GM Extends Its eBay Partnership - But Why?

By Richard Read

When General Motors emerged from bankruptcy on July 10, the company's newly reinstalled PR man, Bob Lutz, made several important announcements. Among them: GM had begun partnership with eBay (EBAY), which would offer customers the opportunity to bid on and purchase vehicles through the popular auction website. That intrigued many buyers and many in the industry -- the only problem being that eBay said the arrangement wasn't a done deal.

By August 11, however, the two companies had dotted Is, crossed Ts, and put up 16,000 GM vehicles for sale on eBay -- of which roughly 50 sold. We're not sure how things have gone since then, but Automotive News took the liberty of perusing 3,000 GM listings on eBay, all of which had an end-date of September 1, and none had been sold.

Still, General Motors insists that the pilot program has been successful and has generated increased awareness of GM products. And that's likely true. (Based on our own meanderings through eBay Motors, we're guessing that the program's major shortcoming might be that the subdomain -- GM.eBay.com -- is slightly hard to find.) The company has said that roughly 4,000 eBay shoppers "entered into negotiations -- either online, over the phone or in person -- to buy a vehicle." There's no word on how many of those negotiations resulted in sales.

GM's vice president of U.S. sales, Mark LaNeve, says that "The numbers on eBay itself aren't significant, but we didn't think it would be." Unfortunately, that's the classic "Yeah, we meant to do that" explanation for poor performance that never convinces anyone. However, General Motors has opted to extend the program from its original end date of September 8 to September 30 -- so perhaps the company has reason to believe that its partnership with eBay could bear fruit in the future.

Comments

[Gadz:]

EBay has 70 million unique visitors per month, that's why GM wants on. That's a lot of potential customers that they don't have to setup infrastructure for to help sell their cars.

If you want to have help searching EBay for GM cars try getitnext.com, the best search engine out there for EBay.

Sep 03 02:13 PM

[manya05:]

What a ridiculous concept, the only outcome I see out of this is someone dumb enough to bid $12,000 on a $16,000 vehicle, not get it, and then be spammed and pestered by GM for years to come. There must be better ways of compiling a spam mailing list.

Sep 03 03:06 PM

[a. palmer jr.:]

Why would you want to buy a new GM car on eBay without taking it for a test drive? I would think the local Chevy dealer would be miffed if you took his car for a test drive then bought off eBay. A car is such a big purchase that I would want to see in person the actual car that I am going to buy, not one that looks like it, similarly equipped.

Sep 03 08:52 PM

[C.S. Jefferson:]

Because EBAY automotive is very viable as a market. The problem is that it's the used automotive market that makes it successful.

What GM, FORD, CHRYSLER and others should do is use ebay to dump old, excess inventory supply at substantial discounts.

The CASH FO' CLUNKER program was successful as a marketing tool and really demonstrates that if people believe they are getting a deal--even though they weren't due to dealerships marking vehicles back to MSRP--they will be consumers again.

By the way, folks, I've used ebay to sell my own car and was really surprised how smooth the transaction went. I was a skeptic and never thought I'd be willing to buy a car online but times change and if you inject auto manufacturer's warranties it may provide assurances to people reluctant to buy!

Sep 03 11:56 PM

[Duke5125:]

Why is anyone surprised by the results? One can easily find individual dealers who have been listing cars on eBay for years yet have only sold a small handful... sometimes with dozens of listings every week. They must believe that they are getting value for their fees.

GM and the dealers are happy if they get emails and calls about the cars. They could care less if they "sell" via an accepted offer on the eBay Motors site.

Regarding the other comments, first, the GM listings aren't auctions at all, they are classified ads with a more sophisticated "offer" function intended to open communication with the dealer. The dealer has no incentive to actually close online... if they do they have to pay a fee to eBay and the final selling price is recorded for all to see.

Second, the GM listings on eBay appear to be targeted geographically, so it's even more unlikely that a deal will be finalized without an in-person visit. This means that the "sight-unseen" concerns are moot and makes it even more unlikely that the car will "sell" on eBay.

Third, with a new car does one really need to test drive it ahead of time? Rather, this is just another version of what's been happening for years. One visits the dealers to decide which car and options he wants... then they go home and contact 5 more dealers of the same marque via eBay, by phone, or by email to get a price quotes. These are new cars... they are all the same and they are under warranty. You can look it over when you get there to pick it up. Otherwise, it's just about getting the best price on a product available from multiple outlets.

Sep 06 12:33 AM