A day after officially changing its name, dealership lead provider AutoWeb — formerly Autobytel — on Tuesday entered into a license agreement with DealerX Partners,a provider of data-driven marketing products for car dealerships and OEMs.
Under the terms of the agreement, AutoWeb will receive a perpetual license to access and use DealerX’s proprietary platform and technology for targeted online marketing. The company indicated this process will be implemented through the creation of consumer information databases and audiences, which will allow AutoWeb to generate traffic, clicks, and leads.
Officials explained DealerX will operate the platform for AutoWeb and provide enhancements to and support for the platform for an initial five-year period, which may be extended in perpetuity.
“Today, most dealers know very little about users of their websites and many display the same message to all users—a ‘one size fits all’ strategy,” AutoWeb president and chief executive officer Jeff Coats said in a news release. “Dealers can only hope that the offers presented are relevant and attractive.
“At AutoWeb, our critical mission is to know what users want and when they want it in order to deliver the best marketing at the best time — and to deliver that user to the right dealership at the right time,” Coats continued. “In DealerX, we have found a powerful partner in this mission, and we look forward to leveraging the DealerX platform to further capitalize on the evolving consumer and automotive marketplace.”
At the end of 2016, AutoWeb promoted Billy Ferriolo to chief operating officer to accelerate improvements in its clicks and lead generation businesses. AutoWeb said this licensing arrangement is a prime example of that improvement.
“DealerX has created a unique, all-in-one automotive online marketing platform encompassing data collection, activation, analytics and attribution,” Ferriolo said. “Its platform employs extensive machine learning in the determination of what content to show which consumer across multiple devices, where and when. This is all derived from the real-time capture and scoring of consumer-driven behavioral events.
“We look forward to using this audience intelligence to deliver a better car-buying experience for consumers,” he went on to say.
AutoWeb mentioned the transaction consideration consists of a lump-sum payment to DealerX of $8.0 million upon the execution of the agreement.
During the initial five-year support period, DealerX will have the ability to earn shares of AutoWeb common stock representing approximately 5 percent of AutoWeb’s outstanding common stock if AutoWeb’s market capitalization reaches $225 million.
If these shares are issued to DealerX, its obligation to provide platform operation, enhancements and support for the platform will continue in perpetuity.
Alternatively, AutoWeb may elect to make a lump-sum payment of $12.5 million upon the occurrence of certain events in order to extend DealerX’s obligations in perpetuity. If such a lump-sum payment is made, DealerX’s right to receive shares of common stock is terminated.
Tax and stock implications
As of Dec. 31, AutoWeb reported that it had approximately $75.8 million in available net operating loss carryforwards (NOLs) for U.S. federal income tax purposes.
In light of the company’s recent stock repurchases, the company reminds stockholders about AutoWeb’s Tax Benefit Preservation Plan dated May 26, 2010, as amended on April 14, 2014 and May 26 of this year between the company and Computershare Trust Company, N.A., as rights agent.
AutoWeb explained the plan was adopted by the company’s board of directors to preserve the company’s NOLs and other tax attributes, and thus reduce the risk of a possible change of ownership under Section 382 of the Internal Revenue Code. Any such change of ownership under Section 382 would limit or eliminate the ability of the company to use its existing NOLs for federal income tax purposes.
In general, AutoWeb pointed out that an ownership change will occur if the company’s 5 percent shareholders, for purposes of Section 382, collectively increase their ownership in the company by an aggregate of more than 50 percentage points over a rolling three-year period. The plan is designed to reduce the likelihood that the company experiences such an ownership change by discouraging any person or group from becoming a new 5 percent shareholder under Section 382.
The company acknowledged rights issued under the plan could be triggered upon the acquisition by any person or group of 4.9 percent or more of the company’s outstanding common stock and could result in substantial dilution of the acquirer’s percentage ownership in the company.
“There is no guarantee that the Plan will achieve the objective of preserving the value of the company’s NOLs,” officials said.
As of Oct. 1, there were 13,082,948 shares of the company’s common stock, $0.001 par value, outstanding.
