Auto/Mate Dealership Systems provides dealership management system software to more than 1,400 retail automotive dealerships. Now, Auto/Mate DMS customers can use GoMoto’s Virtual Service Advisor Platform, a service lane kiosk that Auto/Mate says provides customers with a self-led check-in process.
Auto/Mate Dealership Systems stated on Monday it has completed all dealership management system integrations with GoMoto, a developer of technologies for automotive service lanes and showrooms. The integrations will allow what Auto/Mate describes as a streamlined check-in process.
With the integrations, Auto/Mate’s dealership customers can now use GoMoto’s Virtual Service Advisor platform to improve the service lane experience, reduce workloads for service advisers and increase service revenue, according to Auto/Mate.
Silko Honda director of operations Geoff Ewell tested the integrations by placing two GoMoto kiosks in the dealership’s service drive. Silko Honda has been an Auto/Mate customer since 2016.
"We wanted to create a frictionless environment for our customers where they could make their own choices on their own terms, and not have to wait in any lines to get their vehicle into the service queue," Ewell said in a news release.
Efficiencies, service adviser selling opportunities and customer satisfaction all increased after the dealership started using the platform, according to Auto/Mate.
“The integrations are seamless and customization options are unlimited,” Ewell said.
GoMoto’s Virtual Service Advisor kiosk can also help consumers check in, receive trade appraisals, update contact information and approve service recommendations, according to the company. The DMS updates all data entry instantaneously, according to the company.
GoMoto notes that 89 percent of dealership customers stated that the kiosk made check-in easier and faster. Ninety-five percent said the kiosk answered all their questions.
Twenty percent of customers self-selected an upgrade or add-on service recommended during the check-in process, and 7 percent of customers sought a trade-in/vehicle equity review.
Dealerships can customize Virtual Service Advisor with their own branded interface, and equity mining capabilities and customized promotions are part of the platform.
With Auto/Mate’s Service Merchandising Module, dealerships gain access to various tools that the company says can increase service volume and streamline service department processes.
“Consumers are becoming more used to self-service technology in retail environments, and GoMoto's platform meets that need in the dealership service department,” Auto/Mate president and CEO Mike Esposito said in a news release.
As the company explained the ongoing financial and marketplace challenges in getting TradeRev’s adoption rate higher, KAR Auction Services is launching a pilot program for the tool that Jim Hallett summarized when presenting the opportunity to dealers by saying, “They said, ‘How can we say no to this?’”
During a phone conversation with Auto Remarketing, Hallett explained the basics of the TradeRev Guaranteed Trade-In Value Offer now being piloting in an undisclosed market so dealers can reach potential customers who leverage smartphone capabilities.
“Basically, a consumer can download the TradeRev app, they can take pictures of the car and load them,” the KAR chairman and chief executive officer said. “Then algorithms we built will give them an instant cash offer. They can take that instant cash offer to the dealer and either get a check or use it as a trade.
“The big benefit here is it creates trust and transparency for the consumer, but it also gives the dealer a lead he may have never gotten on his own,” Hallett continued.
Hallett indicated it took the KAR technology team about four months to prepare the TradeRev Guaranteed Trade-In Value Offer ready for this pilot. Again, he didn’t divulge exactly where the pilot is happening, but the company has high hopes for success.
“We went out in to the market. We called a meeting, bought the dealers lunch and introduced the concept to them,” Hallett said. “Basically, I can tell you that unanimously they gave us the thumbs up. They said, ‘How can we say no to this?’ Our only deal is you have to be a TradeRev dealer for us to send you the lead.”
Also on the call with Auto Remarketing was KAR executive vice president and chief financial officer Eric Loughmiller, who added: “We have a situation where one of the best ways we can help a dealer is having a firm number on a trade-in. That allows the dealer to execute the transaction, or for us through TradeRev, to agree to a value on the trade-in.
“If you think about what the dealers are pressured against, he’s guessing on wholesale value and closing a retail transaction. If we can eliminate one of those variables, that can improve the profitability of that dealership if he can make fewer mistaking on valuing that trade-in,” Loughmiller went on to say.
