Cars.com chief executive officer and president Alex Vetter explained why the company’s decision to acquire DealerRater goes way beyond just another sales tool within its service portfolio it can provide to dealerships.
In a way, Vetter described the pending transaction first announced on Tuesday morning basically as a move to protect dealerships from losing their sales business to upstarts that are aiming to carve away vehicle turns through a wide array of new technological approaches.
“I think it’s an important time in the auto industry because there are so many new peer-play digital companies coming into our industry, pushing the new experience or the new way to buy,” Vetter told Auto Remarketing in an exclusive phone conversation.
“We believe inherently that local dealers are still people’s best bet,” he continued. “Some lack the tools and technology to amplify what great experiences they’re providing in each of their local markets. We’re excited to help dealers harness the power of word-of-mouth marketing to amplify their customer sentiment, which we know is extremely positive.
“The media tends to focus on the one or two bad examples that are bound to happen in a big category with a big-ticket item,” Vetter went on to say. “We like to help dealers develop their own media channel to help get the word out about the great customers they’re solving problems for each and every day. There’s a lot of great opportunities here for our clients.”
Part of that opportunity resides with the potential of combining what DealerRater offers — a compilation of consumer opinions about a store’s sales and service department — with what Cars.com provides — vehicle inventory listings as well as research and other information to help individuals select a model that fits best.
“As you’ve seen over the last five, six years, consumer reviews have become a really important ingredient for all forms of e-commerce, not just automotive,” Vetter said. “You look across every category, and you could easily collect and read about prior people’s experiences with products or service providers. In the automotive industry, the competition we know is always high. Reviews are increasingly becoming one of the key decision points in helping consumers decide to they go to A or do they go to B.”
Beyond just opinions, Vetter pointed out that the combination of Cars.com and DealerRater should provide stores with a gateway to shoppers during their entire online journey to a purchase.
“What we’ve seen with DealerRater is consumers are using this last stage as an important check-in,” he said. “If you look at the audience and go to Cars.com, you tend to have a six-month purchase horizon. If you go to our mobile devices, you tend to be on almost a three-month purchase horizon on average and obviously some on a much shorter term. But when you look at DealerRater, your purchase horizon is about four weeks. “
“(The acquisition) allows Cars.com to help our dealers reach potential buyers at all stages, from the research to the vehicle selection to the dealer selection. It ensures (dealers are) in front of people when they’re making important decisions,” Vetter went on to say.
Cars.com carefully arrived at this important decision, too. Vetter described the “practical” methodology the company used.
“We’re very practical with our investors and acquisitions,” he said. “We want to make sure we find businesses that are complementary strategically, financially, culturally and operationally. I think we found that in DealerRater.
“They’ve got the best products in the industry, but they lacked the sales force of any scale,” Vetter continued. “Cars.com has invested hundreds of millions of dollars building out a robust sales network. Now we have a new product and solution we can introduce to the marketplace. There’s a lot of complementary and synergistic fit between a world-class product with a world-class sales force and being able to bring it to our 20,000-plus dealer relationships, and soon to manufacturers as well.
“The deal has a lot of win-wins for both sides that I think made this deal stand out,” he went on to say.
Auto Remarketing closed it conversation with Vetter by asking about what the impact this transaction might have on Cars.com a year from now — a span that might seem like centuries in technological terms in light of how quickly advances are made. To answer the question, Vetter returned to a thought about the traditional place dealerships have in the automotive market.
“We think that dealers are still spending half of their marketing budgets on traditional media, yet most people tend to ignore those mass-marketing messages and go online to decide on what to buy and where to buy it,” Vetter said.
“A year from now, what I would like to see is dealerships’ profitability increase because they rely less on expensive, large-scale traditional advertising and rely more on tapping into their own customer base to share and socialize how great it is to do business with them so that there aren’t this new crop of digital retailers that are coming into the industry,” he continued.
“I would like to see those businesses go by the wayside and more local dealers maintain their position of strength in the local market as the place to buy, trade and service their cars,” Vetter went on to say.
Cars.com announced on Tuesday morning that the company has entered into an agreement to acquire DealerRater, one of the industry's largest automotive consumer review websites.