“Persons or groups considering the acquisition of shares of beneficial ownership of the company’s common stock should first evaluate their percentage ownership based on this revised outstanding share number to ensure that the acquisition of shares does not result in beneficial ownership of 4.9 percent or more of outstanding shares,” officials said.
In connection with the license agreement, the company’s board of directors considered and granted to DealerX an exemption under the plan with respect to the shares of common stock that may be issued to DealerX under the license agreement, and DealerX and the company entered into a stockholder agreement that provides for various restrictions on transfers of the shares and the grant of a proxy to the company to vote the shares as long as the restrictions remain in effect.
For more information about the Plan, please visit investor.autoweb.com/tax.cfm.
The National Automobile Dealers Association recently rolled out a resource for members to help stores leverage vehicle leasing in a way that results in happy customers and compliant deliveries.
In light of the vehicle leasing business reaching an all-time high in 2016 with 4.3 million new units being leased, NADA said consumers are still leasing new cars at near-record levels. In fact, Experian Automotive reported that 30.83 percent of all new-vehicle turns during the second quarter came via a lease.
To help store manage that volume, NADA is offering its members a resource titled, “A Dealer Guide to Leasing Fundamentals.” The material aims to help dealers and their sales staff explain leasing, including how it compares to purchasing, so that customers can make the right decision for their individual needs.
Discussed are: closed-end consumer leases, how leasing benefits both customers and the dealership, and who are the best and worst candidates for leasing.
“Leasing appeals to many consumers who are able to acquire a more expensive vehicle, often with lower monthly payments, than they could have afforded as a purchase — and they can get into a new car every few years, with no depreciation risk,” NADA said.
“Still, many consumers don’t understand the leasing concept or vocabulary,” the association added.
NADA members can obtain this leasing guide by going to this website.
Along with projecting how third-quarter results might land for a trio of the large publicly traded dealer groups, KeyBanc Capital Markets recently shared its latest dealer survey that offered more clarity on how much Hurricane Harvey impacted used-vehicle sales in August.
The survey results showed just a third of dealers who participated had used-vehicle sales increases in August. And if they did, it was for 5 percent or less.
Meanwhile, another third posted a used-vehicle sales decrease of 5 percent or less while the remaining third sustained a more significant used-metal slowdown, with sales softening anywhere from 5 percent to 10 percent.
While used vehicles might not have been rolling over the curb at the frequency surveyed dealers likely wanted, KeyBanc’s report indicated 70 percent of stores kept their used-car gross margins either intact or managed an increase below $50.
In the finance office, F&I performance continues to be strong part of dealership activity. KeyBanc highlighted that over the past three months, an average of 72 percent of respondents reported intact or increasing F&I gross profit per unit.
“However, we caution upside appears limited from these record highs, which is also reflected in more mixed responses in latter months,” analysts said.
Over in parts and service, KeyBanc noticed the dealer survey showed the weather impacted sales in that store segment, too. A third of participants said P&S sales dipped by 5 percent or less and another third added that service drive sales activity decreased by 5 percent to 10 percent in August.
But like used-vehicle deliveries, nearly 70 percent of dealers surveyed said that P&S gross per unit remained intact in August.
Moving on to a discussion about some specific dealer groups, KeyBanc’s report touched on estimates for how AutoNation, Sonic Automotive and Group 1 Automotive might fare when they release their third-quarter financial statements.
For AutoNation, KeyBanc pointed out that the company does not adjust earnings for nonrecurring items, and “we believe, in addition to the deleverage effect of temporary store closings, earnings results will likely be impacted by insurance deductibles,” analysts said.
Over at Sonic, KeyBanc mentioned the company will likely adjust for nonrecurring items. “However, the deleverage effect of temporary store closings will likely weigh on adjusted earnings in Q3,” analysts said.
Finally for Group 1 which had the most stores impacted by Harvey, KeyBank recapped what company officials recently shared “immaterial” new- and used-vehicle volume impact on full Q3 results as volumes picked up “substantially in September, and management agrees replacement demand will likely remain a tailwind to volume in the near future.”
