AutoTrader adds online auction listings.

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Author: Osburn, Chaz

Make way, eBay. AutoTrader.com wants a piece of the online automotive auction action, too.

AutoTrader.com will begin offering auction listings to dealers and consumers this month. The move represents a strategic shift for the Atlanta company, which has focused solely on online classified advertising since it was created in 1997. In December, the company said it expected to finish 2002 with $100 million in sales.

eBay, one of the few profitable dot-coms â€" net income was $162.8 million on sales of $800.2 million through the first nine months of 2002 â€" is regarded as the leader in the online auction space that it pioneered in the 1990s. It does not break out figures for eBay Motors, but the company says that unit is a key contributor to the bottom line.

But Chip Perry, AutoTrader.com's CEO, said that despite eBay's success, the market remains largely untapped.

“They're the current major player in an extremely small niche segment of the car business today,” Perry said. “The online auction style format is small today, but growing.”

According to CNW Marketing/Research in Bandon, Ore., used-car sales in 2001 â€" the most recent figures available â€" were $376 billion. Perry estimates that auction services such as eBay account for about $2 billion of that. Most of the vehicles sold at online auction sites are used.

Before Dec. 31, AutoTrader.com and eBay Motors had been partners, not competitors. For more than two years, they had marketing agreements under which each site provided a link to the other. Perry said AutoTrader.com found that visitors to its site were three times more likely to click on the eBay link than on AutoTrader.com's listings.

Perry said AutoTrader.com charges $50 per auction listing but willoffer dealers volume discounts.AutoTrader.com is banking on dealers using the service. Perry said about 8,000 U.S. dealers pay for classified listings.

eBay Motors charges a $40 “insertion fee.” The seller pays an additional fee if the vehicle sells.

“We did a lot of research and studied very closely the behavior of auction style users on our site,” Perry said. “We built ours from the ground up with our own software and our own people.”

The move represents a strategic shift for the Atlanta company, which has focused solely on online classified since it was created in 1997.

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By Chaz Osburn, NATIONAL EDITOR