By: James Cobb and Norman Mayersohn


It was just a crumb of news on the floor of the vast American car market:


Shared: From your friends #*@TechAutoCareers.com®* the online resource for the *Automotive Sales Fraternity™*


In July, AutoNation, the publicly traded megadealer that is the country’s largest new-car retailer, severed its ties to TrueCar, the third-party shopping service that referred prospective customers to its stores. But the split may have consequences beyond the spat over business practices and data ownership that caused the separation. After years in which dealers willingly ceded the online sales turf to intermediaries, car sellers are now fighting back. Just as hotel chains have been building their own apps to reclaim travelers from aggregators such as Priceline and Expedia, automakers and dealers are creating digital storefronts to wrest online shoppers from the middlemen.


Late last year, AutoNation rolled out AutoNation Express, spending $300 mil­lion on data systems to track the 70,000 vehicles in its national inventory. Carmakers are stepping up, too: In May, Toyota started a pilot program for its Scion brand called Pure Process Plus, aimed at young, tech-savvy consumers. The results have been encouraging enough that the com­pany is launching a similar online shop­ping tool for the Toyota brand next year.


It will join Ford Direct, the granddaddy of automaker sites that was launched in 2000, and General Motors’ two-year-old Shop-Click-Drive, for which GM hired 8000 programmers, according to the Wall Street Journal. What these carmaker shopping sites have in common is speeding ­customers far enough through the sales process so that a local dealership merely has to dot the i’s and cross the t’s. Scion Pure Process Plus handles every stage of a new-car transaction, including credit approval. Once buyers finish, they print a certificate to take to the dealer in exchange for the keys. The goal is to have the customer driving away in an hour.


"What these carmaker shopping sites have in common is speeding ­customers far enough

through the sales process so that a local dealership merely has to dot the i’s

and cross the t’s."


Among the established third-party shopping services, TrueCar is the one that has shaken up automotive retail the most. What sprang up in an era of research sites that served up the holy grail of dealer invoice pricing is today a sophisticated network. Dealers subscribing to TrueCar can deliver no-haggle quotes to shoppers based on typical local transaction prices, information that is provided by these same retailers. Dealers pay a monthly fee to participate and also pay around $300 each for referrals that lead to a new-car sale. TrueCar itself is something of an iceberg with only its tip showing; most of its business is cloaked by partnerships with huge affinity groups such as AARP, American Express, Consumer Reports, and Costco.


There are strong incentives for automakers and dealer chains to bring the online shopping process in-house. Dealers are eyeing the spiffs they pay for the leads, but there is also the issue of transaction data, which TrueCar collects from its subscribing dealers. AutoNation walked away because of TrueCar’s demand for information from all its sales, not just the ones that resulted from a TrueCar lead. This practice makes TrueCar stand out among third-party lead providers, and it’s how the company provides deal context to car buyers, assuring that they’ll “never overpay,” as promised in the company’s tagline. Implicit in AutoNation’s decision is the understanding that there is big value in this data, and not just to TrueCar.

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For car manufacturers, there are other concerns, such as the customer experience and the brand positioning their marketing budgets seek to reinforce. Automakers have been less than thrilled with race-to-the-bottom competition among dealers. Honda and Toyota have threatened action against those stores that advertised below-invoice prices, a practice that has been widespread on third-party sites.


Nearly everyone in the business recognizes that the old model is on borrowed time, and that inevitably larger percentages of new cars will be bought over the internet. In the coming showdown for ­digi­tal turf, the automakers have the name recognition and financial resources, the dealers have the protection of state franchise laws. But the independents have vast member networks, an established track record, online expertise, user trust, and a reach that encompasses all brands and models. The winner? It may be the customer, who stands to spend less time kicking tires and jousting with the finance office.


About I.C. Collins


I.C. Collins is grateful that he can pursue something that is both interesting and has value on several levels. For over three decades in the Automotive Sales Industry a bottom-line guy Collins doesn't shy away from telling the truth in ways that cut through the noise to deliver streetwise and corporate knowledge from someone who's been there and done that, many times over.


He aims to create “a long-lasting major brand that for generations is a company that is business-critical to the leading brands in the world. We are focused every day on creating something that’s valuable and has permanence.”


P. S. Urgent if you’re looking to optimize your interpersonal skills for success get your copy of " How to Succeed in the Automotive Sales Industry " today @TechAutoCareers.com. Then settle in for a satisfying read that will surely enhance your interpersonal skills for success this year, it is not just a book we are a service.


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