Dealer.com announced Thursday it has unveiled a new website experience optimization that personalizes content for car buyers based on individual shopper behavior across Autotrader and Kelley Blue Book.
The new data integration is designed to help dealers deliver personalized shopping experiences online in a way that saves time and money, according to the company.
Using shopper behavior data from Autotrader.com and KBB.com, the new product deploys inventory and fixed ops marketing content, specials and assets automatically on the site.
"The leading consumer sites have succeeded by creating a highly personalized customer experience that anticipates what they want, and consumers today are expecting that experience from every company," Dealer.com senior director of website and platform products Bob George said in a news release.
"Our new integration will provide dealers with an essential asset to remain competitive amid the challenging sales outlook and evolving consumer preferences. Experience Optimization generally results in click-through rates two to two and a half times higher on personalized content than on non-personalized content," he explained.
This month, the new automated technology will be featured at the Driving Sales Executive Summit Innovation Cup Product Showcase in Las Vegas, beginning on Oct. 22.
CDK Global announced Thursday CarGurus has joined its partner program to allow dealers using CDK websites to gain exposure for their inventory on CarGurus.com and access leads from the site.
As a CDK Global Partner Program participant, CarGurus reporting will be integrated into the CDK Dealer Command Center.
The company said the integrated solutions will be first available to dealers early this month.
"We are excited to be able to offer our dealers more leads and more inventory exposure through CarGurus based on our new integration," CDK Global product officer of consumer-facing products Max Steckler said in a news release. "The CDK Customer Cloud becomes that much more powerful in being able to deliver more targeted and personalized messaging with the addition of CarGurus data."
CDK will integrate CarGurus' anonymized, aggregated data in its suite of automotive digital marketing personalization solutions.
The integration will amplify CDK’s ability to create personalized shopping experiences and cross-site consumer behavior attribution.
Dealers with CDK websites can target personalized content for shoppers who previously visited CarGurus on their own websites.
"Car shoppers rely on CarGurus for transparency and validation, and we are excited to be working closely with CDK Global to enhance that experience," said Marty Blue, CarGurus senior vice president of business development. "Through our relationship with CDK Global, we’re able to unleash even more power to assist shoppers and drive dealers' business results."
CarGurus uses proprietary technology and innovative data analytics to help car buyers shop its more than 5 million car listings.
The company said its site currently attracts over 23 million monthly unique visitors in the U.S.
NADA’s top dealer leader again is hailing from near the Motor City.
The National Automobile Dealers Association’s 63-member board of directors elected Wes Lutz as chairman for the 2018 term.
“I am honored to serve as NADA chairman as we begin the next century following NADA’s 100 years of existence,” said Lutz, who represents Michigan’s new-car dealers on NADA’s board.
Lutz is president of Extreme Dodge-Chrysler-Jeep-Ram in Jackson, Mich., about 80 miles from Detroit. Lutz added that he will continue to advocate franchised dealer concerns in the industry, legislative and regulatory affairs arenas as well as encourage dealers to adapt to the retailing challenges ahead.
“From start to finish, the nation’s franchised new-car dealership network has to benefit consumers in newer ways than ever before,” said Lutz, who has been a dealer since 1976. He is currently serving as NADA vice chairman, and previously served on NADA’s board from 2001 to 2004.
Charlie Gilchrist, who represents Northern Texas’ new-car dealers on NADA’s board, was elected vice chairman. Gilchrist is president of Southwest Ford in Weatherford, Texas, and a Buick-GMC, Nissan and Mitsubishi dealer.
Bill Willis, president of Willis Automotive Group (Chevrolet-Buick-Ford) in Smyrna, Del., was re-elected as secretary.
Bob Shuman, president of Shuman Chrysler-Dodge-Jeep-Ram in Walled Lake, Mich., was elected treasurer.
The new term officially begins at the 2018 NADA Show in Las Vegas next March.
The election took place at NADA’s board meeting in Dana Point, Calif., on Tuesday.
The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience, NADA was born.
