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GM Vice-Chairman Bob Lutz
We're guessing there will be a reserve on GM's eBay auctions

As part of the government-driven automaker's bid for revival, GM will be switching to selling some vehicles online, an industry first.

Additional information on the drive was just released.  The trial deployment will start in California.  In total, 225 of California's 250 GM dealers will be offering Buick, Chevrolet, GMC and Pontiac vehicles for sale on a co-branded page of eBay Motors, the site's auto marketplace.  Auctions will start September 8 and vehicles will be searchable both from the eBay and eBay Motors homepages.

While many dealers have sold vehicles on eBay in the past, the new program will mark the first time an automaker has officially endorsed and promoted online sales of new vehicles on eBay.  For eBay Motors, it marks a departure from the site's traditional bread and butter -- used car and parts sales.

The site includes a tool to help customers figure out whether they're eligible for thousands in "cash-for-clunkers" stimulus money.  Just like at the dealership, customers will have the option of paying a fix price or haggling with a dealer. 

EBay Motors Vice President Rob Chesney says California is the ideal trial deployment for the program, given the state's tech-savvy population.  GM says the state is ideal, as it's one of the states the company is targeting for sales improvement.  The program was first announced in July, with California being mentioned as the likely trial state.  No official deal had been revealed, though, until this week.

GM Vice-Chairman Bob Lutz says the online sales won't cut out dealers.  He states, "There is no model which can legally permit automobile companies to sell directly to the customer.  That’s just prohibited by law in almost all states.  But what we hope to do by this is…the dealer puts up the car on that Internet auction and then the customers can bid on them. Once the bidding is successful, the customer then contacts that dealer for the pickup…Then there’s always one issue that can never be dealt with on an Internet sale, and that’s the question of the used car that the customer wants to trade in."

"Every 10 or 15 years or so, and I've been in this business since 1963, in sales and marketing, some genius invents a system that’s going to eliminate car dealers.  Everybody always gets excited an sometimes Wall Street puts a lot of money into it and it always fails because the franchise independent retailer is always the way to go.  It always works best."

Mark LaNeve, GM's vice president of U.S. sales believes that the site will help provide customers with a greater sense of security when buying vehicles online.  GM would not reveal specific financial details of the partnership.  However, GM spokesman John McDonald says the partnership should be profitable for both companies and could expand across the country, if successful.





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