The new-car sales experiment between General Motors and San Jose e-commerce powerhouse eBay begins today in California, and both companies will be closely watching the results — particularly GM, which is hoping to increase its market share in the state.
"Dealers who are participating see this as a great mechanism to get their products and information out to people where they're doing initial shopping and looking, which is on the Internet," said Dave Barthmuss, western regional spokesman for GM.
The program, announced last month by GM, will involve 225, or 90 percent, of California dealers. Barthmuss said California was selected as the test market for the four-week trial because GM sales in the state have historically been "far below the national average," and its residents are considered tech-savvy.
"It's all about simplifying the car-buying process," Barthmuss said. "It's basically extending the dealers' reach beyond the showrooms and car lots of their brick-and-mortar buildings to the buyers' laptops and shopping in their living rooms."
The new Web site, gm.ebay.com will be available through Sept. 8, and if it's successful, Barthmuss said, GM would like to roll it out nationwide.
GM dealers already sell used and certified pre-owned cars on eBay. And plenty of dealers already negotiate car sales directly with customers over the Internet. But this is a new experiment for the automaker, which has never sold new cars on eBay, and for the first time is making its entire California inventory available to buyers. However, all car sales must go through the participating dealers.
For the next four weeks, consumers will be able to browse a selection of up to 20,000 Chevrolets, Buicks, GMCs and Pontiacs from 2008, 2009 and select 2010 models.
Vehicles will be offered through eBay Motors' traditional formats such as "Buy It Now" (where shoppers agree to pay the advertised price), or through eBay's "best offer" program (where buyers indicate the price they are willing to pay and can negotiate online with the dealer for the car).
The program is attracting a lot of attention, said Rob Chesney, vice president of eBay Motors.
"People seem to be excited about the idea that we will be expanding into new cars and allowing consumers to do things around the new purchase process," Chesney said. "You will be able to go to eBay or other GM microsites we have created and search across all years, makes, models, styles, transmissions and colors."
Consumers also will be able to determine if their car qualifies for the "cash for clunkers" rebate program — and if it doesn't, they'll be able to find out what their car is worth and how much its trade-in value would be.
Chesney said once a customer narrows down the vehicle they're interested in, they can click on a link that will show them all the information specific to that car. They can then communicate with the dealer in multiple ways, either online or via phone numbers that will be posted on the site.
He said GM and eBay have been working to get dealers the information they need about how the program will work. There will be an 1-800 number consumers can call that will be staffed by GM employees to help them through the process.
Chesney said the program is "really focused on California residents'' but since eBay is an open marketplace, "dealers will be able to manage out-of-state customers and may or may not be able to complete transactions with those folks."
He would not discuss any financial details associated with the partnership.
"The success, in eBay's view, is if we are showing consumers great deals and if they're coming back to the site and telling others about the deals," Chesney said.
Chesney said eBay will be closely monitoring the process, from how much online traffic the site is generating to how many cars are viewed by customers and what decisions they're making about purchasing the cars.
South Bay car dealers were hopeful the online program will send sales their way.
"I think it's great if it works,'' said Troy Pelzl, general manager of Gilroy Cadillac Chevrolet, "I'm enthusiastic about it."
A recent J.D. Power & Associates study found that more than 75 percent of new-vehicle buyers in 2008 used the Web during their shopping and research process, compared with 70 percent in 2007. The study also found that 2008 marked the largest year-over-year increase in online automotive shopping since 2001.