GM Says Bye, Bye eBayBy Michelle Krebs September 29, 2009
General Motors will end its listing of cars online through eBay this week because it didn't generate sales, a newspaper report says.
The program had been set to end September 8 but was extended through the end of the month. GM had been optimistic that it would be successful and would be rolled out nationwide. But it has not generated sales, the Wall Street Journal reported, citing sales figures and dealer comments.
As a result, GM will not extend the eBay venture beyond September, the newspaper reported. A GM spokesman did not confirm the report.
Launched on August 11, the pilot program in California only allowed GM dealers in the state to list their inventory of Buick, Chevrolet, GMC and Pontiac vehicles on eBay with dealer pricing. Consumers could start the buying or negotiating process on time.
Vehicle pricing was one of the problems with the program. Edmunds.com, parent of AutoObserver.com, analyzed pricing of GM vehicles on eBay and advised consumers to avoid the "Buy It Now" pricing option. Instead, consumers should choose the "Make an Offer" option. Otherwise, they were paying too much.
Edmunds.com analysts looked at the "Buy it Now" price on GM eBay and found the average to be 2 percent higher than Edmunds.com's True Market Value (TMV), a price that reflects what shoppers are actually paying for vehicles. On a $25,000 car, that amounts to about $500.
Edmunds.com encouraged GM eBay shoppers to instead select "Make an Offer." But Edmunds.com also suggested if consumers want to speed up their purchase, their offer should be realistic, based on Edmunds.com's TMV, so that that is likely to be accepted quickly.
"The program inadvertently encouraged lowball offers and resulted in frustration on the part of consumers and dealers," said Edmunds.com CEO Jeremy Anwyl.
eBay had expected other automakers would follow suit.