The venture will allow customers to purchase cars and trucks online through EBay. To begin with, the project has been started by roping in some 225 dealers in California.
"Dealers who are participating see this as a great mechanism to get their products and information out to people where they're doing initial shopping and looking, which is on the Internet," said Dave Barthmuss, western regional spokesman for GM.
The tie up will allow consumers to place online bids for new vehicles on these dealerships. The eBay's normal "Buy It Now" and "Best Offer" formats would be available under the program.
Scheduled to begin on August 11, the program will run through Sept 8. Chevrolet, Buick, GMC and Pontiac brands will be up for grabs at gm.ebay.com during this period.
Substitute to dealer network
As a part of the GM restructuring plan, by the year 2010, the company will scale down its dealer network by as much as 42 percent to 3,600.
The new avenue would not only provide an opportunity to shore up the dwindling sales but also test the waters if the ‘online world’ proves to be a good distribution channel for a product like automobiles.
“Exploring new online distribution alternatives is a good idea as GM downsizes its brick-and-mortar distribution system,” said Laura Martin, a Los Angeles-based analyst at Soleil Securities Group Inc.
GM is already using eBay for its certified pre-owned cars. Moreover, thousands of franchisees and independent dealers use eBay as an additional sales channel. However, the present arrangement with GM is EBay’s first involving new vehicles.
Research suggests program should succeed
The impetus to go ahead with the tie up came from the revelation of a latest report from J.D. Power & Associates. Their study revealed that in 2008, three quarters of the new-vehicle buyers searched the internet during their decision making process of buying cars. In 2007, 70 percent of the consumers had used the internet for such a research.
The year 2008 also saw the largest year-over-year increase in online automotive shopping since 2001, revealed the J.D. Power study.
With increased number of people relying on Internet to take decisions to buy cars, the alliance should succeed.
“There’s clearly an appetite on behalf of consumers to be able to negotiate price and purchase vehicles online,” EBay Motors Vice President Rob Chesney said.
GM and Ebay
Please tell the rest of the story. Who pays the additional Ebay fees in the end ? It is just a gimmick to allow car salesmen and women more access to private info. I tried looking thru inventory when my daughter was looking to buy a new car. Would not allow it unless you gave contact info. Instead of checking out inventory in private all I got was a month of phone calls from several dealers. The one question that was central was when can I come in and talk to them. Bad enough I have to deal with people who size you up and figure how much more they can add to the price of a car based on how you dress. I sure as he** don't want them in my home......As far as Gm is concerned the only "platform" they should get is a diving platform about a mile high after the way they have screwed both American workers and the public in general. Their latest job loss was a mine closing in the US while they now buy the product from Russia and South Africa. Without jobs who is going to buy cars ???? Morons........
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