CDK Global announced on Friday that it recently chose nine new partners to join its growing program made up of 210 companies that together offer auto dealers, third parties and OEMs more than 315 different applications they can use to run their businesses.
The CDK Global Partner Program provides business-ready data, and serves as a marketplace of applications and integration selections.
“The partner program is focused on providing stronger security, better reliability and more choices for its dealer customers,” CDK Global said in a news release.
Currently, it serves more than 27,000 retail locations and automotive manufacturers, according to the integrated information technology and digital marketing solutions provider.
For a full list of vendors and applications available through the CDK Global Partner Program, visit www.cdkglobal.com/partners.
The program's new partners include:
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Auto Data Direct, Inc. (Tallahassee, Fla.) – provides vehicle registration services
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Auto Powered Solutions (Beaverton, Ore.) – provides service appointments online
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AutoLoop (Clearwater, Fla.) – provides CRM and service appointments online
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CloudOne (Vancouver, Wash.) – provides CRM and telephone services
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CTMS LLC (Kent, Ohio) – provides vehicle registration services
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Digital Dealership System, Inc. (West Palm Beach, Fla.) – provides business intelligence and analytics
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GrowthFX, Inc. (Highland, Utah) – provides CRM customer marketing/follow-up
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Minacs Limited (Fremont, Calif.) – provides service appointments online
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Unotifi, LLC (Houston, Texas) – provides CRM
Reynolds and Reynolds announced late on Thursday that president Ron Lamb has stepped down, effective immediately.
The dealership management system provider said Lamb plans to pursue opportunities in private equity and that the position will not be immediately filled.
In making the announcement, Reynolds chairman and chief executive officer Bob Brockman said, “Ron has made a significant contribution to Reynolds over the years. He’s a talented executive, and we wish him well in his future endeavors.”
Reynolds recapped that Lamb was named to the position in 2010 and had been with the company for 25 years.
“Reynolds ended 2016 as one of its strongest years in the past decade and that momentum has carried over into this year,” Brockman said.
“With the strength of our product portfolio and the depth of talented bench strength in our executive ranks, we are looking forward to the opportunities ahead and to our continued growth,” he added.
The executive development arrived a little more than a month after Reynolds and Reynolds Canada and BMW Group Canada announced a new, multi-year agreement between the two companies for Reynolds to provide its dealership management system — ERA-IGNITE — to all BMW and MINI retailers in Canada.
The National Automobile Dealers Association and the NADA Women Directors, in partnership with Junior Achievement USA, is teaching financial education courses to students through a volunteer program.
The initiative, termed the NADA Financial Literacy Program, was launched during the NADA Convention in New Orleans in January. It grew from insight gathered over the past few years at the Women Dealers’ Networking Event, held during NADA.
“A goal of the partnership is to get new-car dealers or dealership representatives in communities across the country to become volunteers in the program,” said Michelle Primm, managing partner of Cascade Auto Group in Cuyahoga Falls, Ohio.
Primm provides financially focused curriculum to students in her local school district through Junior Achievement.
“We are thrilled to be working hand-in-hand with NADA and NADA’s Women Directors who have demonstrated commitment to the financial literacy initiative,” said Laura Goodman, vice president of volunteer engagement for Junior Achievement.
“We look forward to working with and exceeding the expectations of NADA and their dealer members in an effort to impact young people across the country,” Goodman continued.
To learn more about how to become a volunteer in the program, contact Deborah Stevens at dstevens@nada.org or call (703) 827-6861.
Seeking Workforce Study participants
NADA is also inviting dealerships to participate in its Dealership Workforce Study. The DWS provides unique analysis of dealership pay plans and benefit packages, retention and turnover, employee benefits, work schedules and demographics.
Dealerships who participate in the study will receive two complimentary reports: Automotive Retail: National and Regional Trends in Compensation, Benefits and Retention and a custom report, which includes comparisons of the dealership(s) to peers nationally, regionally, by state and brand.
