said: "It's a start. We want to see prices come down across the board. So pressure must be kept up." The organisation has recently launched a service to help UK car-buyers purchase their vehicles from other European countries where cars are often substantially cheaper.

Luton connection

Vauxhall's online service, which will be demonstrated by Carol Vorderman, is being launched in conjunction with London's second easyEverything store - the Internet shop from budget airline easyJet which claims to be the largest store of its kind.

Founder of easyJet and easyEverything Stelios Haji-Ioannou said: "I am convinced that the Internet has come of age and is fundamentally changing the way that consumers shop.

"I am particularly pleased that Vauxhall, like easyJet head-quartered in Luton, is showing such innovation in becoming the first car manufacturer to sell its product over the Internet."

Pressure on franchises

The move is likely to put pressure on Vauxhall's 500 strong franchised dealer network, which will still continue to sell new cars.

[ image: Customers can arrange a test drive online]
Customers can arrange a test drive online
Analysts say that dealer franchises, with their system of recommended retail prices, is one reason for the high price of cars in the UK.

The car industry has been under pressure to cut its prices following an investigation from the Competition Commission which is due in December.

Surveys have shown that identical cars are sold in Europe for much less than in the UK.

Ford and Volkswagen have already promised to refund the difference on cars bought before the end of the year if prices subsequently fall.

In the United States, car buying over the Internet has helped force prices down, with customers able to compare dealer mark-ups across the country.

Ford and Microsoft have also announced a tie-up to make buying cars easier on the internet.

UK consumers can already buy cars on the internet.

Totalise Car Save from the UK-based Internet Service Provider, Totalise, allows consumers to order the most popular models from suppliers in Europe.

The ISP says buyers can save up to £5,000 by purchasing imported cars through its service.

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29 Oct 99 | The Company File
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