Contemporary wisdom says the Internet is good for researching and configuring a new vehicle and even finding the dealership that has the car you want. But the actual final negotiating has to involve pressing the flesh under brick and mortar. That model is changing and Kia is hoping to be in the lead by signing a deal it believes will move negotiations into a less painful digital realm, where conversations between dealers and consumers can happen under the aegis of a Kia "store" on eBay Motors.
The company's deal with eBay Motors comprises a nationwide, online, new-car shopping experience where people can research, find and purchase a new Kia from among its 300-plus dealers who can list their new-vehicle inventory at Kia.Ebay.com. The online channel launched new car sales this year and says the program derives from a California-based promotion with GM last year.
It gives Kia a virtual storefront at www.Kia.eBay.com, and lets people make offers through an eBay "Best Offer" option."
Nicolas Franchet, senior director of U.S. vehicles for eBay Motors, says the site gets 14 million visitors each month. He says the site enables people to use a variety of communications with dealers, from submitting queries or lead forms to offers on specific cars on their lots.
"If the offer is interesting to them, it's accepted, or they can decline it and counter offer," he tells Marketing Daily, adding that the actual transaction will take place at the dealership. "What's new is that we are, hopefully, saving buyers and dealers lots of time. Right now, about 80% of car purchase transactions are initiated online. But traditionally you would go to dealerships and start negotiating on price. We believe more and more of the negotiating can be done online."
Also traditional, per Franchet, is a dealer-centric approach to eBay car sales, where individual dealers showcase their own inventory on eBay. In this case Kia does work on behalf of dealers, who only have to opt in. "We don't go into specifics of our business model but I can tell you our relationship is only with Kia, not the dealers."
EBay offers two entry points for consumers into Kia new vehicle inventory: Kia's home for its dealership inventory at Kia.eBay.com, or a Kia search on eBay's automotive channel. For the latter, Kia results are mixed with other products and parts. In the case of Kia.eBay.com, consumers get only new Kia vehicles.
Citing J.D. Power and Associates, eBay says new-vehicle sales online are up 17% so far this year, with 79% of all auto shoppers sourcing third-party Web sites before making a purchase.
Franchet, also pointing to J.D. Power data, says that the car purchasing process takes on average 14 weeks down to the transaction. He says eBay's focus is the bottom of the funnel. "We are very strong on the transaction front. But new-car deals are about 15% of our inventory now, while new cars are about 25% of the car market. So we have room to grow."