To take part in the study, visit www.nadaworkforcestudy.com. All data must be submitted by April 28. Questions can be sent to workforcestudy@nada.org.
Industry observers see trends in the new-vehicle space that are making the delivery of new metal more challenging and, as a result, likely to impact how efficiently dealerships can turn their used-vehicle inventory.
Analysts from Autotrader, Edmunds and Kelley Blue Book all shared data and insights with Auto Remarketing on Wednesday that pointed to possible challenges for franchised dealerships that might face the challenge of finding buyers for their new models — which in some cases are taking the amount of days to turn not seen in almost eight years.
Meanwhile, off-lease volume continues to grow with units ripe to be retailed as certified pre-owned is on the rise.
“(New-vehicle) inventory is starting to swell, which is concerning considering that we’re still months away from the peak summer selling season,” Edmunds executive director of industry analysis Jessica Caldwell said in a message to Auto Remarketing.
Caldwell indicated days to turn has reached its highest level since July of 2009, and new vehicle inventory was up 9 percent year-over-year in February. Edmunds offered this metrics regarding days to turn in February:
• Subcompact cars had a days to turn of 102 days.
• Large cars had a days to turn of 86 days.
• Midsize cars had a days to turn of 82 days.
• Industry average was 74 days.
“The automakers are in a tricky spot: aggressive incentives are already starting to eat into profits and residuals, but it takes discipline to pull back the production reins in what’s still a fairly strong market,” she said.
And what about the CPO department?
“The used vehicles that will feel the squeeze are off-lease and otherwise near-new used,” Caldwell said. “We know those particular types of inventories will climb due to high lease rates so having an abundance of new inventory will create more pricing pressure for those vehicles. The older used vehicles have short supply with higher demand so those should not feel the squeeze from climbing new-car inventories."
Kelley Blue Book senior analyst Alec Gutierrez acknowledged during a conference call on Wednesday that “we are seeing inventory build up across the spectrum” as he put new-vehicle days’ supply at close to 80 days, up from about 70 days a year ago. Gutierrez indicated automakers are slapping more than $3,500 on the hood in incentives to get new models rolling over the curb; a trend a bit surprising since February typically is a slow month for new-car sales anyway.
“You see where inventory levels are at and I think manufacturers are making a concerted effort to try to get the numbers down to some extent,” Gutierrez said. “You would think in February with the expectations and with respect to seasonality, we all know this is a slow month. This would be a month where you could expect to pull back on incentives a bit and a little bit of reduced performance, and it wouldn’t really break anyone’s expectations.
“But I think at the end of the day, consumers have seen rising incentive levels,” he continued. “We know that typical consumers are going to be in the marketplace typically for 60 to 90 days if not more ahead of their purchase. If they’re keeping tabs on incentive activity and trying to time their overall decision of when to head to the dealership to finalize the deal, a sudden cutback in incentives could certainly sway that to wait or seek an alternative.
“To some extent, incentives remain high because they have been high. Until we see a meaningful impact on overall inventory levels and days’ supply, it’s going to be a slow ramp back down with incentives. And at this point, we’re still seeing the trend head upward,” Gutierrez went on to say.
So if incentives are going to stay high, what’s that trend going to do to dealerships’ used-vehicle prospects?
“With days’ supply where it is and the incentive load at $3,600-plus per unit, there’s most definitely going to be a trickle-down effect impacting the used-car side,” Guiterrez said. “In fact, when we look at overall performance of late-model inventory at auctions across the U.S., we’re seeing about a 2 percent reduction in terms of what dealers are willing to pay at auction year-over-year. If you look at it in terms of retained value, the auction value as a percent of vehicle’s original MSRP, you’re seeing more like a 3-point reduction.
“Although transaction prices on the new-car side remain very strong, that overall incentive load coupled with high days’ supply, not to mention increasing supply on the wholesale side from off-lease inventory returning in greater numbers month in and month out, we are seeing not insignificant downward pressure being applied on used-car values,” he continued. “That trickle-down effect is certainly taking place and it’s something we expect to continue in the months ahead.”
