Federal regulators not only are suing Volkswagen; now members of its franchised dealer network are taking action.
Three family-owned Volkswagen dealers filed a class action against the automaker on Wednesday stating that the OEM intentionally defrauded dealers by installing so-called “defeat devices” in its diesel vehicles, and separately carried out a systematic, illegal pricing and allocation scheme that favored some dealers over others and illegally channeled financing business to the captive finance arm VW Credit.
Hagens Berman is representing three Volkswagen dealerships owned by Ed Napleton, who with his family have been involved in the business in the Chicago area for three generations.
The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, stated that in the midst of VW’s “Dieselgate” scandal, in which it admitted to installing an illegal “defeat device” emissions-cheating software in more than 550,000 U.S. diesel vehicles, the automaker’s affiliate in charge of its dealer network withheld all information about the scandal from current and prospective dealers, even though it was aware of the issue since at least as early as 2014.
The suit goes on to say that VW’s deception, coupled with the drop in value of diesel vehicles, the inability of franchise dealers to sell diesel vehicles and the loss in value of the VW brand delivered a “devastating” blow to dealers’ profits and the value of their franchises.
“What is really discouraging and led me to file this lawsuit is that Volkswagen has wholly failed to respond to dealer concerns in a substantive manner,” Ed Napleton said. “It has talked for months about multiple plans, but done nothing and left us dealers in the red, and in limbo.”
In a message to Auto Remarketing, VW said, “Volkswagen is reviewing the complaint. The company is committed to resolving the U.S. regulatory investigation into the diesel emissions matter as quickly as possible and to implementing a solution for affected vehicles, as we work to earn back the trust of our customers and dealers and the public.”
Wednesday’s developments arrived only about a week after the Federal Trade Commission charged that Volkswagen deceived consumers with the advertising campaign it used to promote its “clean diesel” VWs and Audis, which the regulator said Volkswagen fitted with illegal emission defeat devices designed to mask high emissions during government tests.
The FTC is seeking a court order requiring Volkswagen to compensate American consumers who bought or leased an affected vehicle between late 2008 and late 2015, as well as an injunction to prevent Volkswagen from engaging in this type of conduct again.
“The challenges facing VW now include legal action initiated by its own dealers,” Kelley Blue Book senior analyst Karl Brauer told Auto Remarketing when learning of the latest suit. “The scope of the issue hasn’t yet stabilized even as VW works to finalize a solution.
“With multiple deadlines looming in the next few weeks, a resolution should surface soon, but it’s apparently too late to satisfy dealers who feel they’ve suffered excessively as a result of the ongoing diesel stop-sale order,” Brauer added.
During the same span mentioned in the FTC matter, this dealership lawsuit stated Volkswagen also allegedly forced franchise dealers into a floorplan financing discount system conducted by VW Credit — a company wholly owned by the OEM — in what the suit called an “incestuous relationship” that put dealers that declined to use the captive at a “competitive disadvantage.”
“For VW dealers — many of which are small, family owned franchises — ‘Dieselgate’ amounts to a classic ‘pump and dump’ operation, in which VW exploited the CleanDiesel eco-friendly market that it helped create, boosting the price of entry and continuation in the market for VW franchises,” said Steve Berman, managing partner of Hagens Berman.
“All the while, VW withheld information about the impending Dieselgate fiasco, and left dealers to fend for themselves as the scandal unfolded,” Berman continued.
The Napleton family is certainly no small company in the franchised dealership segment.
Ed Napleton’s father's and grandfather's business grew from a single Buick service station to several franchises in and around Chicago.
Five of Francis Napleton’s eight children have worked their entire lives in the industry, and today the Napleton family operates more than 50 dealerships in five states.
“In a sickening display of VW’s disregard for its dealer franchisees, Napleton Automotive of Urbana was purchased after VW admitted its fraud to regulators, just three days before the ‘Dieselgate’ scandal made headlines. Yet Volkswagen withheld the truth and pushed the sale through, knowing well that Ed Napleton was purchasing a dealership that would almost immediately plummet in value,” Berman said.