Cost of growing TradeRev
Before having a conversation with Auto Remarketing, KAR hosted its quarterly conference call with investment analysts who quickly picked up a specific element contained in the company’s vast financial statement. KAR acknowledged that it incurred an operating loss of $53.0 million for the year, which was attributable to the rollout of TradeRev.
In his opening comments, Hallett immediately addresses the matter.
“Given the impact that TradeRev is having on our performance, let me give you more information on this important initiative for KAR,” Hallett told Wall Street watchers. “During my time at the NADA Convention in January, it was reinforced that a digital transformation is happening throughout the entire automobile marketplace. Franchise and independent dealers are investing in digital platforms. Consumers are seeking tools that make the car buying experience more efficient and more transparent. And the time to execute within the automobile ecosystem is clearly being reduced and this transformation is happening in the wholesale marketplace as well.
“Clearly, dealers are looking to move trade-ins faster at the highest possible value and the TradeRev technology enables dealers to do this within hours of the retail transaction instead of days or even weeks in the past. I believe, the TradeRev platform can serve the needs of the dealers, and I’m absolutely committed to winning in this space,” he continued.
Hallett then evaluated on the four-year journey KAR and TradeRev have taken so far.
“First, my expectations of winning the U.S. market has not changed, but we are also finding the cost to launch TradeRev is greater than our initial expectations. I knew that an opportunity like TradeRev would attract competition and it certainly has,” Hallett said.
“Competitive products have been introduced and companies are launching these platforms and have been able to attract venture capital or corporate partners; and while dealer principals can immediately see the value of the TradeRev platform, adoption rate on the dealer’s lot is requiring more direct involvement from the TradeRev team and that is leading to more head count in the near-term to support the launch in the U.S. This has caused us to use more incentives, especially in areas of transportation subsidies to grow this business.”
Hallett then went on to mention what he believes are the key components of TradeRev that supported his assertions. He highlighted that revenue per TradeRev transaction is “in the neighborhood” of $250, which is similar to KAR’s other online offering. Hallett also computed that KAR can achieve gross profit of more than 75 percent on the sale of vehicles when TradeRev reaches the scale KAR is targeting.
Hallett added that KAR transacted approximately 60,000 vehicles on TradeRev in 2017 and approximately 120,000 units in 2018. He expects the sales figure to top 200,000 units in 2019 as TradeRev currently operates in 128 markets in the U.S. and Canada, with the goal of being available in more than 175 markets by the end of this year.
After sustaining a loss of $53 million in 2018, Hallett went on to acknowledge the loss could reach $60 million this year before receding in 2020.
“And as we reach this scale in 2019, I expect losses to be reduced in 2020,” Hallett said. “And I’ve set a goal of achieving breakeven sometime in 2021. Achieving the goal of breakeven will depend on our success over the next two years in entering new markets and reaching scale in a sufficient number of markets. We will also need to see some stabilization of the market dynamics and the competitive landscape to achieve this goal.
“TradeRev was initially launched in Canada, and we have markets in Canada that have demonstrated that they are profitable operations in the local market,” he continued. “And to achieve profitability, we need to reach an adequate scale with customers routinely using TradeRev as an efficiency tool for their operation. We need to increase the number of cars sold per employee in the market to achieve profitability, and our compensation programs for our field employees are aligned with this objective.
“All-in, I am committed to making TradeRev a leader in the dealer-to-dealer space,” Hallett went on to say. “I also see opportunities for TradeRev in other segments of our business and we’ll pursue these opportunities over time. We are aligning the right resources within the KAR organization to support this initiative and recognize the tremendous value that we can create for our shareholders by winning this space.”
Editor’s note: More details and executive comments about other segments of KAR’s 2018 performance and current standing will be contained in a future report.
Reedman Toll Auto Group is staking its claim in ride-share vehicle sales and service, a segment still in its infancy but expected to grow and redefine retail automotive, said Daryl Kessler, the group’s vice president.
The dealership group’s Langhorne, Pa., campus is home to a new facility and program that caters to ride-share drivers — particularly those who drive for Lyft. The facility has a lounge for ride-share drivers with a second lounge under construction, a 14-vehicle parking area and a VIP service lane specifically for Lyft drivers.