During Wednesday’s conference call, Autotrader senior analyst Michelle Krebs pointed out that there were “healthy” shopping activity on dealership websites last month. She also mentioned the latest analysis from the Conference Board placed consumer confidence at the highest level since 2011 with a strong sentiment of people likely to make a vehicle purchase.
But should it be a new model or a certified unit?
“From a consumer point of view, it’s going to take a little bit more studying to which is the better deal, the off-lease vehicle and sold as a certified pre-owned versus a new one that’s heavily incentivized,” Krebs said.
“Of course, there are two different stories there, too,” she continued. “The price drops have been most significant on traditional cars and less so since truck prices have been stronger as are sport utility vehicles. (The used-car market) almost a mirror image of the new-car market.”
While there might be a glut of new-vehicle inventory gumming up the system now, Krebs advised that the industry keep watch of what happens as the first quarter unfolds.
“I think we should be careful. January and February are lowest sales volume months of the year,” Krebs said. “I think we should pay attention to March and later in the spring. Those months are the strongest and we’ll get a much stronger indication of where 2017 is headed.”
eBay Motors announced on Tuesday it has recently added new partners to its Dealer Referrer Network, further expanding its selling platform to the U.S. dealer community.
Through the Dealer Referrer Network, partners can sell eBay’s subscription packages to their existing dealer networks.
eBay said increased dealer partners can ensure that buyers on its platform have a wide selection of vehicles listings direct from dealers.
“At eBay, we’re committed to providing our buyers with the best choice and most relevant inventory. Specific to our automotive shoppers, the new dealers we’ve signed on will help expand the breadth and depth of our vehicle inventory,” Tony Hoang, general manager of Vehicles at eBay Motors said in a news release.
“With the Dealer Referrer Network, eBay will be able to extend its reach to many dealers nationwide, introducing a new subscription model that’s armed with strong-lead generation and seller insight tools.”
The subscription packages available through the program provide dealers with ability to combine local listings and national buy-on-site listings, flexibility to easily modify inventory promotion and convenience to list inventory faster on eBay’s Vehicle Merchandising Platform, according to eBay.
“We’ve been a longtime partner with eBay Motors,” said Ray Basha of Auction123.
“With the new eBay Dealer Referrer Network, we’re able to help bring more inventory onto the eBay site. Our dealers are particularly enthusiastic as it allows them to get exposure to millions of global buyers.”
eBay currently has 167 million active buyers and approximately 1.1 billion live listings on eBay Marketplace.
Prime Motor Group, a network of automobile dealerships and service centers, announced the completion of a $687 million financing facility.
The company said it wanted to refinance existing debt and prepare for future expansion opportunities.
"We could not be more excited about the opportunities that lie ahead for our company, employees and dealerships," Prime Motor Group founder and chief executive officer David Rosenberg said in a news release.
"Prime Motor Group has a bright future, and this new $687 million facility will provide the company with a substantial runway for growth over the next five years."
The five-year syndicated credit facility is oversubscribed.
It includes a $360 million floor plan financing, a $257 million term debt facility, as well as a $70 million of delayed draw capacity to be used for prospective acquisitions and other purposes, according to the company.
Financing syndication was organized by Manufacturers and Traders Trust Co. and with SunTrust Bank serving as the co-lead.
Eight lenders participated, including Manufacturers and Traders Trust Company, SunTrust Bank, KeyBank National Association, Mercedes-Benz Financial Services USA, NYCB Specialty Finance Company, TD Bank, N.A., Toyota Motor Credit Corporation and VW Credit.
Prime Motor Group’s network consists of 26 dealership and service center locations spread throughout the New England region of the U.S.
DealersLink introduced recently “Six Steps for Dealers to Get Their Cars to the Digital Front Line,” a free ebook currently available for download that offers tips to dealers on how to get inventory online timely.
The company said the ebook aims to direct dealers interested in reducing average turn time.
