Update: New GM + eBay = New Business Model!

My post earlier today about New General Motors’ (GMGMQ) efforts to expand its relationship with eBay (EBAY) by offering new cars, rather than just certified pre-owned vehicles, for sale invited clarification from John Pyden, GM’s VP for North American communications.

Pyden pointed out that this program, which is at this point a pilot program limited to California, isn’t related to GM’s ongoing dealer cull. Additionally, the program won’t offer new GM vehicles directly to sale to the consumer; dealers will still be involved and will get to decide which vehicles to post on the auction site and on what terms to sell them (such as deciding whether to utilize a “Buy It Now” option).

“We’re not forcing anybody to go to eBay,” Pyden said. “We’re creating another avenue for consumers to shop for and buy GM products.”

I asked Pyden about the pricing issue—whether placing new vehicles into an auction environment would introduce pricing chaos—and he indicated that GM isn’t going to let that deter it from making progress in this area. He also said that exact details of how the program will work haven’t yet been fully worked out with eBay.

So New GM isn’t trying to use eBay to make an end-run around dealers to get to consumers. This is of course an idea that’s already been floated. Why should anyone have to go to a dealership, haggle over pricing, in the Internet era? But automakers continue to value their dealer networks. That said, in a more competitive marketplace, companies in GM’s position need to explore new ways of doing business.

Now, what does eBay Motors have to say on the matter? It also provided me with some feedback, via VP Rob Chesney:

At this time, no plans have been finalized with General Motors. We hope to support GM’s new company and vision going forward. We are excited about a potential new adventure that supports GM’s dealers by expanding on how they already reach consumers through new approaches.

Pretty much backs up what the New GM says. The New General has also indicated that there’s initial dealer enthusiasm for the pilot program in California. So the story evolves, and we’ll keep an eye on it.