Want to drive for Lyft but don’t have a vehicle and either can’t or don’t want to buy one right now?
As a short-term solution, Reedman Toll has partnered with StorkDriver PA, an independent rental car company that rents vehicles, complete with insurance, to ride-share drivers.
Over the longer term, the dealership group hopes to convert those ride-share vehicle renters into vehicle buyers and snag more service business along the way.
Since the program started in November, the dealership group has seen a “steady flow of Lyft drivers and cars” in its service department and lounge, Kessler said. Vehicle sales will come later as the group builds relationships with drivers, he added.
Ride-sharing here to stay
“Ride-sharing is here and here to stay,” Kessler said. “We want to be part of the auto industry that makes rental cars available to these drivers if they need them. We want to be part of the industry that sells cars to these drivers if they want to buy them. We want to be part of the industry that services these drivers’ cars.
“Along with those things we want to be part of the industry that welcomes those drivers and develops them as customers through the whole cycle.”
The seven-dealership group sells Chevrolet, Chrysler, Dodge, Jeep, Ram, Fiat, Honda, Nissan and Subaru, at its Langhorne location and elsewhere in the north Philadelphia area.
Lyft directs drivers and potential drivers who need vehicles to DriveItAway’s car-sharing platform which connects them with StorkDriver PA if they want to rent a vehicle with insurance or to Reedman Toll if they want to purchase a vehicle.
Drivers who rent vehicles are contacted by Reedman Toll to let them know it can help them finance and insure a vehicle when they are ready to purchase.
“We try to meet any drivers’ price and size needs to allow them to drive for Lyft in a way that works for them,” Kessler said.
DriveItAway president John Possumato said his company’s role is to make it easy for dealers to move into the emerging business of mobility, including vehicle subscriptions, through DriveItAway’s car-sharing platform, while increasing dealers’ traditional sales and service business.
But “the low hanging fruit as we see the business right now is adapting for ride-share drivers,” he added.
More miles, more maintenance
Though ride-share vehicle sales are important, so is the service business ride-sharing generates, said Kessler.
According to Possumato, ride-share drivers drive six times more miles than drivers of personally-owned vehicles, creating a more frequent need for oil changes, brake pads and other maintenance.
“Maintenance is a big part of the work we’re seeing in the shops,” Kessler said.
Reedman Toll is supporting Lyft drivers with special service perks such as four free oil changes, free brake pads for the life of their vehicle after they buy one set of brake pads and a 20-percent discount on all service and maintenance.
Additionally, the dealership group has set up a special service lane with its own service manager for Lyft drivers.
A wall, painted bright pink to match Lyft’s corporate logo and visible when a driver enters the dealership’s campus, helps direct drivers to the Lyft service lane, Kessler said.
‘Driving for their livelihood’
All Reedman Toll customers are a “priority”, but because Lyft drivers come to one specific lane for service, the dealership group wants to make sure their vehicles are sent promptly to the right service department, Kessler said.
For example, Chevy vehicles are sent to the Chevy service department, and Chrysler vehicles are sent to the Chrysler service department, because those technicians can perform warranty work and are familiar with recalls for their respective brands.
However, the group regularly services brands for which it does not operate a franchise, he said.
“Lyft drivers are driving for their livelihood, and we want to make sure we can provide them service as efficiently as possible,” he said.
To position itself as a “home away from home” for drivers during dealership hours, Reedman Toll has outfitted its showroom lounge with sofas and comfortable chairs where drivers can enjoy complimentary coffee and snacks, watch TV and recharge their cellphones, whether they are there having their vehicle serviced or on a break.
The new lounge is scheduled to open in the service department this spring and will be similarly appointed, Kessler said.
“Many times drivers on a long shift need a place to stretch their legs, and why not do it with us?” he said.
Driver appreciation party
In November, Reedman Toll threw an appreciation party for Lyft drivers to kick off the dealership group’s entry into the ride-share market.
Lyft invited current drivers and people who expressed an interest in driving but hadn’t yet committed.
The three-hour event included food, music and a $1,000 drawing.
Lyft, StorkDriver PA and Reedman Toll representatives were on hand to explain how their respective companies help ride-share drivers become successful and sign up new drivers or renters of ride-share vehicles.
