GM’s decision to sell new vehicles in the US via the internet auction site eBay will not affect logistics and distribution activity according to the company. “It only affects the front-end transaction and marketing,” spokesman Dan Flores told Automotive Logistic, “customers will still take delivery of the vehicles through a dealer.” (Though, with plans to reduce its dealership by 42% to 3,600 by the end of 2010, taking delivery could mean a longer walk for some customers).
The new arrangement with eBay, which began across 225 dealerships in California yesterday and could be rolled out across the US by September, differs from the standard practice on eBay Motors whereby the buyer makes the arrangements and pays the costs associated with picking up or shipping the vehicle. Delivery options are negotiated with the local GM dealer.
It also differs from a typical eBay sale in that vehicles will not be auctioned to the highest bidder. Instead they will be listed at a “buy it now” fee equal to GM’s supplier price. Shoppers also can submit a lower offer that the dealer can accept or reject.
GM dealers already use eBay to sell used vehicles and list their inventories, but this latest initiative means it will be the first automaker to sell new vehicles on the site. GM and eBay have set up a dedicated portal, http://gm.ebay.com, to facilitate the sales and up to 20,000 vehicles will be listed on the site at first said the carmaker.
Along with the reduction of dealerships and brands that GM is pursuing, the new initiative is an attempt to regain market share in US, which currently stands at 13.5%, significantly below its 20% national average. The company is struggling to return to profit after $88 billion in losses since 2004.
GM first announced its plan to sell cars on eBay when it came out of bankruptcy protection last month.
In other news, the carmaker’s GMAC Financial Services has begun offering new leasing programmes for select GM vehicles in 45 states. Last year GM saw its leasing dramatically curtailed and lost sales as a result. The return of the leasing business means it can again sell select cars and trucks to consumers nationwide with lease deals, a move that could boost sales.