In addition, the dealership suit accuses Volkswagen of abandoning its long standing “stair-step” programs to provide financial assistance to its dealers. While the automaker touted to dealers that it would replace them with new programs with equal or greater benefit, the suit indicated that VW’s abandonment of these programs, “was calculated to quell poor publicity as well as dealer outrage at Volkswagen Group of America conduct and was otherwise calculated to fraudulently induce its dealers and prospective dealers to continue to invest in the Volkswagen brand.”
The suit explained that just as consumers readily purchased what they thought were reliable environmentally friendly vehicles, franchised dealers built new showrooms and purchased new facilities, while heavily stocking lots with CleanDiesel vehicles, based on VW’s false marketing. In VW’s push of its CleanDiesel vehicles, the complaint states that it also “purposely and fraudulently induced its dealers to continue to invest in their dealership facilities and to otherwise benefit VW.”
Berman added, “Franchise owners are now left with lots full of CleanDiesel vehicles they are unable to sell, and these cars have suffered tremendous loss of value and take up inventory space and carrying costs.
“VW dealerships large and small have been at the mercy of an unethical corporation, much like the hundreds of thousands of owners across the country, and we believe it’s time to take a stand for their rights,” he went on to say.
The suit accused VW of engaging in a criminal racketeering enterprise with respect to the ‘Dieselgate’ scandal and violating federal law designed to protect dealers from unfair practices by vehicle manufacturers. It also accused VW of breaching state franchisee protection laws, breaching its franchise dealer agreements and defrauding its franchise dealers.
“Plaintiffs and the franchise dealer class have invested millions, collectively hundreds of millions of dollars in the Volkswagen brand,” the suit said. “But now the brand value has plummeted, sales of VW diesels have completely halted, and sales of all VW cars have plummeted.”
Cox Automotive continued to adjust its leadership structure on Tuesday as the company promoted VinSolutions vice president and general manager Lori Wittman to become senior vice president and to lead the newly formed Cox Automotive Sales and F&I Solutions team.
The company added that Wittman will maintain her role as the general manager of VinSolutions.
Cox Automotive explained that it created the Sales and F&I Solutions team after the company named VinSolutions as its designated CRM solution. The team comprises the dealer-facing portions of Cox Automotive’s F&I holdings as well as VinSolutions.
As part of her new role, Wittman will lead Cox Automotive in addressing the automotive industry’s steady movement away from on-site software and toward online solutions for the F&I space.
Wittman joined VinSolutions in 2013 with 20 years of cross-industry technology and business operations experience. She was an associate partner with Accenture, and also held positions with Freightquote and H&R Block.
“Lori has been a driving force in the company’s continued growth from day one,” said Keith Jezek, president of Cox Automotive Software Group. “Her dedicated leadership is a huge benefit to both VinSolutions and Cox Automotive.
Now, in addition to shaping the future development of VinSolutions, Lori will lead this new team,” Jezek continued. “Forming the Sales and F&I Solutions team is another example of how Cox Automotive continues to align and integrate offerings to enable dealer clients to be more profitable and efficient.”
Victor O. Schinnerer & Co., a leading underwriting manager, launched on Monday what’s being called a new dealer open lot insurance program. The program is available to dealership clients and can provide coverage for owned inventory held for sale.
The program, offered on non-admitted paper, is provided by a panel of Lloyd’s Syndicates backed by the security of Lloyd’s A+ (S&P) and A (A.M. Best) ratings. Coverage highlights include:
— Broad coverage including earthquake
— Aggregate wind/hail deductibles; terms will vary by state
— Flood coverage options available for most dealerships with flood exposures
— Competitive premiums
— Streamlined application process
The dealer open lot insurance program is currently available in all states except Alaska, Colorado, Hawaii, Iowa, Kansas (western portion), Louisiana, Minnesota, Nebraska, North Dakota, Oklahoma and South Dakota.
The company said the program is available on an open brokerage basis to all licensed brokers and agents.
“Automotive dealerships face a myriad of challenges, and protecting their expensive inventory is paramount,” said Dennis Kane, senior vice president and automotive dealership practice leader for Schinnerer.
“Our new program offers flexibility in coverage with a broad carrier appetite and the capacity to meet the evolving needs of our brokers and clients,” Kane continued.
As the organization often does leading into its annual convention, the National Automobile Dealers Association made a sizeable contribution to a charity within the host city.