“We had about 120 people come,” to the event, Kessler said. “At least 40 of them signed up for service in the future, and about eight had oil changes” during the party.
Ride-sharing is a vehicle segment that didn’t exist 10 years ago and had just a modest following five years ago, Kessler said.
“Rather than five years from now, and wonder what happened, our thought is why not get ahead of the curve?” he added.
Manheim launched its Manheim Express app in 2018, helping dealers list and selling inventory from the palm of their hands. In 2019, the company launched what it describes as an “in-app buyer experience” that helps dealers purchase fresh, local inventory.
The Virginia Auto Dealers Association took notice and decided to use the product to help its members gain wholesale efficiencies and make more money.
Last month, Manheim Express became an exclusive program partner to help the association and its approximately 450 franchised new car and truck dealers, and the app is now integrated with vAuto’s Provision used-car dealer management software.
Dealers can use the Manheim Express app to list vehicles online and use 360-degree imaging with moveable images to highlight damage. The app, which dealers can download for free on Apple and Android devices, helps them receive a “guaranteed first bid” that sets a minimum floor price for a dealer’s vehicle. Manheim will purchase the vehicle at the guaranteed first bid price if the vehicle does not sell for the floor price, or higher, within two sale-days of being listed.
Manheim Express also offers a new Concierge service in which a specialist will do all the work for the dealer. The company says that service helps dealers who want the advanced imaging and listing capabilities in the app while being hands-off with the listing process.
Manheim vice president of offsite solutions Derek Hansen said in a news release that dealers rely on the Virginia association for advice, guidance and support.
“The fact that VADA endorses Manheim Express as a valuable tool for dealers to buy and sell vehicles right from their lots is a testament to the app’s success in fueling greater efficiencies and helping dealers meet their goals,” Hansen said.
In addition to selling vehicles, Autotrader team members keep busy with community service, including sponsorships, donations, community partnerships and volunteerism.
Autotrader and other companies under the umbrella of Cox Enterprises also employ more than 1,700 active veterans, and Autotrader vice president of marketing Greta Crowley notes that the company "continues to make strides in strengthening the support offered to America’s heroes.”
Now the company is continuing its participation in a program that it launched last fall to raise money for veterans during their road to recovery.
Autotrader was set to honor America's heroes with Brad Keselowski's Checkered Flag Foundation during the Monster Energy NASCAR Cup Series race weekend at the Atlanta Motor Speedway Friday through Sunday. Brad Keselowski drove the No. 2 Autotrader Ford Mustang for Team Penske, and he launched the return of the Tribute 2 Veterans program last fall.
During the campaign, friends and family of former service members submitted a veteran’s name to be featured on the No. 2 Autotrader Ford Mustang. Cox Automotive, parent company of Autotrader, encouraged current veteran employees from all Cox Enterprises companies to add their names to be placed on the vehicle.
The vehicle’s paint scheme features 58 Cox employee names and more than 140 additional veterans. The proceeds go to the Checkered Flag Foundation, and each veteran will receive a piece of the No. 2 Autotrader Ford Mustang displaying his or her name.
Autotrader also donated an additional $10,000 to Keselowski’s non-profit foundation, which assists veterans in getting back on their feet.
“Our company has a strong tradition of supporting communities, and there is nothing more satisfying than finding a connection between our Autotrader values and our close partnership with Team Penske,” Crowley, vice president of marketing for Autotrader, said in a news release.
Now entering its sixth season with Team Penske, Autotrader sponsors Keselowski and fellow driver Joey Logano. The company is also an associate sponsor on both cars for the full Monster Energy NASCAR Cup Series season.
Readers can find more information here on the business intersection of sports and automotive as part of Auto Remarkting's Driving Force series.
CarLotz has been in full expansion mode as of late, with the recent opening of its San Antonio location marking a continuation of its 2018 growth pattern that also included new stores in Florida and Illinois. The used-vehicle consignment company now operates eight retail locations and three reconditioning centers in Virginia and North Carolina in addition to the Florida and Illinois sites.
Now, it’s starting its first major advertising launch in multiple U.S. markets. The campaign will launch in April with media buys in Chicago, Tampa and San Antonio.