Officials indicated the transaction is subject to regulatory approval and customary closing conditions, and is expected to close by the end of August. Terms of the transaction were not disclosed.
The companies pointed out reviews have become critical to the car buying process, with 79 percent of car buyers and 68 percent of service customers reporting that review sites are one of the most helpful resources when selecting a dealership.
“We are pleased to bring DealerRater into the Cars.com family of industry-leading products and people as we create the largest dealer review platform in the automotive sector," said Alex Vetter, chief executive officer and president of Cars.com.
“With this acquisition, Cars.com has solidified its position as the leader in online automotive reviews and the preeminent authority for car shoppers and owners on what to buy, where to buy and who to buy from,” Vetter continued in a news release highlighting the development also shared by Automotive News and The Banks Report.
Since Cars.com launched its reviews in 2011, the company insisted it has maintained its transparent model for generating consumer feedback, which can better serve shoppers and customers. The addition of DealerRater and its review database further strengthens this value proposition, according to executives.
“We are happy to be joining Cars.com and are proud to share a similar foundation,” DealerRater chief executive officer Gary Tucker said.
“DealerRater is uniquely positioned to lead the industry transition to finding not only the right dealer, but connecting consumers with the right person at the right dealer,” Tucker went on to say.
Cars.com might be discussing this acquisition and more during its workshop at the CPO Forum, the segment of Used Car Week dedicated to certified pre-owned vehicles. Used Car Week runs Nov. 14-18 at the Red Rock Resort and Casino in Las Vegas.
On Monday, Holman Automotive said it has completed its acquisition of Kuni Automotive.
As they did when the transaction was first announced back in April, Holman officials said the terms of the deal will not be disclosed.
The Kuni Automotive dealerships located in Washington, Oregon, California, Colorado and Kansas that were acquired will now operate as “Kuni Automotive, a Holman Enterprise.” The deal doubles Holman Automotive’s retail business, which will now have:
—More than $3 billion in annual revenue
—40 dealership franchises and 19 brands at 34 locations
—Nearly 3,000 employees.
The company insisted this acquisition makes Holman Automotive one of the largest privately owned dealership networks in the nation. Holman’s existing dealerships are located in New Jersey, Florida and Pennsylvania.
In addition, officials pointed out the transaction will positively impact the Wayne D. Kuni and Joan E. Kuni Foundation, a charitable foundation that has supported cancer research and worked to enhance the lives of developmentally disabled adults since 2005.
As the majority stakeholder in Kuni Automotive, the Kuni Foundation will receive funding that will help to support its philanthropic work well into the future. The foundation expects to be able to broaden the scope and geography of its charitable outreach as well.
“This acquisition aligns with Holman’s strategy of investing in and growing our retail business outside of our existing platforms,” said Melinda “Mindy” Holman, chairman of the board of Holman. “But it is important to recognize that our two companies are a great cultural fit, which was a very important consideration to us as we went through this process.
“We look forward to sharing in the success we will enjoy together as we continue to define what it means to be a leader in the automotive industry, in our own communities and beyond,” Holman continued.
Former Kuni Automotive chief executive officer Greg Goodwin, who remains an integral part of the company, said he is excited for the Holman and Kuni employees who will benefit from the combination of the two dealership networks.
“Team members from both the Kuni and Holman sides of the deal will have the opportunity to explore new career opportunities within the larger organization and will learn a lot from one another, to the benefit of our customers,” Goodwin said.
Holman added that it plans to remain a privately owned company “as it continues to grow and flourish.”
Integrated Auction Solutions has purchased AWG Simulcast and AuctionMaster Technology.
The company announced the acquisition of AWG, a simulcast provider to independent auctions, and AMT, an auction management system, on Thursday.
“Our corporate mission has long been to protect the interests of independent auction owners,” IAS chief executive officer Alexis Jacobs said in a news release. “We will continue to serve and innovate for the industry.
“Greg Levi will serve as a managing member of IAS. Greg brings experience and discipline to our software development efforts through his background with Digital Motorworks, vAuto and Finance Express,” Jacobs said. “He shares the vision of enabling the auction community to unite and compete in a very competitive environment.”
