Internet auctioneer eBay Inc. on Monday rolled out a service for U.S. auto dealers intended to drive a tenfold increase in the inventory of cars available for purchase on its Web site.
EBay is also testing a revamped version of its auto shopping Web site designed to make it easier for users to find a broader range of information on used cars — including vehicles offered for sale by nearby dealers, executives said.
Under its new program, eBay will allow car dealers to upload listings of all of the used cars on their lots for a $1,000 per month subscription fee and a fee of $50 per sale.
Unlike its auction listings, the local used car listings from dealers show up with a fixed price.
The used car and truck business dwarfs new car sales in the United States and accounts for a larger share of earnings by the over 21,000 franchised car dealerships because of the higher margins used vehicles carry.
EBay is not alone in rolling out new Internet services intended to send more car shoppers to dealers.
Rival Autobytel Inc., one of the first companies to offer online car shopping, is also readying a new Web site that will charge dealers based on the number of sales prospects sent their way.
Last year, 42.5 million used vehicles were sold in the United States, according to CNW Marketing Research Inc. By contrast, there were 16.55 million new cars were sold.
Rob Chesney, senior director of eBay Motors, told reporters on the sidelines of the National Automobile Dealers Association he expected the new “local market” offering would take eBay’s online auto listings into “the hundreds of thousands of cars” from “tens of thousands” now.
EBay now works with about 15,000 auto dealers in the United States and Chesney expected a “significant” number would sign up for the subscription-based local listing service.
EBay Motors reported annualized revenue of $14 billion for the fourth quarter of 2006, Chesney said.
EBay has been testing its new service with car dealers in four U.S. cities, including Chicago, since last summer.
EBay is also testing its new auto sales site and expects to offer it to users by the spring.
EBay representatives said they had designed the new site to try to keep more car shoppers on the Web site from their initial search to their purchase by providing more information, such as car reviews written by eBay users.
EBay’s own research with auto shoppers had shown a number of those searching for cars had left the site to search for information elsewhere, company representatives said.
Marc Damon, the Internet sales manager at Fox Valley Ford in North Aurora, Illinois, said the eBay local listing program had driven business to the dealership, which had been selling 40 to 50 used cars per month.
“We’re selling an extra 10-ish because of this,” he said.
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