Brand new GMC trucks are displayed at Hilltop Buick Pontiac-GMC in Richmond. Hundreds of General Motors California dealers have started to auction off new GM vehicles on eBay as part of a trial program with the online auction site and GM.
General Motors today will join legions of mom and pop entrepreneurs by peddling its new wares online on eBay.
Starting today, consumers can bid for new GM cars from California dealerships online at eBay Motors. It’s a novel strategy for the nation’s largest automaker. eBay, the San Jose-based online marketplace, runs a brisk business in used cars, but this is the first time sizable quantities of new cars have been offered on the site.
The trial program, announced Monday, is exclusive to California and will run through Sept. 8. Most of the state’s 250 GM dealers will be posting new-vehicle inventory for offers on gm.ebay.com. Program organizers characterize it as a potential gold mine, coming on the heels of the sales-boosting federal “cash for clunkers” program.
While eBay Motors has long been a popular stop for used car shoppers, opening up haggling for new vehicles is new ground.
“We don’t currently sell a lot of cars on eBay, but if eBay does a good job of promoting it, it’s potentially an opportunity to generate a lot of sales,” said David A. Rodgers, senior vice president and general manager of the Sullivan Automotive Group, which includes John L. Sullivan Chevrolet in the Roseville Automall. “eBay’s brand recognition goes a long way. It’s pretty strong.”
Rodgers said the entire John L. Sullivan inventory will be posted at the site today.
Officials of eBay said the site will enable consumers to “browse hundreds of California dealer online showrooms, ask questions, negotiate prices and arrange financing and payment to purchase a new 2008, 2009 or select 2010 car.”
They said the goal is to simplify the new car-purchasing process to a “click and buy” procedure on new Chevrolet, Buick, GMC and Pontiac products. Brand-specific sites also are offered: chevrolet.ebay.com, buick.ebay.com, gmc.ebay.com and pontiac.ebay.com.
GM said vehicles bought online must still be picked up at dealerships, and customers will still have to pay California sales tax. Cadillac is not part of the program.
GM touted the program as part of its ongoing rejuvenation effort and a chance to boost its market share in California, the nation’s No. 1 car market.
“It’s one way that we’re reaching consumers where they are,” said Diedra Wylie, a spokeswoman in GM’s Western region office in Thousand Oaks. “I think that it’s great that we’re on the Internet. We’re teaming up with a great program.”
GM’s announcement Monday reflects the growing use of the Internet by consumers shopping not just for smaller items but big ticket purchases such as cars and houses.
The automaker noted that increasing numbers of car buyers already are doing their homework online before heading to dealerships to haggle.
A recent study by Westlake Village-based J.D. Power and Associates said more than 75 percent of new-vehicle buyers in 2008 used the Internet during their shopping and research process, up from 70 percent in 2007.
According to eBay, prospective car buyers will have up to 20,000 new vehicles to choose from once the GM program is up to capacity.
Rodgers said he wished John L. Sullivan had more new-car inventory to post on the eBay Motors site, noting that inventory has been reduced because of the popularity of the cash for clunkers program.
Those familiar with conventional eBay bidding can expect to see some familiar procedures at the GM-eBay site.
For example, some vehicles will be offered through the “buy it now” option, where shoppers agree to pay the advertised price. But shoppers can also exercise the “best offer” option, where buyers indicate the price they are willing to pay and can negotiate online with the dealer for a particular vehicle.
The site also allows shoppers to compare pricing offered by participating dealerships, determine the value of a trade-in vehicle and even get information on whether their current vehicle qualifies for the cash for clunkers program.
Industry reaction to Monday’s announcement was mostly positive.
“While not groundbreaking, GM aggressively facilitating the placement of dealer inventory on eBay can only help sell more vehicles,” said Jeremy Anwyl, CEO of Edmunds.com, the Santa Monica-based auto information site. “The most intriguing aspect is the ‘buy it now’ pricing. It will be interesting to see how this feature is used by dealers.”