FRAMINGHAM (06/22/2000) - General Motors Corp.'s slumping Saturn Corp. unit wants to kick-start new-car sales by offering to inspect used vehicles that are offered for sale on EBay Inc.'s auction Web site.
Saturn officials said they hope the inspection service will drive potential new-car buyers into the company's dealerships and boost stagnant sales.
Earlier this month, the Spring Hill, Tennessee-based automaker and EBay struck a deal under which Saturn will inspect any make or model of used vehicle. The 30-minute, 135-point inspection service will be marketed through EBay's automobile auction site and will cost car sellers less than $100. Vehicle owners may post the inspection results with their auction listing at www.EBaymotors.com.
"Store traffic is something we are interested in, [as well as] exposing Saturn to a wide auto-buying public through Internet exposure," said Bill Betts, a Saturn spokesman. "We believe the Internet gives customers a wonderful opportunity to do car shopping online, and we want to take full advantage of that."
Founded in 1990, Saturn saw its sales peak in 1995 at 285,000 cars, but sales have dropped each year since. Saturn sold roughly 231,000 cars in 1998 and 1999. June sales of Saturn's SC and SL coupes dropped 22 percent and 29 percent, respectively, from last year. Sales of its SW wagon were off 42 percent from the same period last year.
The inspection service is slated to launch next month through Saturn retailers in Nashville, Houston and Indianapolis. It should be available through most of Saturn's 400 retailers nationwide by year's end.
Buying a Lemon
Thilo Koslowski, an automotive analyst at Gartner Group Inc. in Stamford, Connecticut, said inspections from a trusted third party address a significant obstacle in online sales of used vehicles.
"If you look at used car sales, compared to new-car sales, there are less consumers using the Internet for used cars," explained Koslowski. "It's a trust thing. People don't feel confident about buying a used car from a Web site, because what if you get it home and something is wrong with it?"
J. D. Power and Associates pegs the used vehicle market at $370 billion per year, estimating that 26 percent of used car shoppers employed the Internet last year before buying a vehicle in person. That's up from 14 percent in 1998.
EBay expects used car inspections to give an extra measure of assurance to potential buyers, said Russel Brady, an EBay spokesman. EBay, which derives 25 percent of its sales volume from car transactions, began selling used vehicles online last year.
Saturn and EBay aren't the first companies to offer inspection services for vehicles sold online.
For example, startup BestOffer.com Inc. in San Francisco offers used car inspections in San Francisco and Los Angeles as part of its used vehicle online auction service. The 108-point inspection costs $99 and comes with a 3,000-mile powertrain warranty to buyers.
And iMotors.com, also based in San Francisco, finds used vehicles for customers in California, New York, Oregon and Washington. It also offers a three-month 3,000-mile warranty and seven-day money-back guarantee.