Monday, August 10, 2009

GM sells new cars on eBay?

GM announced today that it will test a trial pilot to sell new cars on eBay. Most of the GM dealers in California have signed up for the trial, which will result in approximately 20,000 new listings of GM cars for sale on eBay. The idea is that individual dealers will independently set the "buy-it-now" price, which is suppose to reduce the burden and stress of negotiating at the dealership. While this is a good concept, the key here will be whether the "buy-it-now" price is competitive in the marketplace and/or whether buyers will feel like they can get a better deal by going into a dealership and negotiating. Some people will complete the eBay purchase via "buy-it-now", but my guess is there will be a lot of people that will search for the lowest "buy-it-now" price for a particular GM model, then print that page and walk into a dealership to haggle for additional discounts. Just like most used car transactions on eBay, where the listing serves as a marketing tool and most transactions are negotiated further after the listing has expired, the new GM/eBay program will serve as a good marketing tool for GM's new cars but the end result will be a similar outcome in that further negotiations will likely take place well after the auction has ended.

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