California GM Dealers List Cars on eBayBy Michelle Krebs August 10, 2009
Beginning Tuesday, General Motors dealers in California can begin listing their inventories of some Buick, Chevrolet, GMC or Pontiac vehicles on online shopping site, eBay.com, in an effort to draw more consumer eyeballs to the automaker's cars and generate sales leads for dealers. GM and eBay executives detailed their partnership Monday morning, after GM CEO Fritz Henderson hinted about it a month ago when the automaker emerged from Chapter 11 bankruptcy. Henderson used it as an example of new ways the new GM would go to market.
The eBay venture is hardly groundbreaking. Already, about 30,000 dealers nationwide list their vehicles -- mostly used but some new -- on the site. In fact, GM was the first to coordinate with eBay to list dealer inventories of Certified Pre-owned Vehicles on eBay.
The newest GM-eBay venture is the first "virtual showroom online" by eBay with an auto manufacturer, said eBay Motors Vice President Rob Chesney in a conference call with media Monday. While exclusive to GM now, similar ventures with other automakers are possible, he suggested.
How It Works
GM has structured its new-car foray with eBay in a way allows consumers to comfortably shop online and even initiate the purchase process but it doesn't raise the ire of dealers because it fully involves them on a voluntary basis.
California dealers can list vehicles in their inventories with prices on eBay. The inventories will consist of select new 2008, 2009 and 2010 Chevrolet, Buick, Pontiac and GMC models; Cadillac as well as Hummer and Saturn, which are both being sold, are excluded. Cadillac opted out of the eBay program for the launch but may join after it sees early results for the other divisions, said Mark LaNeve, GM's U.S. sales chief.
Already 90 percent of GM's 250 California dealers have signed on and are listing about 20,000 vehicles, he added.
That vehicle inventory will be listed in three places on eBay's site: on a special co-branded GM and eBay Motors micro site (www.gm.ebay.com); on eBayMotors.com, where many dealers already list their new-car inventories; and on eBay.com, which lists all kinds of items well beyond cars.
The vehicles will have prices and will not be auctioned as are many eBay-posted items.
Instead, consumers can opt to hit the button accepting the "buy it now price" and actually start the buying process online. That buy now price is GM's Friends and Family/Supplier price, which can be even lower if the dealer chooses, said LaNeve.
Or, consumers can hit the "make an offer" button that sends a message to the dealer with the amount they are willing to pay. Consumers can then negotiate online, by phone or in person.
Consumers also can hit a button to ask a question about the vehicle or dealerships.
While all transactions will be completed by the dealership, LaNeve predicts many consumers will never set foot in the dealership with even the exchange of funds able to occur via the Internet.
Officially, GM's California eBay venture runs from August 11 to September 8. However, the automaker is optimistic it will be successful and expects it will be rolled out nationwide quickly.
GM selected California for a number of reasons beyond the fact that eBay is based there.
It is a state quick to adopt new technology. It is a large market, but one that has been hard-hit by the recession. And it is a market in which -- when strong or weak -- GM underperforms. GM's market share in California is 13 percent to 13.5 percent, when its national market share is 19.5 percent.
LaNeve noted in California, GM outperforms the market in truck and full-size SUV sales, slightly underperforms in crossovers and is significantly below par in car sales.
What's more, GM executives have said for the automaker to have a successful turnaround it must succeed on the coasts.
"If it can work in California, it can work anywhere," said LaNeve.
To make it work in California, GM will launch a significant marketing campaign that includes television, print, radio and in multiple languages.
eBay Motors numbers were compelling for GM. About 12 million unique visitors go to the site every month and the average eBay Motors shopper spends 40 minutes on the site, Chesney said. In 10 years of business, 3 million vehicles have been sold on Ebay. "We sell a car every minute," Chesney said. -- By Michelle Krebs