Leading up to the NADA Convention & Expo in Las Vegas, the dealer body donated a new delivery van valued at $52,000 to Three Square Food Bank.
“We are deeply grateful to be the recipients of a brand new delivery van,” said Brian Burton, president and chief executive officer of Three Square Food Bank.
“NADA's donation will truly make an impact on our mission to reach more children who struggle with hunger in southern Nevada,” Burton continued. “Their great partnership and generosity will touch the lives of many, and we cannot thank them enough for their support of Three Square.”
The donation will have a direct impact on Three Square's childhood nutrition delivery route, which includes Kids Cafe and the BackPack for Kids programs, Burton added.
“This donation supports the NADA Convention and Expo's longtime host city of Las Vegas through Three Square's mission to provide wholesome nutritious food to more than 305,000 people who are at risk of hunger in southern Nevada,” said 2015 NADA chairman Bill Fox, a franchised dealer in upstate New York.
Three Square will also utilize the delivery van for its summer food service program, Meet Up and Eat Up. In addition, the updated fleet technology and design will increase fuel efficiency and decrease driver strain due to its smaller size.
The unintended consequence.
That’s what Jeff Carlson, the 2016 chairman of the National Automobile Dealers Association, said NADA is trying to prevent through its policy work in Washington, D.C.
The Colorado Ford and Subaru dealer said many of the federal government’s regulatory and policy moves related to the car business have good intentions, but could end up hurting consumers.
This plank of NADA’s platform was part of a wide-ranging emailed Q&A between Carlson and Auto Remarketing three weeks prior to the dealer association’s annual convention.
“NADA’s policy engagement efforts all have a common theme — and that’s protecting consumers from the unintended consequences coming out of Washington, D.C., and informing other key stakeholders about the tried-and-true benefits of the dealer franchise system,” Carlson said when asked about NADA’s goals and focus for 2016.
“A major focus of NADA continues to be encouraging dealers to adopt the NADA/NAMAD/AIADA Fair Credit Compliance Program as the best way to address the issue of fair credit risk in auto financing,” he said.
“This voluntary compliance program was structured to reflect a program by the U.S. Department of Justice that fully addresses fair credit risk in auto lending, while preserving the dealer discounts that are the hallmark of competition and consumer savings in the marketplace,” Carlson said.
(More on Carlson’s chairmanship goals below)
Policymaking and regulatory issues were also a key point when Carlson addressed the biggest hurdles for dealers. Auto Remarketing asked him what he sees as the biggest challenges for franchised dealers in 2016, and how these might be used as opportunities.
“There are many federal regulatory issues today that could hurt our customers with higher costs. Whether it’s eliminating competition in the auto finance market or enacting an overly broad and counterproductive recall policy, there are a number of ideas emanating out of Washington, D.C. that, while well-intentioned, could result in negative unintended consequences,” Carlson said. “In these areas, NADA is working hard to protect consumer rights, consumer choice and consumer savings.
“Vehicle affordability must be a bedrock principle for national policymakers. Affordability expands consumer choice and drives consumer acceptance,” he said. “Consumer acceptance drives fleet turnover. And fleet turnover achieves the desired results of economic growth, improved fuel efficiency and safer vehicles on our roadways that we all want.”
What’s needed to fix recall process
Going back to one of Carlson’s policy points — that of vehicle recalls — it’s safe to say the auto industry has never seen anything like the current recall environment. Citing data from the National Highway Traffic Safety Administration, Carfax said in a recent analysis that more than 51 million recalls were issued in 2015, more than any year prior.
The same bit of analysis from Carfax, released in February and reported on by Auto Remarketing, says there were over 47 million vehicles in the United States that had at least one unrepaired safety recall, at the time of the report.
Numerous parties, be they government- or auto industry-based, have received criticism related to recalls, whether it’s their timeliness, execution or otherwise.
Suffice to say, the actual process and logistics behind the reporting, fixing and adjusting to recalls has arguably had its challenges.
Some, like AutoNation, have responded by not selling any vehicle under an open safety recall.
We asked Carlson what NADA plans to do to help make the recall process smoother for dealers.
