Buicks and Chevys and Cadillacs -- oh, my!
General Motors is turning to eBay (Nasdaq: EBAY) as an outlet to move the cars collecting dust on its dealer lots. Most of the GM showrooms in California will be participating in the trial, starting tomorrow.
Selling cars through eBay is nothing new. This wouldn't be the first time that visitors checking out a Gilligan's Island lunchbox are a click away from bidding on an Escalade. eBay Motors is a major contributor to the online marketplace, at least in terms of gross merchandise value.
However, most of the cars available on eBay are used cars. The roughly 225 participating dealers will be listing their new wheels this time.
This is a logical move, with so much inventory to clear out. It's also one step short of having Overstock.com (Nasdaq: OSTK) on speed dial. But I wonder how the folks working the showroom are taking this. Local dealers will always be necessary for fulfillment, maintenance, and test drives, but won't this eventually eat into commissionable car sales? Surviving dealers may be getting a piece of the action now, but isn't GM just one step closer to becoming the Dell (Nasdaq: DELL) of automakers, by selling directly to the end user and eliminating the final layer of markups?
Companies have been using the Web for years to move new cars. Autobytel (Nasdaq: ABTL), the media-owned Cars.com, and Internet Brands' (Nasdaq: INET) CarsDirect are popular sites with potential car buyers. Educated consumers no longer need to head to the local lot for a case of sticker shock.
Did it take bankruptcy, stalled plants, and shuttered dealers to force a humbled GM to sell new cars alongside Beanie Babies and Pez dispensers? Does it matter, really? If it works, expect Ford (NYSE: F), Toyota (NYSE: TM) and others to follow suit.
GM's leading the way, Believe it.
More items in the eBay bid basket:
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