September 1, 2009, 12:00 AM

General Motors partners with eBay in a bid to drive auto sales onto the web

Californians who want to buy a GM car or truck can turn to the web for just about their last stop on the way to a purchase because of deal the auto marker has with eBay.

Californians who decide on a GM auto can make the Internet just about their last stop because of a new arrangement General Motors Corp. has launched with eBay Motors that gives consumers better ways to shop and negotiate for a new car on the web.

The test program, set to run through Sept. 8, allows car buyers in California 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. If the program proves successful, GM may roll it out nationwide.

While the final purchase and vehicle pick-up still must occur at a dealership or at a meeting between the dealer and buyer, the General Motors and eBay Motors partnership is the closest thing yet to letting consumers buy a new car or truck entirely online. The new web let buyers research and view various 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.

General Motors is using the site to jump-start stagnant vehicle sales and as a trial balloon for more national e-commerce initiatives. The site also lets shoppers post a down payment, access a buyer`s check list, research and compare vehicles, determine trade-in values, and find out if they qualify for the federal government`s Cash for Clunkers program.

"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.

However, an early analysis by automotive research firm estimates that prices are on average 2% higher than average market price. On a $25,000 vehicle, that equates to about $500. "Marketers need to connect all touch-points a consumer is likely to check," says CEO Jeremy Anwyl. "In this case, GM offered a price that is above market price and that could create friction for those trying to close a sale."

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