“The nation’s franchised new-car dealers are the solution to completing safety recalls, and fully support achieving a 100-percent recall-completion rate. But we all have to remember that not every recall presents the same level of urgency to the driving public,” Carlson said.
“In fact, the vast majority of recalls are for minor compliance issues that present virtually no imminent safety risk to the driver, passenger or other drivers,” he said.
“So, why is it counterproductive from a safety standpoint to treat all recalls the same? Because studies show that prohibiting the sale of any used vehicle subject to any open recall, including the most minor of recalls, could drive down the value of trade-ins by literally thousands of dollars,” he said.
“And if we devalue trade-ins, we automatically give consumers an economic incentive to turn to private market sales, where evidence clearly shows that the recall completion rates plummet. Plus, when a consumer’s trade-in is devaluated, it becomes more expensive for that consumer to purchase a newer, safer car.
“So rather than adopting an overly broad recall policy that would be harmful to consumers and detrimental to goal of fixing recalls, a far better approach would be creating a system that properly differentiates truly dangerous recalls from minor ones,” Carlson said. “Dealers also support data-driven policies that empower consumers, including NHTSA’s public awareness campaign aimed at reminding cars owners that they may have a safety recall.”
Additional NADA goals
Beyond policy and regulatory issues, Carlson said NADA aims to continue giving dealers the training tools they need — through programs at NADA Academy, NADA University Online, NADA 20 Group and its annual convention — to adapt to changes in the car business.
NADA is also aiming to bring younger generations of dealers and dealership managers into the “grassroots legislative advocacy” process with their respective dealer associations.
For additional coverage of the NADA Convention & Expo, see Auto Remarketing's Special Convention Issue.
Leveraging more than 25 years of providing what it calls “affordable and adaptable” solutions for dealers, Autosoft highlighted the four improvements of its dealer management system (DMS) to be unveiled in a sneak peek during this week’s NADA Convention & Expo in Las Vegas.
The company explained the advancements of the Autosoft system were driven to help dealership teams in four ways, including:
— Finalize deals more quickly and profitably
— Maximize service customer opportunities
— Turn parts, new, and used inventories faster
— Provide better customer experience.
Autosoft will begin rolling out its new system later this year.
“Dealers prefer and expect their business software to deliver the same user experience as their favorite personal applications,” Autosoft president and chief executive officer Bryce Veon said.
“We’ve delivered that experience with our newest DMS solution that makes it easier than ever to focus on sales, service, and profits,” Veon continued. “What hasn't changed is Autosoft’s commitment to affordability and unsurpassed customer support and training for all dealership staff.”
Recently, Autosoft was named the Highest Rated DMS for the second year in a row in the seventh annual DrivingSales Dealer Satisfaction Awards.
For more details, or to arrange a meeting during the NADA event with an Autosoft team member at Booth No. 2255C, visit autosoftdms.com/nada-demo.
On Monday, Audi announced the winners of the Magna Society Awards for 2015, spotlighting 93 of its top-performing dealers that showed “an exceptional level of customer service as well as strong business performance.”
A dozen of these stores were also lauded as 2015 Audi Magna Society Elite, which Audi terms “a special honor for superior achievements.”
Audi started the Magna Society to recognize the stories that go beyond the call of duty when it comes to business goals and sales targets. Within their dealership staff, these stores develop a strong representation of “the Audi brand and culture.”
The number of Magna Society Award winners has climbed in recent years. There were 91 winners for 2014 and 61 honorees for 2013.
“Each year the number of Magna Society Award recipients increases, a testament to the elite caliber of the Audi dealer network in the United States,” Mark Del Rosso, Audi of America's executive vice president and chief operating officer, said in the news release. “As Audi continues its rise as one of the top luxury brands in the country, the commitment of our dealer partners is one of the key drivers of this success.”
The 2015 Audi Magna Society Elite dealers are below:
Audi Concord, California
Audi Valencia, California
Audi North Orlando, Florida
Audi Atlanta, Georgia
Audi Des Moines, Iowa
The Audi Exchange, Highland Park, Illinois
Audi Burlington, Massachusetts
Audi Freehold, New Jersey
Audi Reno Tahoe, Reno, Nevada
Audi Devon, Pennsylvania
Audi Tysons Corner, Vienna, Virginia
Audi North Shore, Brown Deer, Wisconsin
The complete list of Magna Society award winners by state can be found here.
