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.
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