Hoping to bottle the emotion it calls “Usedphoria,” General Motors driving into online used vehicle sales is the latest and largest example of brands retaking control of reCommerce.
With new cars starting to sell above sticker price and production shortages bound to persist through 2022, manufacturers are watching developments in the used car market where prices are skyrocketing, and fortunes are being made by online dealers with OEMs largely left out.
Announcing a spring 2022 debut for its used-vehicle platform CarBravo on Tuesday (Jan. 11), GM is taking on masters of automotive eCommerce including CarMax, Carvana and Vroom, leveraging its network of some 3,800 dealers and the market muscle of GM Financial.
Playing to in-house strengths web-based auto aggregators don’t possess, GM’s move confirms a reCommerce trend Karen Webster outlined on Jan. 10, writing that brands will stop ceding resale to third parties, creating “their own closed-loop marketplaces for [their own] goods and use payments as the engine to do it. In the process, they’ll also change the shopping dynamic.”
That dynamic now finds newer platforms dominating unprecedented demand for used vehicles.
Reuters reported that during the pandemic, “Online used-car marketplace Carvana, with a market value of $34 billion, filled the e-commerce space left open by automakers and most traditional dealers, offering consumers a way to shop for a wide range of used vehicles from multiple brands, and get their purchase delivered at home.”
To recapture online sales, CarBravo gets pick of the pre-owned pack from Chevrolet, Buick and GMC dealers, plus “cars and trucks that GM Financial, the automaker’s consumer finance arm, controls after taking them back from rental car agencies or vehicle leases. GM officials said the company’s dealers have about 400,000 used vehicles in stock,” as Reuters reported.
Offering standard warranties and “an extensive nationwide network of dealerships for service and maintenance, and wide-ranging ownership benefits that include roadside service, courtesy transportation, and OnStar and SiriusXM trials on eligible vehicles throughout the ownership lifecycle,” GM said it’s creating “a flexible, modern shopping and buying experience.”
Auto industry news site The Drive reported that “Hints of the project became public knowledge last year, with GM registering a trademark for the phrase ‘Feel the Usedphoria.’”
GM describes CarBravo as its new “digital retail platform (DRP), saying “The DRP will provide a simple and transparent shopping interface featuring clear dealer pricing, vehicle history reports and 360-degree views of the vehicle. All CarBravo vehicles will be inspected and reconditioned to meet standards set by GM. Customers can receive guaranteed online offers, from the industry standard Black Book, to buy their vehicles even if they do not purchase a vehicle through CarBravo.”
Early reaction among aggregators to GM’s disruptive maneuver are scare, but confident.
CarMax executive vice president and chief marketing officer leading strategy, product and marketing, Jim Lyski said “While we are still learning about the newly announced service from GM, what they have set out to do is difficult. They will need to build out capabilities to deliver the seamless online to in-store experience customers demand, and do that across all their dealers. As we’ve seen at CarMax, it will be rewarding if they accomplish it.”
See also: GM Launches Online Used Car Marketplace
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More