GM's eBay plan: What about the dealers?
eBay has been selling used cars for years, but laws currently prohibit direct sales from manufacturers.
GM's chief executive, Frederick Henderson, said Friday that the company is in discussions with eBay, the online auctioneers, to begin an experiment to sell vehicles in California.
Robert Harbison / The Christian Science Monitor
New York
As an example of how General Motors plans to be more adaptable, chief executive Frederick Henderson said Friday that the just-out-of-bankruptcy company is in discussions with eBay, the online auctioneers, to begin an experiment to sell vehicles in California.
While it might be an experiment for GM's top brass, eBay has been listing cars for sale for the past 10 years on its website, eBay Motors. According to eBay, more than 30,000 franchise and independent dealers, including some GM dealers, have been listing used and certified pre-owned vehicles for sale. Last year, eBay reached 3 million vehicles sold since the website started.
So, what's new?
GM may be trying to figure out how to sell new vehicles – not used ones – on the website, say auto analysts.
State franchising laws currently prohibit the sale of new cars direct from the manufacturer through auction sites such as eBay, says Jack Nerad, executive editor of Kelley Blue Book in Irvine, Calif.
"They are probably trying to figure out how to accommodate the laws in 50 states," says Mr. Nerad.
A spokeswoman for eBay, Leanne Furman, writes in an e-mail, "Dealers are held accountable to abiding to their state laws and regulations. eBay Motors provides the platform and serves as the marketplace. We do not hold any inventory or sell cars."
Since direct sales from the manufacturer are prohibited, Mr. Nerad says GM and eBay are probably trying to figure out how to allocate online sales to individual dealers. "You have to allocate and keep everyone happy with the system," he says.
This may be one reason that eBay issued a press release Friday saying Mr. Henderson's plan is still not a done deal.
