Vauxhall chairman and managing director Nick Reilly at Birmingham motor show announced price cuts of 3.5% for cars sold online.

The discount applies to the entire range and is on top of list price reductions of up to 12% on cars sold through its dealers.

David Crundwell, Vauxhall business affairs manager, said: “It is more economical to sell through the internet. But the point of online selling is not just price – it's price combined with convenience shopping. That has not been offered by the motor industry before.”

Vauxhall claims to have sold around 1,200 vehicles through its dotcom venture, launched a year ago. “That's around three times the levels of annual sales from an average dealership,” said Mr Crundwell.

“We did a lot of research before dipping our toe in the water with the online venture. Now we have a year's experience and we are comfortably immersed in the world of the internet. “But we are convinced that the best way to operate is in partnership with our dealers.”

Dealers deal direct with customer orders and deliver the car to an address of the buyer's choice.

“You no longer need to go to a dealership to buy from, and have the back-up of, a dealer,” said Mr Crundwell. “It's the ideal way forward.”

Vauxhall also announced Curve, a website forum designed as a young person's chatroom. “It will help us to understand more about young people,” said Mr Crundwell. “We are using the web in a new and imaginative way to improve business – we are streets ahead of other car retailers.”