GM May Trade In Clunky Sales Model if eBay Gamble Works

eBay (Nasdaq: EBAY) and General Motors (NYSE: GM) announced Monday that 225 of the carmaker's California dealers would begin selling new cars through the e-commerce powerhouse in what appears to be a limited promotion that could nevertheless presage a more permanent, national approach to selling cars online.

Sales will begin Tuesday and go through Sept. 8, the companies said. It's not clear whether eBay sales will continue after that date, or whether GM is considering going national with the program.

Neither eBay nor GM media relations officials returned telephone calls and emails seeking comment on the arrangement.

Analyst: Kudos to GM

The move is a bold step in GM's self-professed reinvention and could lead to a new way to buy cars nationwide if both consumers and dealers take to the concept, suggested Thilo Koslowski an automotive industry analyst with Gartner (NYSE: IT).

"I give credit to GM," Koslowski told the E-Commerce Times. "This is a great move by a company that in the past hasn't been all that creative in selling new vehicles."

Already, other auto manufacturers who are clients of Gartner's research services have inquired about the plan, he said, indicating auto industry executives are watching the experiment closely.

The initiative comes at a critical juncture for GM and the U.S. auto industry, which has been severely battered by the recession. GM, backed by billions of dollars in taxpayer money, recently emerged from a lightning bankruptcy case promising to reinvent itself for a new age.

eBay has allowed the sales of used cars for some time, and some dealers have independently experimented with new car sales on the site.

Details of the Program

The GM program involves 225 California dealers and could involve an inventory of up to 20,000 new 2008, 2009 and 2010 model cars at any given time, according to the companies' release.

Shoppers will be able to pay the advertised "Buy It Now" price, which Koslowski said should come in under the manufacturer's suggested retail price, or they can submit an offer to a dealer for consideration.

The site, gm.ebay.com, will also allow shoppers to compare pricing across models and dealerships, get trade-in values, and check on eligibility for the taxpayer-funded "Cash for Clunkers" incentive program.

Defining Success

The experiment could form the successful basis for a new model of car shopping, Koslowski said -- but only if dealers stick with the Web 2.0 experience and don't try to introduce high-pressure sales tactics into the mix.

"If consumers submit a price and they get a response back saying, 'Why don't you come down and we'll talk about it,' that's not going to work," he remarked.