GM marketing executives starting with Bob Lutz must prove they can move metal.
General Motors Company will today stop selling new cars and trucks in California online through eBay. The move comes as a surprise given previous executive remarks on the experimental program. During a press conference on September 1, GM said its nascent California eBay project resulted in 4,000 shoppers who negotiated a new vehicle price in the first three weeks of the program.
GM had extended the eBay program through the end of September. Retail sales in California during August when the program began were up 63% — roughly three times the national increase in sales. However, the CARS program, aka Clunkers, was also an influence on August results.
“Once the California program winds up, we’ll take a look at the results and determine if we should roll it out nationally later this year,” LaNeve said then.
Well, the results are apparently not good enough for the company, which is struggling to maintain its market share after decades of decline.
A GM spokesperson said the current national “May the Best Car Win” marketing effort is the company’s current area of concentration. The initial results of that controversial campaign, which offers a 60- day money-back guarantee and has the Chairman pitching it on TV, will not be known until September sales are reported tomorrow.
Year-to-date GM sales are off 35%. GM dealers in the United States during August delivered 246,479 vehicles, the company’s highest total in 2009. The August total, when compared with a very strong sales performance in August 2008 from “an Employee Pricing” promotion then and lower fleet sales this year, was down 20%. Overall, retail sales were down 17% while fleet sales declined 29%.
GM said the eBay program resulted in 1.5 million unique web visitors and it produced about 15,000 leads for dealers.
More than 225 GM dealers in California participated in the pilot program. GM says that shoppers viewed as many as 20,000 new GM vehicles at “very competitive prices.”
Vehicles were offered through eBay Motors’ standard formats such as “Buy It Now,” where shoppers agree to pay the advertised price, and “Best Offer,” where buyers indicate the price they are willing to pay and can negotiate online with the dealer.
“Our partnership with GM continues on several fronts, including the sale of Certified Pre-Owned vehicles and we are exploring additional opportunities to partner on new car sales. This program succeeded in driving awareness of eBay Motors as a destination for new vehicles,” said Rob Chesney, vice president of eBay Motors. “It also confirmed our ability to innovate by building out a custom program that could quickly deliver a high volume of quality leads over a short period of time across multiple automotive brands.”
“eBay Motors will continue to test, pilot and implement new car initiatives with OEMs, dealers and other third-party companies as part of its ongoing goal to offer consumers a wide selection of new cars coupled with an easy and convenient new way of buying,” Chesney concluded.
A recent J.D. Power & Associates study said more than 75% of new-vehicle buyers in 2008 used the web during their shopping and research process, compared with 70% in 2007. The study also found that 2008 marked the largest year-over-year increase in online automotive shopping since 2001.