Hundreds of General Motors's California dealerswill let consumers haggle over the prices of new cars and trucksthrough the eBay online marketplace under a trial that begins Tuesday.
About225 of California's 250 GM dealers are set to take part in the program.They will be selling Buick, Chevrolet, GMC and Pontiac vehicles onco-branded Web sites through eBay Inc.'s online auto marketplace, eBayMotors, until September 8. The cars will also be searchable througheBay 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'sturnaround plan, making more official a practice some of its dealershad already participated in on their own. It expands an existingpartnership covering GM certified-used vehicles sold through eBay.
It also marks a shift for San Jose, California-basedeBay, since most of the vehicles sold on eBay Motors - a site thatsells various types of vehicles and auto parts - have traditionallybeen used.
Starting Tuesday, eBay visitors will be able to visit Web pageslike gm.ebay.com and chevy.ebay.com, where they can browse new 2008 and2009 vehicles, ask dealers questions and figure out financing. Select2010 models also will be available.
The co-branded sites will also include a Web toolcurrently on eBay Motors that helps shoppers determine if they'requalified to trade in their old car for money toward a new one underthe government's just-refilled "cash for clunkers" stimulus program.
Car buyers will be able to choose between the two standardoptions currently offered on eBay Motors: Negotiating a price with adealer through the site or purchasing right then at a fixed price. Carswill be picked up at the dealerships.
EBay Motors vice president Rob Chesney said the companies haddecided to run the trial in California because there are manytech-savvy consumers there. EBay users who live outside California cancontact dealers to see if they're willing to sell and ship vehicles tothem, he said.
The test comes a month after GM made an unusually quick exitfrom bankruptcy protection with ambitions of becoming profitable andbuilding cars people are eager to buy. Once the world's largest andmost powerful automaker, new GM is now leaner, cleansed of massive debtand burdensome contracts that would have sunk it without additionalfederal loans.
GM CEO Fritz Henderson said in July that the company wasworking on an experiment that would let eBay users in California bid onvehicles or buy them at a fixed price. Dealers were to distribute thecars. At the time, no deal had been completed, though.
Mark LaNeve, GM's vice president of US sales, believes thatgetting the automaker directly involved in new online sales will givecustomers a larger sense of security about buying a car on the Web.Currently, many consumers research new cars online, but most still godown 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 itsmarket for goods that are still new but not necessarily the latestmodels. 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 ofhard-to-find collectables. The sale of used cars on eBay is alreadyproof that consumers are getting more and more comfortable buyinghigher-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, butGM spokesman John McDonald said it was an arrangement that they thinkwill be profitable for both firms.
If the companies feel the trial is successful, they want toexpand it across the US. Lorrie Norrington, president of eBaymarketplaces, said eBay may eventually try doing the same thing withother automakers, too.
Inder Dosanjh, a Dublin, California-based dealer who owns fourGM dealerships and currently sells used cars on eBay, said the programshows GM is trying to step outside the box and find new ways to sellcars. 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.