General Motors has announced that it is terminating sales of its vehicles on EBay. The announcement came just six weeks after GM and the world’s largest online auctioneer launched a pilot program limited to the automaker’s California-based dealer network.
Neither GM nor EBay would disclose the results of the pilot program but participating dealers claim that the pilot resulted in few new car sales and fell short of what some were hoping would revolutionize the way automakers market their vehicles. California New Car Dealers Association president Peter Welch, however, proclaims the pilot a success. “It was not a successful program,” he said, “Unfortunately, I’m not sure whether their motivation was to sell cars or just create buzz.”
The program reportedly generated 1.5 million page view and 15,000 sales leads to GM dealers across the state and GM spokesman John McDonald said, “I think it brought a lot of awareness to consumers in California.” Despite the heightened awareness, actual sales numbers were apparently not enough to convince the automaker to roll the pilot out on a nationwide basis as had been anticipated.
Instead, GM will concentrate its resources on the new advertising campaign that offers buyers a money-back guarantee for up to 60 days from the date they purchase certain new GM vehicles according to McDonald.
Although GM and EBay declined to disclose sales numbers, The Los Angeles Times reviewed EBay auction information which is readily available on the Website and found that in the last two weeks of the program, participating dealers made only 13 sales on more than 21,000 listings. That number, as both EBay and GM are quick to point out, may not include sales that originated through online negotiations but were finalized at in person at the dealer’s location.
During the six week pilot program, sales manager Greg Hewett of Marvin K. Brown GMC-Buick in San Diego says his dealership sold two vehicles, a Buick Enclave and a GMC Sierra through EBay. Although he was grateful for the additional two sales, he said the program did little in the way of generating leads.
He said, “We didn’t have many people coming into the store, and the offers being made were rather low.” He also criticized the program for leaving dealers little opportunity to sell add-on options. However, he said, “Any sales promotion that brings customers is a good thing.”
The pilot program, which was announced the same day GM exited bankruptcy, generated a lot of press for the automaker and early indications were that it was achieving its desired goals. GM extended the length of the pilot beyond the planned September termination date and claimed that it had generated 4,000 negotiations between interested online shoppers and dealers. Some speculated that the pilot would herald in a whole new era in automotive marketing. However some prospective buyers complained that the auction process made an already-confusing process even more confusing and difficult.
Cal West said that he finally purchased a Pontiac Solstice through GM’s EBay listing, but not before bidding on, and winning, six separate auctions. In each instance, however, the dealers refused to honor his winning bid price. West said, “I think even the dealers didn’t understand the program.”
Finally, after lengthy negotiations a dealer in San Diego (West lives in northern California) accepted his bid amount of $30,700.
GM’s McDonald said that the automaker has not completely ruled out future attempts at online selling and indicated that such efforts could resume as early as next year.
According to George Peterson, president of AutoPacific marketing and consulting, online auto sales will play an increasingly large role in automaker’s distribution chains in the future but feels that it may be a concept whose time has not yet arrived.
“GM is to be complimented for trying something new,” Peterson say, “But frankly, I don’t think anything is selling right now.”