GM Gives Up Selling New Cars through eBay

Posted 09/30/2009 at 5:37am | by Paul Lilly

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You'll have to kick it old-school and visit a dealership the next time you plan to buy a vehicle from General Motors. That's because the auto maker is puling the plug on its seven-week experiment of selling new cars in California through eBay, the online auction site.

As reported by The New York Times back in August, the eBay venture was considered a "crucial part of GM's effort to return to profitability after five years of heavy losses." Mark LaNeve, GM's vice president for U.S. sales, said the auctions would be attractive to a customers who wish to skip the whole negotiating process, but GM quickly found the opposite to be true. Vehicles were given a 'Buy-it-Now' price equal to GM's supplier price and potential customers could submit a lower offer. Not surprisingly (except to GM), dealers reported receiving low-ball offers. Welcome to eBay.

Had the program succeeded, eBay said it would try to expand it nationally and was open to working with other auto makers. But with GM dealers saying the online marketplace didn't boost sales, eBay may have a tough time drumming up interest from others.