GM ends car sales pilot with eBay

General Motors' pilot program to sell cars on eBay has reached the end of its road. The automaker said it's concluding the program as scheduled, effective Wednesday.

Launched on August 11, the eBay Motors pilot program offered California auto buyers new GM cars, which they could either negotiate for or "Buy it now" at the discounted selling price.

(Credit: eBay Motors)

Initially set to expire September 8, the program was extended by GM until the end of the month.

The financial success of this pilot may be difficult to gauge. Earlier reports suggested that few sales were being generated. But GM discovered that tracking actual sales was more challenging than expected.

"Nobody's ever done this before, to sell new cars on eBay," said GM spokesman John McDonald. "So the whole point of the pilot was to learn some lessons. And one of the lessons we learned is that it's very difficult to track sales if they're not made directly through eBay. Unless you can tie a sale to an eBay interaction, it's difficult to come up with sales numbers. So we learned that we have to find a better way to (track sales.)."

The company has been encouraged by the figures it was able to track. Around 16,000 vehicles were listed online for the pilot, with more than 225 dealers participating. GM's eBay Motors site attracted 1.5 million visitors during the six-week period, said McDonald, with a total of 1.9 million searches conducted for vehicles. More than 15,000 leads were generated for dealers from potential new car buyers.

"The real intent of the program at the time and the reason we did it in California was that we wanted to raise awareness and consideration of GM products among people who wouldn't typically shop GM," said McDonald. The company wanted to target people who wouldn't normally go to Chevy.com or Buick.com, but would go to eBay to shop.

"Being the first manufacturer out there to put new vehicles online, I think in just that six-week period, it shows you that there were a lot of people looking at these vehicles who weren't looking at those vehicles before," said McDonald.

Unlike the typical eBay seller, GM wasn't auctioning off vehicles at bargain-basement prices, which may have dissuaded some buyers. "We're not fire-selling vehicles on eBay," explained McDonald. "There's a certain amount of user education in that, and a certain amount of dealer education."

A story in Wednesday's Wall Street Journal (subscription required) reported that some dealers found they wasted time pouring through unrealistically low-ball bids that would never result in an actual sale.

McDonald said he understands where the dealers are coming from, and that's something GM can learn from if the company decides to roll out the program nationally next year.

"But the interesting thing about the comment is that they're interacting with customers who didn't even talk to them before," said McDonald. "Is it an offer that you may not be able to take? Probably. But are you talking to someone who wasn't even looking at GM products before? Yeah, you are. So now you've established a contact, and that's a big part of what we were trying to do with the program."

McDonald said a number of dealers liked the chance to extend their showrooms online. But reactions varied. Dealers who already used the Internet as part of their business knew how to work with the program. Dealers who weren't already online ran into more difficulty.

For its next step, GM will review the customer and dealer feedback and the lessons it learned to see if this program can fit in with the company's marketing plans moving forward. McDonald is optimistic. "We'd love to work with eBay next year to do something on a national level," he said. "But what that looks like and what the timing would be will depend on the results of this test."

[Pete Bardo]

Imagine that! GM has the same problems as everyone else when it comes to selling online.

[jc364]

I can't imagine buying a new car online without any sort of test drive, or at least being able to sit in it and get a feel for the amount of room it has. Are dealerships supposed to let you show up at their physical location, drive their cars, and watch you leave as you say, "I'll buy it online"? Wouldn't that annoy salespeople that are trying to make a sale? Wouldn't customers be pressured into buying the vehicle at the dealership?

[ikramerica--2008]

That is exactly how the business model of the successful automakers will have to be in the future. This stupidity of buying inventory in advance, then trying to unload it is stupid. Especially because most dealers make their money on used cars and service, not new car sales.<br /><br />Dealers should simply be "Service and Test Drive Facilities" for new vehicles. The purchase and financing should be completed through an order system that can be completed online or at the dealer (but transparent to the customer, not behind some closed door like it often is now), with everyone having access to a regional distribution center full of inventory. Like in Germany, customers can either pick up their car at the regional delivery center/factory (including a nice lunch and orientation), or have the car delivered to their homes. Dealers would be authorized by the manufacturer to make favorable deals on trade-ins via rebates if the manufacturer wants, but otherwise they are used car dealers (thus not trying to "lock in" customers with low trade values in exchange for favorable new car deals).<br /><br />This will take cost out of the system, remove sleazy salesmen and sales managers (let them sell used cars where they belong), allow more customers access to the exact model they want, allow the manufacturer to better gauge what features are really desired (as opposed to dealers ordering them and then forcing unwanted features on customers), reduce excess inventory, and allow for more, smaller service centers in remote areas that otherwise can't exist because they can't afford to keep the new car inventory on the lot.

