August 10, 2009, 12:00 AM

GM and eBay drive automotive sales with new Internet initiative

It stops just short of letting customers complete the transaction online, but a new arrangement GM launches tomorrow with eBay Motors gives car buyers in California more ways to shop and negotiate for a new vehicle over the Internet.

It stops just short of letting customers complete the transaction online, but a new arrangement General Motors Corp. launched today with eBay Motors gives car buyers in California better ways to shop and negotiate for a new car over the Internet.

Under the new arrangement, which runs from tomorrow through Sept. 8, car buyers in California will be able to use a new section on eBay Motors, the automotive arm of eBay Inc., to research and negotiate deals online for new Chevy, Buick, Pontiac and GMC cars, trucks and sport utility vehicles available at more than 225 participating dealerships in California.

The final purchase and vehicle pick-up still must occur at a dealership or at a meeting between the dealer and buyer, but the General Motors and eBay Motors arrangement is the closest thing yet to letting consumers buy a new car or truck entirely online. The new web site-GM.eBay.com-will let buyers research and view different makes and models of new cars, negotiate a price with a participating dealer using eBay Automotive’s auction program and arrange and qualify for financing.

The web site, which General Motors is using to jump start stagnant vehicle sales and as a trial balloon for more national e-commerce initiatives, also lets shoppers post a down-payment, access a buyer’s check list, research and compare vehicles, determine trade-in-values, and determine qualifications for the federal government’s cash for clunkers program.

“As the dealer showroom expands from the parking lot to the laptop, this makes it easier for a customer to browse available new-car inventory, make an offer, buy it now or send a message asking for more information from a dealer-all at the customer’s convenience,” says General Motors vice president of U.S. sales Mark LaNeve.

But the new General Motors relationship with eBay still doesn’t allow consumers to complete the transaction entirely online.

“Customers can’t complete a purchase online, but can use the buy-it-now feature to negotiate a price with the dealer and use a credit card or other payment method to make a down-payment,” says a General Motors spokesman. “Depending on the dealer, a customer could also arrange to have the car delivered to her home, where she could complete the purchase transaction in person without ever having to go to the dealer.”

General Motors is starting the program in California, but will roll out the program nationally, the spokesman says. “If all goes well, we’ll go nationwide starting as early as Sept. 8,” the spokesman adds. “We could also cancel if things don’t go well, but we fully anticipate this to be very successful. We’ve used eBay for certified used vehicles nationally, and that has been very successful, so now we need to see if we can be successful with new-car sales.”

The new General Motors and eBay Motors initiative is the clearest sign yet that big automotive manufacturers are getting closer to the day when they will have to offer customers that prefer it an entirely online option to purchase a new car, truck or sport utility vehicle. With the nation still in a recession, the number of dealers dwindling and new car sales at their lowest point in recent memory, manufacturers need to reach out to customers with more e-commerce options, say automotive industry analysts.

“Automotive manufacturers will continue to evolve their e-commerce initiatives and we are closer to more all Internet-only ways of purchasing a vehicle,” says Michelle Krebs, a senior analyst with automotive research site Edmunds.com. “This is especially true of General Motors, which must be doing everything it can now to sell more metal. The arrangement with eBay gives them access to a lot of eyeballs.”

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