The auto industry, an "old economy" basket case in desperate need of 21st century ideas, is finding out first-hand what does and doesn't work when trying to sell online.
General Motors Co. has
pulled the plug on its much-ballyhooed experiment to sell cars on eBay, calling the seven-week program a success but suspiciously offering no sales figures. The automaker boasted 1.5 million visits to its special section on eBay Inc.'s (NASDAQ:EBAY) Web site, but it seems GM was unable to change typical auto customer behaviors like haggling in a showroom. Dealers were unimpressed, complaining that their staffers were left to sift through low-ball offers submitted via the Web site.
As much as the auto companies would love to use the Web to streamline delivery, it seems unlikely they will be able to do away with dealerships any time soon. A car, for many, is the second-largest purchase made in a lifetime after a house, and while consumers complain about dealer sales tactics, most want a chance to test-drive potential vehicles before committing to a purchase.
But if cars are a tough sell online, human interest stories are much easier. A group of dealers who had their franchises rejected during GM and Chrysler Group LLC's bankruptcies have turned to the Web to
launch a channel on YouTube where they are pleading for Congress to act on their behalf.
The channel so far has more than three dozen testimonials that have attracted more than 11,000 views since it was created on Sept. 19. The pleas typically recount dealer histories and map out how many jobs were lost as a result of the closure and what impact it has had on local economies.
There are financial arguments to be made for why the automakers needed to contract their retail networks, but the videos are effective in putting a face on what was portrayed as an economic decision. Just the sort of thing that Congress tends to eat up. With the White House backing the automakers' decision and the Senate reluctant to take up the cause, there might be no further compensation to come for the dealers. But
as Autoblog notes, "at the very least, the effort is cathartic and airs the plight of the many hardworking employees that found work at the now-closed stores."
And while selling cars online might require a change in consumer behavior, a good cathartic rant will always have its place online. -
Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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