The ongoing blending of Cox Automotive assets continued on Monday as dealers received what the company called “a powerful boost” with the integration of Dealer.com’s advertising solution and rich data sets from Autotrader and Kelley Blue Book
Three of the leading brands Cox Automotive teamed to deliver Audience Targeting through Dealer.com, giving dealers what the company believes is unprecedented ability to reach high-quality, in-market vehicle shoppers.
With Dealer.com Audience Targeting, dealers can reach the combined 38 million unique website visitors that Autotrader and Kelley Blue Book see each month, and direct them back to their dealership website through Dealer.com’s machine learning and real-time bidding automation.
Dealer.com senior vice president Wayne Pastore described this combination of technologies and audience data as the most powerful way to reach shoppers on their path to purchase.
“This revolution in online advertising will unlock enormous potential for our dealers and their car shoppers and help them capture existing demand in their markets,” Pastore said. “We are uniquely able to bring together the key ingredients to deliver the industry’s most effective digital ads that make the entire online-to-in store process seamless, efficient and enjoyable.”
Dealer.com’s Audience Targeting can reach relevant shoppers at critical moments on their path to the showroom. Data shows that 80 percent of Autotrader visitors are in market to purchase a vehicle, and 54 percent of those visitors will purchase in the next 60 days.
Meanwhile, 68 percent of in-market Kelley Blue Book visitors will purchase in the next 60 days.
Dealers will be able to view demonstrations at the National Automotive Dealers Association Convention & Exposition beginning on Thursday in Las Vegas at booth No. 1124C. To schedule a demonstration at NADA 2016, go to this website.
The stars aligned for me this year in the sports world, at least in terms of scheduling.
Fresh off a 15-1 season and third straight NFC South crown, my beloved Carolina Panthers were amid a sensational run to the Super Bowl.
I was the sports fan version of a nervous wreck, so it’s probably a good thing for me that the NADA Convention & Expo — one of the most important conferences we cover all year and one that typically takes place during the NFL Playoffs — had been pushed back to the spring.
Final Four weekend, in fact.
But no worries. The sports scheduling stars aligned once more.
N.C. State (my alma mater) took care of that early on with a 16-17 season and was never in any danger of being a contender for the NCAA Tournament. So, my sports sanity will remain intact, as I will won’t be sweating bullets with every Wolfpack jump shot.
Even without NCSU in this year’s field, the three weeks of the tourney is still my favorite time of year.
And the NADA Convention is one of my favorite events to cover as a journalist — for many of the same reasons I get pumped about March Madness as a fan.
Like an arena before tipoff, it’s the buzz of activity. Walking through the exhibit hall for the first time as reporter, that might be the first thing you notice — just how many companies are set up, how many people are there, how much conversation is happening. It’s the entire industry in one spot.
Similar to the back-to-back-to-back-to-back-to-back games on that first Thursday and Friday of the tournament, the Friday and Saturday of the NADA Convention for a reporter is wall-to-wall interviews and press conferences.
Sure, it can be a long couple of days, but it’s fantastic. So much information, so many great story ideas. Scribbled up notepads and full recorders leave you with content for months on months.
The NCAA Tournament introduces you great newcomers to basketball greatness, like Florida Gulf Coast and George Mason. Likewise, there’s no better place to learn about the auto industry’s new startups and interesting new ideas than reporting at NADA.
We also love the heavyweight battles of the NCAA Tournament. Duke-Kentucky. Kansas-Carolina. And there’s certainly some “heavyweight” news from the big automotive players that’s seemingly always announced at NADA.
The opening rounds of the tourney — wacky and unpredictable as ever — have been completed, with the Final Four grand finale set.
But the electric madness of reporting at the NADA Convention is just getting started.
TrueCar is overhauling how it does business with dealers.
On Sunday, the company revealed a series of sweeping changes to its product offering, data policies, billing model and practices, consumer-facing advertising and website messaging — plus plans to hire more than 100 field services consultants to help dealers get the most out of TrueCar.
Some of these changes are already in effect, some are on the horizon.