IAS said that the new company will retain all current support, sales and development assets.
AutoNation announced that is has signed an agreement to acquire Centennial Chrysler Jeep in Denver. This will be the company’s 18th Denver-area store, and its 30th FCA store.
Last year, this store sold more than 3,000 new and used retail vehicles, with about $110 million in annual revenue. AutoNation owns and operates 367 new vehicle franchises nationwide.
“We are pleased with the opportunity to expand the AutoNation brand in the Denver market,” Mike Jackson, AutoNation’s chairman, said in a news release. “This acquisition will complement our existing footprint on Arapahoe Road, an attractive auto retail location. We look forward to welcoming Centennial Chrysler Jeep and its 83 associates to AutoNation.”
The company expects to close the acquisition in the third quarter of 2016.
KAR Auction Services on Wednesday announced it has acquired GRS Remarketing Limited (GRS), a subsidiary of Greenhous Group Limited.
“During the past 20 years, GRS has established a successful online vehicle remarketing business in the UK through robust technology, effective sales and operation, a healthy buyer network and strong relationships with commercial customers,” Jim Hallett, KAR chief executive officer and chairman, said in a news release. “KAR is committed to international growth, and the acquisition of a leading technology business like GRS complements our wide range of vehicle remarketing services.”
GRS will be renamed ADESA UK once the sale is complete. Jonathan Holland, vice president of business development for ADESA UK, will assume the position of managing director.
"With more than 30 years in vehicle remarketing in both the UK and mainland Europe, Jonathan possesses the experience and reputation to successfully build our UK business," said Benjamin Skuy, executive vice president of international markets and strategic initiatives for KAR.
This is KAR’s second acquisition in the United Kingdom, following the purchase of salvage company HBC Vehicle Services in June 2015.
Last month, TradeRev UK announced a partnership with Arval to provide upstream remarketing services for a luxury segment of the leasing firm’s UK portfolio. KAR business unit ADESA holds a 50 percent stake in TradeRev.
“We view the TradeRev partnership and GRS acquisition as strategically complementary,” said Skuy. “Along with other KAR services we intend to bring to the UK market, these businesses will position ADESA UK as an exceptionally formidable competitor.”
ADESA’s recent footprint growth in the Sunshine State is now finalized.
The business unit of KAR Auction Services announced on Tuesday that it has successfully completed the acquisition of Sanford Auto Dealers Exchange (SADE) in Sanford, Fla.
This location expands the ADESA’s presence in the Florida market and joins four other ADESA auctions in the region: ADESA Sarasota, ADESA Tampa, ADESA Jacksonville and ADESA Ocala.
The auction will be renamed ADESA Orlando, and Mike Tumminello, former president of SADE, will remain as general manager.
“We are pleased to officially welcome Mike and his knowledgeable team to ADESA, and look forward to working with them to bring our entire suite of remarketing services to customers throughout central Florida," ADESA president and chief executive officer Stéphane St-Hilaire said in a news release.
ADESA Orlando has six fully automated auction lanes, along with full-service reconditioning facilities, including a body shop and mechanic shop. It is a modern facility with 70 acres, conveniently located just north of Orlando, near the Interstate 4 and 417 Greenway.
This transaction includes The Ocala Auto Dealers Exchange (OADE) in Ocala, Fla. ADESA indicated this auction's operations will be combined with and moved to the ADESA Ocala location.
Greg Miller is embarking on his own dealership journey.
Independent of the Larry H. Miller Group of Companies (LHM Group), Greg Miller announced the acquisition of his first dealership on Wednesday with the purchase of Bob Baker Toyota in San Diego. This dealership will be renamed Greg Miller Toyota and will be operated under his new enterprise, Greg Miller Automotive San Diego.
“It has been a dream of mine for nearly 30 years to have my own dealership,” Greg Miller said. “When an associate at Toyota approached and encouraged me to pursue this opportunity, I realized this was a way to fulfill my dream and to continue to be a part of the community I love here in Utah.”
