August 10th, 2009
Can eBay be your new car dealer and reduce GM's inventory?
EBay’s grand experiment with General Motors Co. could be a novel answer to making the auto industry’s dealership networks more efficient.
GM and eBay said Monday that they will kick off an effort to allow consumers to click and buy new cars from participating dealers in California. Typically, eBay Motors, which lures 12 million car shoppers a month, deals with used autos.
According to an eBay statement (Techmeme), the eBay-GM effort launches Tuesday. In a nutshell, eBay will serve as a point guard to move GM inventory—specifically Chevrolet, Buick, GMC and Pontiac autos–from Aug. 11 through Sept. 8. The pilot only applies to California for now.
If successful, you could project more eBay experiments like this. Why? Dealer networks for the likes of GM and Chrysler are a mess. They’re being pared down dramatically. It’s unclear whether Americans really want to buy a car from a government-owned entity—it gives me pause. And consumers are buying Fords, Toyotas, Hyundais and Hondas in the Cash for Clunkers program. Simply put, GM has too much inventory and needs eBay to cull your best offer and sell these cars.
Can eBay make things more efficient for GM? We’ll see. Online haggling for cars isn’t a new model—companies like Autobytel have been doing it for years. But eBay’s foray into new cars may be a nice way to boost revenue and make the process more efficient. Even if eBay manages to pare GM’s inventory a bit it’ll be a success.
In many respects, the eBay-GM move sounds like a nice spin on a inventory liquidation effort. If this inventory was going to move it would have already. However, eBay can at least help find the clearing price.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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