These plans, shared with Auto Remarketing ahead of being made public Sunday, are part of TrueCar’s 2016 Dealer Pledge. They’re the culmination of a three-month process that began when president and chief executive officer Chip Perry arrived in December.
Perry hit the ground running, meeting with dozens of dealers over the course of two months, discussing the challenges they have had with TrueCar, as well as what worked well for them.
For the last month, he and the TrueCar team have been assembling and begun rolling out changes designed to foster a mutually beneficial environment for both dealers and consumers.
That’s the new philosophy at TrueCar. The way it does business must be a win-win for dealers and consumers, Perry said.
Perry talked with Auto Remarketing by phone on Saturday about those changes and what the new TrueCar is all about.
Three headlines
TrueCar’s pledge and the actions it is taking are detailed extensively in a 28-page presentation (scheduled to be posted to a website slated to go live Sunday evening, along with an accompanying video from Perry that can be seen at the top of this page), and in a letter from Perry slated to be sent to dealers on Sunday evening, as well.
Appropriately enough, Perry, once an executive with the Los Angeles Times, boiled it down to three “headlines” in his conversation with Auto Remarketing.
First headline: TrueCar is making substantial and important changes to its product to correct what Perry said has been detrimental to dealer profitability. The company is aiming to make TrueCar a better place to do business for dealers.
Second headline: TrueCar is revamping its data polices, billing model and billing practices.
Third headline: TrueCar is making changes in its consumer-facing advertising.
Prior to Perry’s official start date of Dec. 15, he said his top priority was to “to reach out and work personally with many dealers all across the country.”
He didn’t waste any time doing so. Two months was spent meeting with dealers, “very carefully cataloging tall those pain points,” Perry told Auto Remarketing on Saturday.
The TrueCar team has spent the past month crafting the new pledge, and actually rolling out some of the changes.
Reflecting the same approach when he arrived late last fall, Perry didn’t mince words when talking about the issues TrueCar has faced with dealers.
“We’re digging out of a pretty deep hole,” he told Auto Remarketing.
But the company has forged what Perry called a comprehensive and meaningful plan to address those problems. It was “no-holds-barred.”
When meeting with dealers, Perry told them to “give me the unvarnished truth.”
What worked for them? What didn’t work?
Perry recognizes that there are TrueCar Certified dealers who aren’t happy with the way the company did business. But the company is aiming for this new plan to help improve upon that.
Perry emphasizes that the “proof is in the pudding.” Don’t expect a rapid turnaround. It will be a gradual approach, again emphasizing the company is digging out of a big hole.
“I knew even before I joined TrueCar that big changes were needed, but hearing very directly about the concerns of dealers helped me formulate a new direction for TrueCar, one that is designed to make our marketplace produce a win-win for both consumers and dealers,” Perry said in the letter to dealers. “Some of the changes requested by dealers have already been made, some will happen over the next three months, and the rest will roll out over the balance of the year.”
He later adds in the letter: “We take these promises very seriously and we fully expect you to hold us accountable for delivering on them. The proof, as they say, will be in the pudding.
“As we proceed, we will keep listening to dealers and we will be making even more changes based on your ongoing feedback. If you would ever like to discuss any part of our Dealer Pledge, please feel free to contact me — I am always interested in hearing about how we can make TrueCar work better for everyone in our industry,” Perry said.
Product offering changes
The biggest takeaway here: TrueCar becomes less of a purely price-driven shopping. The changes will allow dealers to compete on factors other than price. Some of the more specific changes include:
- A more localized price curve instead of a regional price curve. That went live on Thursday.
- The estimated monthly payment has been removed, as consumers will now only see monthly payment info after he or she starts the payment calculation. That went live on March 16, with an enhanced version coming in the third quarter.
- Dealer cash won’t be automatically applied. That, too, was effective March 16.
- Removal of the dealer list page, which will happen in the second quarter. Perry said this list — an anonymous list consumers could see before filling out the registration — was one of the major pain points for dealers. The problem is that it allowed consumers to put pressure on dealers without having registered to be users. TrueCar is eliminating that page, meaning consumers have to register and then they will be introduced to actual inventory and pricing from specific dealers.