[rakker91]

ikramerica, Amen and very well stated.

[baconstang]

Back in '68 I went with my mom to pick up a VW in Wolfsburg at the factory. We drove it around and had it shipped back to the states.

[chrisx1]

Who says there would be no test drive? <br />People trest drive and walk away every day. I don't buy every car I test drive. I might be considering 2 or 3 or 4 different competing vehicles, so I won't be pressured in buying after only test driving the first car. <br /> <br />If it is a vehicle available for rent, you can pay to rent one and drive it for hours or days and never see a sales person. Better than a 3 minute test drive around the block anyway.

[b_baggins]

@ikramerica.<br /><br />Right. Because that model worked so well for both Dell and Gateway. You know, have a store where you could check out the product, but not actually buy it...

[danielwsmithee]

The only way I could see online sails of cars work is if dealership networks work completely redesigned. Dealerships would become showrooms. Commissions for salesman would have to be eliminated. All cars would have to be build-to-order. You could go to a showroom, get a feel for the car and the available features. Then a salesman could walk you through submitting your online order for your car just the way you want it. Two-three weeks later you car shows up at your door. <br /><br />That is an experience I would enjoy, the only car company that does anything close to that is mini that I am aware of.

[Sausagebiscuit]

One problem, people want instant gratification. We are used to buying the car and taking home the same day. No, not everyone takes same day delivery, of course, but I'm sure a majority do. Instant gratification, what a wonderful thing.

[baconstang]

I've yet to see sails on cars, online or offline.

[bridge solution]

think saturn....the way it started. <br /> now add interfacing the dealer's laptop with the order flow on the line.<br /> stick a thread over to gmac etc into the mix. <br /> and it's done.<br /> now the question is:<br />do the margins gained by disintermediating go to dropping the price or increasing exec bonsuses?<br /> which choice is "the american way"? <br /> and what happens when japan, china, korea, india, germany, etc. take the other fork in the road?<br /> my answer? ford gets forked.

[Been_there_Saw_it_before]

My first car was bought the old-fashion way. I went to a dealer, arranged the options I wanted, waited three weeks, and picked up the car. Unfortunaly, it took FORD about 18 months to finish building it and working the warranty issues, which included four rear-end differentials. <br /> <br />The last three cars were bought the new-fashion way. I decided what I wanted, went letters, emails, or FAXs to about ten dealers in the surrounding area inviting them to make me an offer. The interesting part was that most of the bids were centered around a high average and a low average, with a big gap in between. Maybe you can figure out why, I could not.

[jsnowbordr47]

I think this program shows lots of potential. Especially in the area of showing inventories online in a single location. While many GM dealers currently have current inventory listings on their websites, you still need to go to each dealer website to check the inventory.<br /><br />But with this type of program say if I'm trying to find a Cadillac CTS-V in Maroon or a Chevrolet Malibu LTZ in Maroon but with a 4 Cylinder engine, I can do my search on a single website and get results for all the dealers in my area that have the cars with the specs I'm looking for.<br /><br />And this program does create a dialogue between GM and consumers who would have never taken the time to drop by a GM dealership.<br /><br />And what Danielwsmithee said is a very good idea. Have people first be drawn into the showroom from the website, and once they get a feel for the car are able to complete the order online (for the specific car on the dealer lot you want) either in the convenience of their own home or at workstations at the dealership. All without having to deal with a pushy salesman.

[tektaktyks]

screw cars,im bidding on the grandma

[baconstang]

She may be your grandma, but she's also your sister!

[sharmajunior]

If only they could give me free shipping and no tax with the bid on their car starting from $ 0.99......then it would have generated some trackable sales.

[gybognarjr]

GM could not figure out how to make profit on cars selling in showroom for years. They can't even make competitively priced, high quality and attractive and good cars, buyers want to own. By associating with eBay and the Obama administration to become a Government Motors, they are exactly where I would like to see them. On the way to the junkyard.