Hundreds of General Motors's California dealers
will let consumers haggle over the prices of new cars and trucks
through the eBay online marketplace under a trial that begins Tuesday.
225 of California's
dealers are set to take part in the program.
They will be selling Buick
co-branded Web sites through eBay Inc.'s online auto marketplace, eBay
Motors, until September 8. The cars will also be searchable through
eBay Motors and eBay's main site.
Although the companies previously said such a trial was in the works, details weren't released until Monday.
The trial is part of Detroit-based General Motors Company's
turnaround plan, making more official a practice some of its dealers
had already participated in on their own. It expands an existing
partnership covering GM certified-used vehicles sold through eBay.
It also marks a shift for San Jose
eBay, since most of the vehicles sold on eBay Motors - a site that
sells various types of vehicles and auto parts - have traditionally
Starting Tuesday, eBay visitors will be able to visit Web pages
like gm.ebay.com and chevy.ebay.com, where they can browse new 2008 and
2009 vehicles, ask dealers questions and figure out financing. Select
2010 models also will be available.
The co-branded sites will also include a Web tool
currently on eBay Motors that helps shoppers determine if they're
qualified to trade in their old car for money toward a new one under
the government's just-refilled "cash for clunkers" stimulus program.
Car buyers will be able to choose between the two standard
options currently offered on eBay Motors: Negotiating a price with a
dealer through the site or purchasing right then at a fixed price. Cars
will be picked up at the dealerships.
EBay Motors vice president Rob Chesney said the companies had
decided to run the trial in California because there are many
tech-savvy consumers there. EBay users who live outside California can
contact dealers to see if they're willing to sell and ship vehicles to
them, he said.
The test comes a month after GM made an unusually quick exit
from bankruptcy protection with ambitions of becoming profitable and
building cars people are eager to buy. Once the world's largest and
most powerful automaker, new GM is now leaner, cleansed of massive debt
and burdensome contracts that would have sunk it without additional
GM CEO Fritz Henderson said in July that the company was
working on an experiment that would let eBay users in California bid on
vehicles or buy them at a fixed price. Dealers were to distribute the
cars. At the time, no deal had been completed, though.
Mark LaNeve, GM's vice president of US sales, believes that
getting the automaker directly involved in new online sales will give
customers a larger sense of security about buying a car on the Web.
Currently, many consumers research new cars online, but most still go
down to a dealer to make the actual purchase.
He's hoping it generates more interest in GM vehicles in California - a market he said the company needs to improve in.
For eBay, the program fits in with its strategy of growing its
market for goods that are still new but not necessarily the latest
models. It's also a chance to get more people interested in making new,
large purchases on a site whose past is steeped in the sale of
hard-to-find collectables. The sale of used cars on eBay is already
proof that consumers are getting more and more comfortable buying
higher-priced items online, Chesney said.
"New cars are like the next frontier of that," he said.
The companies would not give financial details of the deal, but
GM spokesman John McDonald said it was an arrangement that they think
will be profitable for both firms.
If the companies feel the trial is successful, they want to
expand it across the US. Lorrie Norrington, president of eBay
marketplaces, said eBay may eventually try doing the same thing with
other automakers, too.
Inder Dosanjh, a Dublin, California-based dealer who owns four
GM dealerships and currently sells used cars on eBay, said the program
shows GM is trying to step outside the box and find new ways to sell
cars. He plans to list all his new inventory on eBay this week.
"I think they should have done this a long time ago," he said.
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