GM: Sell Cars Like Dell Sells Computers

General Motors and eBay are teaming up to begin the end for the dealership network by offering to sell its inventory of new cars online.

The deal is being tried in California and represents a coup for eBay which gets commissions on every transaction completed. This is the online motherload if it works.

If is the operative word because the experiment, for a few weeks, must involve the cooperation of GM's remaining dealers who are to be connected by eBay with buyers.

Some 20,000 cars on lots were put on the eBay site this week.

Some dozen global car manufacturing giants are scouring the world for a winning business model and this is it. First, second and third prizes will go to the care consortia that sells automobiles just like Dell sells computers -- viewed in generic showrooms with test driving capabilities; offered online only; manufactured using an international supply chain; assembled near customers; bought and financed online; delivered within days to buyers' doorsteps and warranty services provided independent contractors.

It looks like GM gets it, but the proof will be in the pudding. Experts blog that online sites to sell cars have run into difficulty because the dealers won't negotiate digitally but want potential buyers to come into their showrooms. This defeats the entire purpose and forces buyers to continue to pay more for a car than they should in order to cover dealers' overheads.

This could be, if it works, the new new business model for vehicles.

Comments

[KillTheMessenger]

06:51 PM on 08/14/2009

Wait... I thought Dell was making money on selling computers... while GM was generally known to make a loss at selling cars. So how is that the same?

:-)

OK... seriously. There are only two possible outcomes here: either GM will screw its dealers or the dealers will screw GM. OK... maybe there is a third... they will screw each other. And no matter what happens, the customer will always be screwed.

[CyCarConsulting]

04:58 PM on 08/13/2009

Where is the buying experience? I was always told people like to touch things,especially cars. View the sparkling paint, sit inside, smell the leather, grab the steering wheel,play with the gadgets, you know it builds excitement. Especially on the new GM cars that are being introduced, one would think that to be the case. It seems to be a failure in the making if you are starting out with your main concern being price. That is the normal result when using an ebay type system. A bunch of lifeless drones sitting on the other end of the computer searching for the last $50.00 off a product they really know nothing about. So GM are you selling the sizzle, or wholesaling lots number 1,2,3, and 4?

[drymartini1]

04:26 PM on 08/14/2009

if you can buy a home theater online, you can buy a car online. if you want to test drive one though, there should be a 1 dealer in city (paid by the car compnany) to maintain a very lean inventory just for that purpose and servicing.

[Chad Albert]

05:03 PM on 08/12/2009

And what exactly do I do for service? Somehow I don't think I'd be able to simply call up FedEx and simply say come take this junk back......

[drymartini1]

04:26 PM on 08/14/2009

this is just a thought (not a reality it).

The car companies should just pool money to have 1-2 showrooms in each city just for test driving cars (very very lean inventory) and for servicing.

all car buying switch to online and buy it there. no need to keep inventory at all (very costly affair).

get rid of most of the dealerships and save a lot of money for not carrying tons of inventory, employees, overhead......

winners all around.

[moleif]

04:00 PM on 08/12/2009

Apple is a better model--direct on-line sales and build-your-own function, plus wholly-owned retail stores for kicking tires and checking out new gear without sales pressure or bartering.

[drkazmd65]

02:44 PM on 08/14/2009

That actually sounds a lot like Dell's sales model too moleif. My wife & I are loyal(-ish) Dell customers and have now bought 4 computers over the last 7-8 years, built to specifications (within reason), financed and billed online, and shipped directly too us.

I would love to order a 'new' car to specifications online. In fact, I have recently been at a Ford site where they are pre-hawking (no sales pitch yet) and outlining the options available for a 2011 Ford Fiesta. I figure the Fiesta is probably about what I will want in a year or two when I start to think about replacing my trusty Mazda.

It will likely be one of the major ways this gets done in the future for all the car manufacturers.