For that launch, CarLotz is partnering with Richmond-based advertising agency Familiar Creatures, which has been working on the Devils Backbone Brewery’s 2019 advertising campaign. Familiar Creatures co-founder/creative director Dustin Artz said in a news release that his company looks forward to working with CarLotz, which he described as “a disruptive startup who just happens to be based right here in Richmond.”
CarLotz director of branding Elizabeth Maksim was also enthusiastic, describing Familiar Creatures in a news release as “small and nimble like CarLotz.”
For the CarLotz campaign, Familiar Creatures will work with Richmond-based Spurrier Group, which will handle media planning and buying.
CarLotz launched in 2011 in Virginia, eventually adding other locations in that state and North Carolina before continuing its expansion elsewhere.
Holman Automotive likes to talk about its customer lifestyle-focused experience that represents the Holman values.
The company is touting the same theme with the recent opening of its new 145,000-square-foot Audi Fort Washington dealership. Holman says the facility features the all-new Audi Terminal Concept, delivering “a lifestyle-focused experience” that also represents those Holman values.
The dealership includes four levels of new- and pre-owned vehicles, along with two Quattro Cafes serving premium beverages onsite and a customer lounge with complimentary wi-fi. Indoor and outdoor parking is available.
There’s much more. No one enjoys getting a vehicle serviced, but customers might almost look forward to experiencing the maintenance area. The 30 service bays feature three heated, indoor service lanes and private workstations with charging docks.
The dealership is also a designated Audi Sport dealer, featuring certified product specialists and a showroom with models such as the Audi R8 and Audi RS 5 Coupe.
Holman Automotive also noted that it is transitioning its Audi dealership operations from its Willow Grove location to the new Audi Fort Washington facility.
Holman Consumer Services president and chief executive officer Brian Bates said in a news release that the Audi Fort Washington site is an example of the lifestyle-focused experience theme, describing it as a “visually welcoming environment that embodies Audi’s legendary styling.”
AutoNation will have a new chief executive officer and president on March 11.
The retailer announced Friday that current USAA chief operating officer Carl Liebert will replace Mike Jackson in these positions; Jackson will take on the position of executive chairman of the board that same day.
The vote by the board to name Liebert president and CEO was unanimous, AutoNation said, and was “fully” supported by the two largest shareholders in the company, Cascade Investment and ESL Investments.
“AutoNation is the retail automotive industry leader. The company has a coast-to-coast brand, a comprehensive brand extension strategy and a transformational digital consumer car-buying experience,” said Jackson, currently AutoNation chairman, CEO and president, in a news release.
In addition to time as COO and executive vice president at USAA, Liebert’s experience also includes time as the executive vice president for stores at The Home Depot and is a former U.S. Navy Officer.
“Carl is a global leader who brings to AutoNation multi-faceted expertise in leading customer-centric transformations, omnichannel digital capabilities and supply chain logistics,” Jackson said. “His work in improving store operations has become a model that many companies have emulated. Carl is uniquely qualified to lead AutoNation forward.”
Added Liebert in the news release, “AutoNation has a clear strategy that sets it apart in the auto retail sector and diversifies the typical retail business model. The company’s brand extension strategy has given it an edge in what is a cyclical business.
“The opportunities that lie ahead for AutoNation are massive, and the ability to lead this next chapter is deeply humbling and exciting,” Liebert said. “I am focused on enhancing the customer experience, AutoNation’s industry-leading store operating model, the logistics strategy for brand extensions, and digital opportunities for retail and business to business customers. I am confident in the road ahead, and I am honored to lead this extraordinary company.”
Members of the Ricart family have been “avid Harley-Davidson riders for years.” Now, they will be able to bring that passion for motorcycles into their business.
Ricart Automotive on Tuesday announced it has acquired A.D. Farrow Co. Harley-Davidson, which it noted is America’s oldest Harley dealership.
Ricart, noting that the acquisition will bring “mobility to next generation of riders,” said in a news release that the two companies will grow their automotive services, further expanding into the lifestyle electric vehicle ownership market and the traditional Harley-Davidson products.
Harley’s plans to diversify its product line by developing more electric scooters, bikes and vehicles will meet urban customers’ new demands, Ricart added.
