General Motors Co. will let customers buy cars and trucks online from some California dealers through EBay Inc., the operator of the most-visited U.S. e-commerce Web site.
Chevrolet, Buick, GMC and Pontiac brands will be available at gm.ebay.com starting tomorrow through Sept. 8, GM and San Jose, California-based EBay said today in a statement. More than 225 dealers will participate, the companies said.
Chief Executive Officer Fritz Henderson will use the new venue to boost sales as he shrinks the ranks of U.S. dealers by about 42 percent to 3,600 by the end of 2010. Those reductions are part of a plan to return GM to profit after $88 billion in losses since 2004.
"Exploring new online distribution alternatives is a good idea as GM downsizes its brick-and-mortar distribution system," said Laura Martin, a Los Angeles-based analyst at Soleil Securities Group Inc. She rates EBay shares as "hold" and doesn't own any.
GM anticipates keeping the program beyond Sept. 8, the automaker's U.S. sales chief, Mark LaNeve, told reporters on a conference call today.
The automaker chose California because that market has been "incredibly hard-hit by the recession," LaNeve said. "We really think it needs a shot in the arm."
GM's market share in California is about 13.5 percent, less than the 19 percent nationwide, LaNeve said.
Negotiation Option
Car shoppers can use EBay's "buy it now" option to make an immediate purchase or negotiate a price. All sales close at the dealership when the buyer picks up the vehicle, he said.
"There's clearly an appetite on behalf of consumers to be able to negotiate price and purchase vehicles online," EBay Motors Vice President Rob Chesney said on the conference call. The arrangement is EBay's first involving new vehicle sales, the companies said.
Chesney declined to say how much EBay receives from each sale. EBay collects a $125 fee for listings that end in a sale for its used-car sellers, according to its Web site.
EBay fell 6 cents to $22.49 at 4:00 p.m. New York time in Nasdaq Stock Market composite trading. The shares have gained more than 60 percent this year through today.
Detroit-based GM reorganized in a U.S.-backed bankruptcy and left Chapter 11 on July 10 with the Treasury as its majority stockholder.
