GM to start eBaying new cars

 

Gallery

By Reuters

Posted on 11 Aug 2009 at 10:55

General Motors and eBay are launching a test program allowing consumers to negotiate with dealers to buy new cars online.

Around 20,000 new cars will be available on the site, which will allow consumers to compare pricing across models and participating dealerships, negotiate prices, and arrange financing and payment. Consumers can agree to pay the advertised price or indicate the price they are willing to pay and can negotiate online with the dealer for the vehicle.

The venture marks a radical departure from the way cars have traditionally been sold and is intended to help GM recapture lost market share a month after it emerged from bankruptcy. GM intends to cut its US dealerships by more than 40% to 3,600 by the end of 2010 as part of its efforts to return to profitability, and the online marketplace will provide the car maker with a cheap new outlet.

The scheme builds on a recent J.D. Power & Associates study which claims 75% of new vehicle buyers in 2008 used the internet during their shopping and research process, compared with 70% in 2007.

The program will be trialled in California and will run from 11 August through 8 September. GM intends to expand the program nationwide if the pilot helps it reach new customers and gain market share.

"It's a critical market for us and critical time for the company. Anything we can do to provide exposure to the products where we are underserved is clearly good news," says GM's sales chief Mark LaNeve.

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.