eBay Motors Experiencing Slump in Auto Demand

There is no doubt EBAY Motors has been an incredible success story for EBAY. In 2007, EBAY Motors GMV totalled $17.5B, representing an astounding 29.6% of EBAY's overall GMV. This makes EBAY Motors roughly 3x the size of the next largest category by GMV, Consumer Electronics.

Which is why the continued weakness in auto demand is not good news for EBAY. We already saw in Q108, that Motors Y/Y GMV growth, at 9.2%, significantly lagged EBAY's overall Y/Y GMV growth of 12.3%. In fact, ex Motors, Q108 GMV grew at 13.6% Y/Y. In other words, EBAY Motors is becoming a significant drag on overall GMV growth.

In Q208, the drag on GMV growth will be even more pronounced. QTD, some analysts put EBAY Motors listing growth at around 6% Y/Y. Compared to overall listings growth QTD of around 24%, its clear Q208 GMV growth will take a hit from EBAY Motors.

The good news, if any, is that the take-rate on EBAY Motors is much lower than the rest of EBAY. So as long as EBAY Motors GMV growth underperforms overall GMV growth, EBAY's take-rate on overall GMV increases. In other words, Marketplace transaction revenues are much less affected by weak auto demand than GMV.

Disclosure: Long EBAY

Comments

[WAKEUP]

The good news is all for repair shops. Folks will now spend $2,000 to $3,000 to update their present car, instead of going into debt (another) $20,000 to $30,000, to replace it.

[jay dee]

Ebay Motors has benefited from the efforts of sellers like myself who sell parts for collector cars. The collector car hobby has gone through a big surge the last couple of years.

Now that Ebay has tried to strong-arm their sellers into using ebay owned Pay Pal all under the guise of protecting buyers, many sellers have stopped selling.
Ebay's spin is that mandatory Pay Pal is to protect the buyer, when in fact ebay does very little about complaints, the Pay Pal requirement is just an added revenue stream.

Many of us have very little faith and trust in internet payment methods and prefer do deal in the more cumbersome but simpler money orders and cheques which gives many of us have a greater comfort factor.

We are waiting for John Donahoe to be ousted for his underhanded and shabby treatment of the people who made ebay what it is.

You investors should visit the ebay discussion boards and see for yourselves why ebay sales are dropping off - the many large and small sellers who are refusing to sell on ebay under Donahoes dictatorship.

Thank you for reading this,
Jay Dee

[JohnPseudonym]

I have also stopped selling there, and more importantly, stopped buying there.

Ebay behavior towards Craigslists was the final straw for me. It's been 6 months since I've bought something on ebay and I don't even bother looking anymore.

I check ioffer.com first then Amazon, etc.