- In other words, dealers won’t see pricing from anonymous dealers before submitting a lead, which TrueCar said in its slides “commoditized dealers based on price only.” Instead of an unbranded dealer list page, there will be a dealer branding page (going live in Q2, as well), designed to give stores a chance to compete on attributes beyond price.
Perry said this process allows consumers to access a “broader array of info about the dealer” and make their decision on factors other than just price.
“By eliminating the non-branded dealer list page … we’re eliminating the use of this un-actionable information that has caused so much heartache for TrueCar (dealers) and non-TrueCar dealers alike, as well as consumers,” Perry told Auto Remarketing.
With the dealer branding page, we asked Perry if dealers will have the option to choose what attributes they highlight.
“Not just the option: the total control over it,” Perry answered.
In essence, dealers will have complete control over the “Why Buy From Me” content.
Additionally, TrueCar is doing away with the “virtual vehicles,” and replacing them with actual VIN-based offers. That happens in Q2.
So, instead of getting a non-branded price and a virtual vehicle, consumers will go into the dealer inventory that matches they car they configured, Perry said.
In April, TrueCar is upgrading its dealer tools to make it easier for stores to sell used cars, as well. Next month, dealers can send upfront offers on their used cars, the company said in its pledge. Dealers’ used cars will be brought in to TrueCar’s tool set as an extension of TrueCar’s current Create Offer flow, the company said.
“This updated tool will allow dealers to create custom offers on in-stock merchandise for used-car shoppers as well as alternatives for new-vehicle shoppers,” the company explained in its pledge.
Another move in Q2 will be TrueCar easing the process for dealers to punch in their TrueCar activities into their respective CRMs.
Redesign of ‘how we treat you as customers’
Some of the highlights here:
- TrueCar will pilot an optional subscription billing model in Georgia, which currently uses the pay-per-sale model, in the second quarter. A national roll-out is planned for later in the year.
- TrueCar aims to smooth out invoicing in the states using the pay-per-sale model. In Q2, TrueCar will give dealers the choice to get a consolidated invoice monthly.
- In Q2, the company is aiming to make the credit request process more amendable for dealers using the pay-per-sale model.
- Regarding the data policies, some key points: TrueCar is taking consumer non-sale data out of the “sales matching” process. The TrueCar pricing curve will utilize DMS data with permission only. The company is also planning on bringing in a third-party to “validate our strict adherence to our data policies.”
And the 100-plus field service consultants TrueCar plans on hiring in the next year. Perry said these will be “truly service people.” The goal is to have face-to-face interactions with TrueCar customers at least once a month.
Their focus will be on helping dealers learn about the latest technologies of the TrueCar tool, offering best practices and so forth. They will be there to help dealers maximize TrueCar; they “aren’t there to sell anything to dealers,” Perry said.
Changes to consumer messaging
For starters, you won’t see the “never overpay” in advertising messages. Instead, it will be more about “ultimate price transparency,” according to the slides. That goes live in Q2.
In mid-March, TrueCar adjusted its existing TV ads, as well.
“Previously, we focused on excessive time spent at the dealership and the hassle of negotiating a price,” the company said in its pledge. “Now we turn the conversation and focus on the ease of using TrueCar during the car-buying process.”
You can also expect to see more TV ad messages about the important of TrueCar Certified Dealers. The company is currently testing those ads, which will go live in the second half of the year. TrueCar also launched a “Dealer Spotlight” video series in mid-March that showcase “the important role dealers play in their communities.”
Lastly, TrueCar cleared the air on some concerns regarding F&I and trade-in product offerings potentially on tap down the road.
“Please know that we will only support indirect finance and will not offer third-party direct finance products through TrueCar.com. In addition, any Trade-In product we introduce will be based on a well-accepted wholesale valuation and will be offered on a dealer opt-in basis,” Perry said in the letter. “We hope that these clarifications will alleviate any concern that dealers may have about TrueCar’s future product offerings.”
Final word
In his interview with Auto Remarketing, Perry made it clear that this new approach was not just about his goals.
He said he’s “happy to lead the parade,” but he emphasized that the overall company is “energized” and “fully engaged” to make TrueCar a better experience for dealers.
As Perry put it, the entire company and its management team is “ready, willing and able” to put these changes into action.
