About 90 percent of the dealerships that sell General Motors nonluxury brands in California will participate in a special marketing program that enables consumers to buy new vehicles posted for sale on eBay Motors.
Starting tomorrow, Aug. 11, shoppers in California can search the online showrooms of 225 Buick, Chevrolet, GMC and Pontiac dealerships for new vehicles.
They can ask questions about specific vehicles, negotiate prices and arrange financing online, Mark LaNeve, GM vice president of sales, said on a conference call with reporters today.
LaNeve said the program is designed to raise the profile of GMs vehicles in a region where its market share lagged even before the current recession.
GMs market share in California is roughly 13.0 to 13.5 percent compared with 19 percent nationally, LaNeve said. The program runs to Sept. 8 but likely will be extended to other markets, he said. GM will support the program with an advertising campaign that includes TV and print.
Our key focus is to sell our great lineup of vehicles, and where we cant sell them, expose more customers to them and to continue to improve the perception of our products in line with the reality of the products, which we know is world-class, LaNeve said.
Cadillac is not participating in the program, LaNeve said. The luxury brand wants to see how the first phase of the program works and will likely join in later, he added.
Unique way to bring value
Rob Chesney, vice president of eBay Motors, said during the call that his company worked with individual dealers who sell new vehicles on the site but that this is the first time the site has partnered with a manufacturer.
Almost 12 million unique users visit eBay Motors a month and about 30,000 dealers list vehicles for sale.
Our customers care about value, and this is a unique way to bring them value, great deals and they can do it in a format that they havent been able to use for the purchase of a new car, Chesney said.
The vehicles will be listed for sale with fixed prices that GM offers suppliers along with friends and family members of its employees.
Consumers can purchase at that price or negotiate a price online. How much of the transaction that gets handled online is between dealers and customers and can include money wire-transfers and vehicles delivered to someones home, LaNeve said.
Were taking advantage of the way people want to shop, LaNeve said.
LaNeve said GM will gauge the success of the program by measuring how many people use the site, how they make purchase offers, and how they actually buy vehicles. The company will also look at how many leads are generated from the program and get feedback from dealers, he added.
LaNeve said GM officials will conduct a 10-city tour over the next six or seven weeks visiting GM dealers and providing them with updates about the program.
He added: We would roll it out upon dealer request, but were not going to put it in any market where the dealers are uncomfortable or dont feel that theyre ready for it.
California, which has been dominated by import brands over the past several years, is the most populous U.S. state and the single largest market for new vehicles. Car sales have been hit harder in California than in other states over the past quarter because of the severity of the housing market slump there.
GM, which lost $82 billion over the past four years, is trying to revamp its image and win back consumer trust after completing a bankruptcy restructuring steered by the Obama administration.
GM has lost market share for years to import brands led by Toyota Motor Corp., now No. 2 in the U.S. market with a 17 percent share.
A recent J.D. Power & Associates study said more than 75 percent of new vehicle buyers in 2008 used the Internet during their shopping and research process, compared with 70 percent in 2007.
eBay hurting, too
The decline in U.S. auto sales to their lowest level in nearly three decades this year has hurt automakers, parts suppliers, dealers and virtually every company in the automotive sector, including eBay.
The online auction company's gross merchandise volume -- a data point closely watched by analysts that measures the total value of goods sold on eBay -- has been hit in recent years as the downturn in auto sales continued.
In the second quarter ended June 30, the company posted a 32 percent drop in vehicles gross merchandise volume compared to the year-ago quarter.
Reuters contributed to this report