General Motors Announced To Launch A Pre-owned Vehicle Online Platform, Making It Easier For Customers To Purchase Its Used Vehicles
Used vehicle market is gradually growing around the world, particularly in the US. Thus, the US automakers have started to realize its significance and following the industry disruptor – Tesla Motors Inc. (NASDAQ:TSLA).
GM Launches Factory Pre-Owned Collection
On Wednesday, General Motors Company (NYSE:GM) announced that it is entering the certified pre-owned (CPO) industry, launching Factory Pre-owned Collection (FPOC) for online shoppers seeking used Buick, Cadillac, or Chevrolet. This announcement, coupled with revised up earnings guidance for 2016 and increased shareholder returns, formed an excitement at the Street as GM shares climbed 0.46% at $30.45 as of 1:24 PM EST.
Now Americans can access GM low-mileage former lease, daily rental, and company-owned vehicles, which were never offered to consumers in “one easy-to-navigate place.” The management said that the move is another example of the US largest automaker’s efforts to attain life-time customers.“We know that many of our customers who are shopping for a used car want to complete more of the process online, and that number is growing,” GM CEO Mary Barra said in a press release.
She added: “GM is already a leader in online new car shopping with our Shop-Click-Drive service, and we are expanding it with the Factory Pre-Owned Collection, making GM the first automaker to offer this choice to consumers.”
The company will offer over 30,000 cars, with less than 37,000 miles and a factory bumper-to-bumper limited warranty. Potential buyers can compare a vehicle’s price tag on GM’s online platform other amounts paid in different areas using the Kelly Blue Book Fair Market Range.
FPOC platform allows consumers to obtain a Carfax Vehicle History Report for all the vehicles, which will be offered after its launch next month. GM also provides a 150-mile or three-day exchange program and a three-month trail of the Sirius/XM Satellite Radio All-Access Package and the OnStar Guidance Plan.
General Motors may offer more vehicles along with better services in the region; however, it is not the first company to enter the emerging industry. According to Edmunds.com, used-vehicle sales mounted 2.5% to 9.45 million units in the third quarter of 2015 (3QCY15), of which CPO sales jumped 6.92%. CPO segment accounted for 22% and showed an increasing trend, which is expected to continue, since 2011. In an Edmunds.com survey, 88% of the respondents were willing to pay more than for a CPO automobile.
Tesla and Ford already have a pre-owned car platform. The young electric vehicle (EV) maker’s CPO program went online in May 2015, providing used Model S at a discounted rates from its original price and offering 500,000 mile or four-year limited warranty on a purchase.
In July, Edmunds.com reported that pre-owned Tesla is very popularly among youth and its demand is in regions beyond home-state, California. Pre-owned Model S cars are also available in some of the Tesla’s Stores & Galleries in the US.
Last month, a Gas2.org report indicated that the prices of pre-owned Tesla vehicle are falling due to an increase in supply. Tesla delivered 17,400 vehicles in 4QFY15 and most of the reservation holders received their vehicles in December. Since only traded-in vehicles are offered on the CPO online platform, many early Model S owners sold their cars and upgraded to a newer model.
Pre-owned Tesla revenue for 2QFY15 and 3QFY15 stood at $25 million and $33 million, respectively. Global Equities Research’s Trip Chowdhry expects the revenue of $200 million for FY16, implying a strong growth momentum in the coming quarters.
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