Today, NADA represents nearly 16,500 dealerships, with both domestic and international franchises.
The Costco Auto Program announced Wednesday that its most well-known promotion in conjunction with General Motors, the Holiday Sales Event, has launched and will run through Jan. 2.
The exclusive member offer features GM supplier pricing and most current GM incentives, according to Costco.
This year’s program includes a wide range of both 2017 and 2018 Chevrolet, Buick, GMC and Cadillac vehicles, that include Costco member best-sellers such as the Chevrolet Silverado, Buick Encore, GMC Acadia and Cadillac XT5.
“Whether members prefer horsepower, fuel efficiency or extra passenger space, our vehicle lineup has something for everyone, making this the most sought-after Costco Auto Program event of the year,” Costco Auto Program executive vice president Rick Borg said in a news release.
“Our collaboration with General Motors on the holiday sales event has resulted in high member satisfaction and an increase in vehicle sales year over year.”
After completing a Costco Auto Program survey, car buyers can also acquire a Costco Cash Card after purchasing or leasing an eligible model.
Gold Star and business members will get cards worth $300, while executive members will get $700 cards.
Additionally, to participate, car buyers must have been a Costco member since Oct. 2.
Members can register either online or by phone to get a GM authorization number and locate a dealership participating in the program this year.
For a full list of eligible vehicles and eligibility dates, visit CostcoAuto.com/GM
TradeRev now is completely part of the KAR Auction Services family of companies.
KAR announced on Tuesday morning that it has acquired the remaining interest in Nth Gen Software, better known as TradeRev, which is a mobile app and desktop solution that facilitates real-time dealer-to-dealer vehicle auctions.
KAR purchased a 50-percent stake in TradeRev in 2014 and acquired the remaining interest for $50 million in cash and an additional $75 million over the next four years contingent on certain terms and conditions including TradeRev performance.
Company officials highlighted that TradeRev brings mobile and digital technology to KAR’s portfolio of 250 whole car and salvage auctions, floorplan financing solutions and other ancillary and related services.
KAR explained that it will further integrate those capabilities into TradeRev to expand its digital business and strengthen its share in the dealer-to-dealer market representing more than 10 million annual transactions.
“The digital revolution in remarketing has begun, and the acquisition of TradeRev ensures that KAR will maintain its strong leadership position in the mobile app and online auction space,” KAR chairman and chief executive officer Jim Hallett said.
“As a former dealer, I believe TradeRev is the most powerful and innovative mobile app for dealers on the market,” Hallett continued. “By injecting TradeRev with the full force of KAR’s technology, data, financing and service offerings, we plan to accelerate growth across North America and around the globe.”
The acquisition also triggered a variety of executive personnel changes.
KAR indicated TradeRev will be led by Becca Polak, who for the last 10 years has served as KAR’s executive vice president, general counsel and corporate secretary. As president of TradeRev, she will focus on diversifying TradeRev’s product and service offerings and expanding TradeRev’s market footprint.
The company added Polak will also be promoted to the position of chief legal officer and secretary for KAR where she will retain oversight responsibility for KAR’s enterprise legal and corporate communications functions.
“This is a transformative moment for dealers, as KAR and TradeRev combine to deliver a more convenient, efficient and cost-effective alternative to traditional auction sales,” Polak said.
“The speed and ease of TradeRev’s mobile app is already fueling sales for thousands of dealers in the U.S., Canada and the United Kingdom,” she continued. “Over the next several months, we’ll continue expanding into new markets and begin leveraging KAR’s data analytical capabilities to enhance the TradeRev buying and selling experience.”
TradeRev was launched in 2009 by CEO and co-founder Mark Endras along with co-founders Wade Chia, Jae Pak and James Tani, all of whom will retain leadership roles at TradeRev.
Endras will remain a member of the TradeRev senior leadership team reporting to Polak and will focus on enhancing TradeRev’s in-app experience and product development pipeline.
Endras will also take on the role of chief innovation officer for KAR reporting to Tom Fisher, KAR’s chief information officer. In this capacity, Endras will focus on advancing KAR’s innovation agenda and establishing new KAR innovation lab centers in Toronto, Chicago and Carmel, Ind.