“We have the data that shows what’s working and not working when it comes to selling inventory,” Mike Goicoechea, chief executive officer of DealersLink, said in a news release.
“If implemented correctly, these and other tips we have will get cars to the digital front line quickly while saving dealerships thousands of dollars per month and significantly increasing front-end gross.”
The new ebook discusses mitigating reconditioning costs by sourcing inventory mix, buying the right inventory at the right price and adopting a market-based pricing strategy.
Below are highlights of three tips DealersLink offers:
“Most aged retail inventory has been previously reconditioned and is typically ready for the digital front line in less than two days,” DealersLink said.
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Buy the right inventory at the right price via leveraging analytical data to optimize inventory supply for the local market
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Adopt a market-based pricing strategy to market inventory online with market-based pricing on vehicles
“Six Steps for Dealers to Get Their Cars to the Digital Front Line” can downloaded here http://bit.ly/2lotFoS.
Sonic Automotive retailed a best-ever 119,174 used vehicles last year, including record fourth-quarter used-car unit sales of 29,621, the retailer said in results released Tuesday.
And prospects for its EchoPark used-car standalone stores are pretty rosy, too.
Some of the original Colorado stores were cash-flow positive in Q4, with the initial Thornton, Colo., store profitable on a yearly basis, the dealer group said.
Sonic said it plans to open an EchoPark location in Colorado Springs, Colo., in the second quarter. The retailer aims to open least three in Texas this year and potentially as many as five or six there, chief executive Scott Smith said in Tuesday’s conference call with the investment community.
The full-year outlook on EchoPark is a $0.23 to $0.27 loss per diluted share, Smith said in a news release. Sonic executives were asked during the call when those stores might break-even.
Jeff Dyke, Sonic’s executive vice president of operations, explained that that range includes corporate overhead. He estimates that estimates that it will take about 25 stores operating to “make that happen.”
It’s likely to take until the end of 2018 to reach that kind of store count, he said. Sonic hopes to open eight EchoPark stores in 2017, which would put its store count at 13.
“So maybe it happens the next year; for certain, the next,” Dyke said. “The great news is our original store’s profitable in Thornton. It made money for the year. We have stores that are now cash-flow positive. We’re selling the volume.
“We think we’ve also, sort of, dialed in the right inventory mix and the number of cars that we carry on each lot, we’ve really been playing with that,” he said. “Our pricing tool is working, and working very well. How we have become a part of the community through a bunch of different organizations, in particular a lot of the public school systems and things that we’re doing, have all been a plus.”
Supply for stores
Another plus for EchoPark certainly has been the amount of used-car supply available in the market.
Mentioning the separate buying function for EchoPark, another analyst — Rick Nelson of Stephens Inc. —asked if that prevented the standalone stores from turning to the dealer network to source off-lease units.
“We can source inventory through the dealer network, no problem,” Dyke said. “There’s so much inventory out there right now, Rick, that it’s just not a problem to source inventory.”
Citing numbers from 2017, Dyke said that 34 percent to 36 percent of EchoPark cars are vehicles that they traded for or bought off consumers.
“That’s been gradually growing every quarter for us, and our goal is to get that up over 50 percent,” Dyke said. “So, plenty of inventory out there for us. We don’t do a lot of piggybacking off of the Sonic dealerships to get inventory. As a matter of fact, we really haven’t done any. But it doesn’t mean that we couldn’t. We can certainly do that if we need to open up and buy cars from that resource.”
EchoPark sold 1,330 retail units in the fourth quarter, which was a 74.1-percent year-over-year increase. For the year, sales came in at 4,865 units, which beat 2016 figures by 50.9 percent. Those numbers, Sonic Automotive confirmed, are included in the total used unit volumes mentioned above.
Margin disparity?
Nelson asked about the disparity in gross profit per unit during the fourth quarter, which came in at $1,162, versus consolidated same-store used-vehicle GPU, which was at $1,341.
Dyke said that buying inventory outside of Colorado and then having it shipped into the EchoPark stores in that state has an impact, so he anticipates that margins could improve with the upcoming launch into Texas.