Miller will continue to be actively involved on the LHM Group board of directors and in serving as the Utah Jazz representative on the NBA Board of Governors. He will maintain his Salt Lake City residence and will continue to also serve in several religious and civic capacities, including on the board of the Utah Office of Tourism.
Miller has more than 30-years of experience in the automotive industry. He began his career by working as a lot attendant at his parents’ first store, Toyota of Murray. Over the years, he has held a variety of management roles within dealerships and the LHM Group.
“Greg’s new venture allows him to embrace his entrepreneurial side while remaining deeply committed to his LHM Group board position and the Utah community. He has our family’s full support as he pursues this opportunity,” said Gail Miller, owner of LHM Group.
Greg Miller elaborated more about what prompted this decision.
“I’m excited to begin this new venture in San Diego with Toyota, a brand I have decades of experience and familiarity with,” he said. “Seller Bob Baker is a pillar of the San Diego community and I’m pleased to continue to carry on Bob and my family’s traditions of doing business the right way and giving back in the community.”
Miller considers employees the foundation for a great customer experience, and with this acquisition, current employees will transition with the store.
“Greg’s reputation, his business style and his philanthropic nature convinced me that he was the right person to purchase my Toyota dealership,” Baker said. “I know my Toyota employees and customers will be well cared for, and I look forward to continuing my focus on community giving.”
The newly named Greg Miller Toyota is located at 6800 Federal Blvd. in Lemon Grove, Calif.
J.D. Power has a buyer.
McGraw Hill Financial said in a news release Friday afternoon it has reached a definitive agreement to sell that business unit to global alternative investments firm XIO Group.
The cash deal would be $1.1 billion.
The deal is expected to close in the third quarter.
“We are very pleased with this outcome. The transaction represents good value for our shareholders and positions J.D. Power for continued success,” McGraw Hill Financial president and chief executive officer Douglas Peterson said in the statement. "Our portfolio will now be even more focused on financial intelligence businesses with a common set of attributes. The businesses are scalable, they are global and they all have market-leading positions."
J.D. Power president Fin O’Neill added: “We are thrilled that XIO Group recognizes the value of the J.D. Power brand and is committed to maintaining our core brand identity and values while helping us grow and expand. We believe this next chapter will allow us to increase our insights across a broader spectrum of consumer interaction, a more extensive global footprint and an increasingly digital, connected and mobile society.”
Cox Automotive is expanding its global footprint by acquiring a majority shareholding in Molicar, a Brazilian vehicle valuations business.
Based in Sao Paulo, Cox Automotive said Molicar is widely acknowledged as setting the “industry standard” for valuations in Brazil and represents a strategic fit for the company, which already owns the Kelley Blue Book brand in the United States along with JingZhenGu in China.
“We expect the deal to complete in early May at which point the addition of Molicar will mean that we have valuation propositions in the world's top three used vehicle markets,” said John Bailey, president of Cox Automotive International.
“This partnership represents a very exciting development that further enhances the range of products and services that Cox Automotive is able to offer to clients across the globe,” Bailey continued.
Molicar currently facilitates around 13 million vehicle valuations a year and has a vehicle catalog that contains 22,000 different models and prices that are updated weekly across 12 different regions.
Molicar founder Flavio Molica said, “This partnership will ensure that Molicar is equipped with leading-edge technology solutions from Cox Automotive that support our clients in the finance, insurance and vehicle trading sectors by enabling us to streamline the complex process of buying, selling and trading in vehicles in Brazil.”
Cox Automotive recapped that it has aggressively expanded its international footprint in the last several years, including the recent purchase of Dealer Solutions, an automotive software solutions business in Australia.
In addition to Dealer Solutions, Cox Automotive’s international investments include:
— Mahindra First Choice Wheels, India’s largest multi-brand certified used-vehicle company
— China’s AutoSt., a used-vehicle marketplace for dealers and consumers
—BitAuto, a leading online provider of car classifieds and car content.
The company said, “This venture, along with other investments, such as the creation of RMS Automotive and the purchase of Brazil’s CarBizz, further strengthens Cox Automotive’s commitment to the global automotive marketplace.”
