DaimlerChrysler AG is planning to spin off its online consumer finance operation, giggo.com.
For Brian Reed, giggo.com's CEO, that will be a daunting task. Consumers are barely aware of the company. And the recent crash of dot-com stock prices has slowed the pace of dot-com initial public stock offerings.
Still, DaimlerChrysler executives have high hopes. Chairman Jurgen Schrempp is counting on financial services for growth. And giggo.com is a pet project of Klaus Mangold, chairman of DaimlerChrysler Services (debis) AG and a member of the company's board of management. Giggo is a unit of debis, and Reed reports to Mangold.
The company did not indicate when the public stock offering would be attempted.
Stock analysts and DaimlerChrysler's dealers responded to the announcement with a yawn. Many analysts said they did not know DaimlerChrysler offered such a service; many dealers say they had forgotten it was available.
Giggo.com offers auto financing to consumers on the Internet. Consumers get a voucher in the mail with which they can purchase any brand of vehicle.
Chrysler group dealers in the USA were upset when giggo.com was introduced one year ago. Dealers did not want their factory to compete for lucrative loan business.
The furor has died down, due in part to giggo.com's low profile. Reed would not say how many contracts his company has written.
'When we first heard about it, dealers got in an uproar, but then we forgot about it because we never, ever, get any contracts through here,' said Joe Himmelspach, the general sales manager at Crestwood Dodge in Garden City, Michigan.
An Orlando, Florida, Chrysler-Plymouth-Jeep dealer, who did not want his name used, said just one of the 2,500 vehicles he has sold in the past year went to a giggo.com customer.
But the online financing arena is potentially lucrative. According to CNW Marketing Research of Bandon, Oregon, consumers will get more than $69 billion worth of online automotive financing by 2003. This year the figure will be close to $20 billion.
So far, giggo.com's advertising and marketing efforts have been limited, focusing on banner advertisements on the web and a smattering of radio and print spots, Reed said.
Reed said he will concentrate on building brand awareness for giggo.com.
Said Reed: 'We really haven't done what we need to do to get customers into our site. If you don't tell people about what you offer, no one's going to come and buy anything.'