BEIJING - Online shopping can help one buy a book, a T-shirt, or a cell phone. Now, even cars can be purchased on the Internet with just a few clicks of a mouse.

China's privately owned Zhejiang Geely Holding Group Co, which acquired the Swedish carmaker Volvo Car Corporation from Ford Motor Company earlier this year, on Monday launched its official store on Taobao Mall.

The venture, on China's largest business-to-customer shopping site by market share, means Geely is the first automaker to sell cars on Taobao.

The company will begin offering two of its Panda models on the website from Dec 22, initially through a group-buying system. "We will add more cars to the Geely store in the future, and also sell special editions which are only available on the Internet," said Liu Jinliang, vice-president of Geely, adding that the special editions will help differentiate the products sold in 4S (sales, service, spare parts and survey) stores and those on the company's online store.

Customers can search for information, place orders, and pay their deposit through the company's online store, and then test-drive, obtain their cars, and pay the remainder of the purchase price at traditional 4S stores. Liu said the company will provide door-to-door delivery, an installment payment plan, and pay-in-full services in the future, as it aims to improve the overall quality of online shopping.

Geely's initiative came after Mercedes-Benz offered a group-buying for its Smart Fortwo model on Taobao in September. Altogether 205 cars, which were priced at 135,000 yuan ($20,300), 23 percent lower than the original 176,000 yuan for each, sold out in about three hours after the group-buying session began.

Selling cars online is seen not only as a means of attracting attention, but also as a way of cutting costs. "By setting up an online store, we can save costs originally incurred for land, infrastructure, and human resources," said Yang Xueliang, public relations director of Geely, adding that the company may consider lowering the number its physical stores if the online venture is successful. "The costs saved, in turn, will lead to discounts for customers," Yang added.

Though online stores will not replace the functions of 4S stores, they are a phenomenon many automakers may adopt in the future, said analysts.

"It (setting up an online store) helps automakers to explore new ways of selling, though it is far from a large-scale practice," said Jia Xinguang, a senior auto industry analyst.

China Daily

(China Daily 12/08/2010 page16)