In announcing the acquisition, Ricart Automotive noted that it will assume majority ownership of A.D. Farrow Co.’s three Columbus franchises and added that the expansion marks Ricart’s first move away from the Ricart Automotive Mega Mall in Columbus, Ohio in 10 years.
“We’re excited to get to know the A.D. Farrow employees and their families and to take on the next chapter of this historic brand," Ricart Automotive Group president Rick Ricart said in a news release.
“I have known and admired the Ricart organization all my life,” said Bob Althoff, the previous owner of A.D. Farrow Co. Harley-Davidson. Altholff has led A.D. Farrow for the last 17 years.
"The family has been Harley riders for years, and I couldn’t imagine better stewards of this legacy business in the decades to come," Althoff said about Ricart Automotive. "Their passion for motorcycles and the people who ride them convince me that they will dominate the Harley-Davidson dealer ranks as they have the Ford ranks.”
A previous Auto Remarketing article includes more information on Ricart Automotive, and another covers Ricart's new Express Checkout service.
The Dave Cantin Group (DCG), a dealership merger and acquisition firm, expanded its management team to meet a growing demand for services in key regions of the U.S.
Firm founder and chief executive officer Dave Cantin highlighted in a news release this week that the move nearly doubles DCG’s national team of regional and district managers.
DCG’s national team of M&A professionals now work from regional offices in New York, California, Florida, Illinois and Texas.
Mark Dwyer, previously managing director of DCG’s Midwest regional office in Chicago, has moved to DCG’s Madison Avenue headquarters in New York, where he joins William “Woody” Woodward to co-manage the Northeast region in one of the firm’s busiest offices.
Scott Worthing will succeed Dwyer as managing director of the Midwest region.
In addition, Chad Goodson has been appointed a managing director for the Southeast region, where he will co-manage the regional office with Dan Simonson. Based in the Miami-Fort Lauderdale area of Florida, the Southeast is another of the firm’s fastest growing regions.
Fred Sherwood and Alex Covino also have joined the company as district managers in the firm’s West region. Based in Irvine, Calif., the region is led by managing director George Pero.
Worthing has more than 30 years of experience in dealership financing. He began his career with Mercedes-Benz Financial, where he held a number of senior management positions in dealer relationship management. He moved from captive finance to commercial banking in 2008, joining M&T Bank in Philadelphia as administrative vice president of dealer financial services. M&T Bank later appointed him to open an expansion market in Chicago through its SunTrust Bank group working closely with dealers in the Midwest.
“DCG has quickly established a solid reputation as the go-to dealership M&A firm in North America, and I’m excited to be part of the management team at such a fast-growing company,” Worthing said.
Goodson comes to DCG from Cornerstone Executive Capital, where he served as a managing director for more than 10 years. At Cornerstone he counseled dealers on organizational development, performance management, valuations, sales and service. He previously worked as a client development manager at CARFAX where he directed leadership and development activities with the company’s top dealer groups and vendor partners.
Prior to CARFAX, Goodson was in brand performance management for GP Strategies Corp., where he represented General Motors in the company’s Southeast region.
“DCG fills a much-needed service gap in a rapidly evolving market,” Goodson said. “I’m looking forward to joining this group of top-notch merger-and-acquisition specialists — unquestionably leaders in their field.”
Sherwood has worked in the automotive industry for 40 years, including significant experience with Chrysler in its dealer network office on the West Coast. He spent the last three years managing his own private consulting business and has been instrumental in consummating numerous buy/sell agreements.
Covino joins DCG with experience in both financial and real estate markets. Early in his career, he worked as an equity trader responsible for the active management of short-term-oriented portfolios under continuously changing market conditions. Covino later worked in residential and commercial real estate where he built a high-output real estate investment company that helped bridge the gap between conventional sellers and institutional investors.
“The rapid growth in demand for our services over the past year has allowed us to expand our team of M&A professionals to include a group of highly effective managing directors at five regional locations throughout the U.S.,” Dave Cantin said.
“This is the most experienced team of M&A experts in the country — a team with considerable expertise both on the retail and wholesale sides of the business," he went on to say.
