Hey Mac Whats Up? - E Bay Motors Invades Car Market

By Mac Gordon
Editor at Large
Michigan Bureau
The Auto Channel

Amid topsy-turvey markets for new and used vehicles, online giant E Bay is revving up a strong role as a buyer and seller.

After staging dealer training seminars in 15 U.S. cities in February and March, E Bay made it clear that it was entering vehicle markets nationwide and treating both franchised and independent dealers as resources for inventories, financing, servicing and potential acquisitions.

E Bay's spring 'blitz' raised numerous questions as to its status under state franchise laws, which forbid new-vehicle sales unless showroom buildings are contiguous with service centers and franchise agreements are in effect on each brand.

“E Bay MOTORS” has not disclosed names of its senior managers or how it proposes to share in allocations of new vehicles or where they will be serviced.

At its seminars, E Bay instructors said that it plans to offer competitive vehicle prices, accept trade ins and offer its own discounts.

“We'll be more aggressive,” said E Bay instructors, who were anonymous. Other services offer customers discounts, but farm out invoicing, servicing and body shop work.

E Bay's entry into the vehicle markets was not unexpected. The online marketing firm is exploiting its reputation among consumers in many other areas by adding vehicles to its portfolio.

E Bay is said to believe that it can withstand legal challenges and set up dealerships that can sell new and used vehicles without franchises.

How automakers will respond to the E Bay challenge is yet to be threshed out.

E Bay Motors argues that factory franchises are a “restraint of trade” and E Bay's “open system” of selling online trumps restraints and opens the door to promoting multiple brands on digital networks.

The well-publicized surge in used-car prices this winter and ongoing thin stocks of pre-owned cars add another concern for dealers.

E Bay Motors believes it holds the key to success among single-point stores, as favoritism prevails for hot-car allocations among public and private groups.

The new chairman of NADA, Dave Westcott, hales from Burlington, NC, and is one of those rural one-point stores. The cities which will host E Motors training seminars are the following: The first seminars are proceeding in Albany, Allentown, Augusta, Baton Rouge, Columbus OH, Davenport IA, Harrisburg, Jersey Shore, Las Vegas, Madison, Munster IN, and Mobile, AL.

Westcott's three brands are Buick, GMC and a shaky Suzuki. At 66, Dave exemplifies the thousands of smaller dealerships which are dominant in NADA.