“KAR has an incredible entrepreneurial culture and a proven track record of fostering disruptive innovation across their businesses,” Endras said.
“By applying a start-up philosophy to KAR’s development pipeline, we’ll be able to deploy new solutions more quickly than ever before,” he went on to say. “I look forward to delivering the next generation of innovative remarketing technology, products and services to KAR’s global customer-base.”
TradeRev has approximately 200 employees across office locations in Toronto, Chicago and Carmel, Ind., and field staff located in markets across the U.S. and Canada.
TradeRev offers dealers what it contends is fast, convenient access to high quality trade-in and commercial consignment inventory before it reaches wholesale physical auctions. The TradeRev mobile app can mimic the physical auction setting, enabling dealers to launch and participate in live, one-hour auctions directly from their smartphone, tablet or desktop.
Winning TradeRev bidders can complete the entire transaction within the app, including optional inspection, title and arbitration services and financing and transportation through KAR’s AFC and CarsArrive brands.
“I am thrilled for KAR, TradeRev and all of our employees,” Polak said. “Today marks a significant milestone in the digitization of vehicle remarketing and the beginning of a bright new era of innovation for our company. I am honored and humbled to lead TradeRev and this incredible team into the future.”
Autobytel is evolving as a provider of digital automotive services to connect potential vehicle buyers and dealers by changing its name.
Effective next Monday, the company that started 22 years ago will be known as AutoWeb.
In connection with this name change, the company’s stock ticker symbol will change from “ABTL” to “AUTO” on the Nasdaq Capital Market. Trading under the new stock ticker symbol is anticipated to commence next Monday, too.
Autobytel president and chief executive officer Jeff Coats reflected on how the dynamics of reaching in-market shoppers has changed since the mid-1990s.
“When Autobytel was founded in 1995, the era of digital leads and clicks was in its infancy,” Coats said. “In fact, telephones and newspapers were still the primary source of communication between dealers and consumers.
"More than 20 years later, in a market dominated by the Internet, we’ve become a leader in the digital automotive landscape,” he continued. We believe the rebranding and name change to AutoWeb better aligns with our operations and corporate strategy, particularly as we look to further expand our Internet leads and clicks businesses.”
Announced Monday, RMS Automotive and Manheim has given independent U.S. dealers a new co-listing capability that provides access to all open sale vehicles listed on RPM, the Nissan and Infiniti digital sales platform powered by RMS Automotive.
The open sale inventory on RPM will be simultaneously listed on Manheim.com and OVE, Monday through Friday, from 3 p.m. – 6 p.m. (EDT).
With the new offering, both the exposure of the manufacturers’ inventory to Manheim’s digital buying audience is increased, and independent dealers have access to a larger selection of high-quality used vehicles.
Dealers can choose from inventory located nationwide across the Nissan and Infiniti dealer network, and can conveniently move the inventory with transportation options provided by Ready Logistics.
“Obtaining vehicles as cost- and time-efficiently as possible is the name of the game for dealers in today’s competitive used-car market,” Nick Peluso, president of Manheim Digital Marketplace and RMS Automotive said in a news release.
“By offering open sale listings to the largest base of online buyers on Manheim.com and OVE, we can offer dealers early access to thousands of sought-after, pre-auction Nissan and Infiniti vehicles,” he explained.
With this solution, open sale inventory found on the Nissan and Infiniti RPM platform is now included in dealers’ Manheim.com and OVE search results.
Using single sign-on authentication, Manheim and RMS Automotive directs dealers to Nissan and Infiniti’s private label website where they can evaluate, bid, buy and make offers.
“In addition to enabling buyers to access an unprecedented selection of inventory, this digital solution helps manufacturers’ like Nissan and Infiniti drive transaction speed and efficiency by offering the right vehicles to the right dealers at the right time,” Peluso added.
RMS Automotive said Nissan and Infiniti have conducted closed franchise sales and grounding returns on the RPM technology platform with the company since May of last year.