Additionally, he points out that buying 50 percent to 60 percent of vehicles at auction may lead to “tighter” margins that would trading for those cars. At Sonic stores, he said, they’ll trade for roughly six of every 10 cars they look at, so that positively impacts margins.
“But really, our pricing system is dictating the PUR,” Dyke said. “And what we’re really looking for is the balance between the volume and the PUR, so we generate the most gross that we can, because that’s what you take to the bank.
“It doesn’t matter if your PUR is $1,300 or $1,100 or $1,700, as long as you mix it with the right volumes so you generate the most gross dollars,” he said. “And that’s what our system is doing. Just remember, at EchoPark, we price 100 percent electronically. So you don’t have an individual sitting down there; you have algorithms that are pricing that inventory for us.
“I would expect those margins to move around all year long. Our margins in February are actually better than they were in December and January. So, that’s just the system doing that, and as inventory goes up based on what we trade for and what we purchase off the street, I’d expect our margins to go up.”
With dealers noticing tax-refund money slowly starting to impact their retail business, Black Book’s latest Market Insights report showed truck segments retaining their value much better than car segments compared with previous weeks.
Editors noticed two vehicle segments within the truck segment — subcompact crossovers and compact vans — maintained their values from the previous week.
Looking at volume-weighted data, Black Book determined overall car segment values decreased by 0.46 percent last week, higher than the depreciation rate of 0.35 percent seen in the previous four weeks.
Midsize car, prestige luxury car and premium sporty car segments declined the most by 0.82 percent, 0.58 percent and 0.58 percent, respectively.
Again reviewing volume-weighted information, editors also found that overall truck segment values — including pickup, SUVs and vans — softened by by 0.27 percent last week, lower than the depreciation rate of 0.34 percent seen in the previous four weeks.
Full-size crossover/SUV and full-size pickup segments dropped the most by 0.44 percent and 0.38 percent, respectively.
“The market sentiment in auction lanes remains optimistic. Luxury vehicles are showing higher depreciation than mainstream brands,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.
That market sentiment also was confirmed by Black Book editors and other auction observers mingling with dealers in the lanes last week.
In North Carolina, personnel reported back to Black Book saying, “Cheaper units selling very well here with tax money slowly coming in.” And in Indiana, the story was, “Rainy day here today but cars were selling well and everyone seems very positive about the market.”
Out West, the recap was similar with the watcher noting, “Dealer optimism remains high. Midsize and compacts sold well today but luxury units were weak.”
Staying in the region, another editor conveyed observations that supported Black Book’s value trends, mentioning, “Prices stable in this market location with trucks leading demand.”
The other two lane observations coming back to Black Book also originated the South as in Tennessee it was, “Good market here with midsize cars in demand but more no-sales than last week.” And from neighboring Kentucky, “Good crowd here today with a very active Internet. Vehicles sold well most all day with more ‘if-sales’ coming along towards the end.”
GWC Warranty, a provider of used-vehicle service contracts and related finance and insurance products sold through dealers, has once again been named a Bronze Level National Corporate Partner of the National Independent Automobile Dealers Association.
NIADA’s National Corporate Partner program is designed to provide its members with an extensive, highly vetted roster of partners they can rely on for vital everyday services.
As a Bronze Level National Corporate Partner, GWC Warranty is recognized as one of the NIADA’s distinguished, trusted resources with a proven track record of quality and excellence.
“GWC’s partnership with NIADA is a natural fit given our likeminded goal to help independent dealers be more successful,” Rob Glander, chief executive officer and president of GWC Warranty, said in a news release.
"At GWC Warranty, we help dealers sell more cars by giving car shoppers the confidence to become buyers. It’s this principle that has helped us partner with more than 20,000 dealers since 1995," Glander added.
Having recently surpassed $400 million in claims paid in 2016, GWC was named to Auto Remarketing’s Power 300 as well as the SubPrime 125 produced by SubPrime Auto Finance News.
