EBay sees more ties with automakers for listings

By Soyoung Kim

DETROIT (Reuters) - Internet auctioneer eBay Inc (EBAY.O) expects to clinch further deals with major automakers that would clear the way for their affiliated dealers to market used cars following a pioneering tie-up with GM, an executive said on Tuesday.

General Motors Corp GM.N is taking steps to list all of the inventory of certified pre-owned cars at some 3,900 GM- affiliated U.S. dealers on eBay under a program announced in February and rolling out in the current quarter.

That tie-up is meant to broaden the market for the used car inventories of GM dealers, while drawing more sales volume to eBay Motors, which generated $18 billion in annualized transactions in the past quarter.

Rob Chesney, vice president for eBay Motors, said other automakers had expressed an interest in similar, nationwide tie-ups to market used vehicles at a time when that market is increasingly important for auto retailers.

The deeper-than-expected slump in new car sales this year, when industry volumes are expected to drop below 15.5 million units, has increased pressure on car dealers to make up for lost revenue through an increased focus on used car sales, industry executives and analysts have said.

"We've been approached ... and will be announcing other (automaker) relationships as the year progresses," Chesney said in an interview with Reuters.

About 43 million used vehicles were sold in the United States last year, well over double the 16.2 million new vehicles sold. Used car profit margins are also generally better than they are for new vehicles.

"Franchise dealers are getting really serious about used cars," Chesney said.

"Our demand for used cars has been fairly stable. In a market that has been softer overall, it is indicative of the fact that, if consumers are doing anything, they are doing used," he said.

Chesney also said eBay also hoped to expand its car parts auction business by convincing more dealerships to use the website to run down inventory of unsold replacement parts.

"That's one of the areas where we can add value. It's a pretty nascent market," Chesney said.

EBay Motors, which offers 6 million parts and accessories and vehicle listings, has over 1,000 U.S. dealers signed up for a subscription-based program that allows them to upload listings for all of the used vehicles on their lots for a $1,000 monthly subscription.

"I think we're pleased with the acceptance," Chesney said. "For us that's 5 percent of the market."

Under the tie-up with GM, dealers will also be able to join the monthly subscription-based listing service, known as eBay Motors Local Market.

EBay Motors has sold 3 million vehicles and 120 million parts and accessories since its launch in 2000. Several other portals such as AOL and Autobytel Inc (ABTL.O) compete with auto sales focused websites that connect buyers and sellers.