The Zeigler Automotive Group announced Tuesday the opening of two new stores — one Nissan and one Infiniti dealership — in Orland Park, Ill.
Side-by-side and named Orland Park Nissan and Orland Park Infiniti, the two stores opened on Jan. 7.
Zeigler AG cited the strength and growth of the two brands as the reasoning behind the purchase of the two franchises.
"Nissan and Infiniti are great brands and Orland Park is a great city," said Aaron Zeigler, president of Zeigler Automotive Group. "We've had outstanding success with BMW of Orland Park and wanted to expand our presence in the area; we are thrilled to add the new dealerships to our growing family of stores. Orland Park is a wonderful place to live and work, and we couldn't be happier to be an integral part of the community's continued development."
The two stores combined now offer over 400 new and 220 used vehicles. The group plans to add 20 new staff to the new dealerships.
BMW of Orland Park’s general manager Bill O’Hara now also serves as the general manager for both of the new locations.
Some of the amenities at the dealerships include spacious, modern showrooms and service areas, flat screen TVs, free Wi-Fi, complimentary beverages, retail areas, a playroom and an indoor car shop with air conditioned service bays.
Penske Automotive Group has bought a 49-percent equity ownership stake in a luxury dealership group in Japan known as the Nicole Group. The multi-franchise retailer operates out of Kanagawa and Tokyo, and it features a Rolls-Royce store, a Ferrari store, four BMW stores and three MINI stores.
The Nicole Group also has two standalone service shops and two used-car showrooms and is the exclusive Japanese importer and distributor of BMW Alpina vehicles.
Penske said its statement in the company will be handled “an equity investment, with its pro rata share of income reported as equity in earnings of affiliates in its income statement.”
Group chairman Roger Penske said in the announcement: "We are thrilled with the opportunity to enter the Japanese market with a strong and established local partner. The Nicole Group represents world-class brands and has been named the best BMW dealership in Japan a record seven times.
“As imports continue to grow market share in Japan, combined with the group's solid reputation in the marketplace, we expect to leverage the strength of the existing business while driving further expansion through organic growth and future acquisitions,” he added.
If you’re anything like the sports fans near Auto Remarketing’s offices in the area of North Carolina known as “Tobacco Road,” the word “Raycom” immediately brings to mind ACC basketball.
But Raycom Media’s tentacles go well beyond the Raycom Sports property with whom sports fans are familiar, including one recent transaction — its purchase of digital ad platform PureCars in late October — that has a direct tie to the car business.
According to its website, Raycom Media either owns and/or offers services to 63 TV stations throughout the U.S., plus a few production-related companies and other work interests.
As for how PureCars fits into the fold, it will be run as a separate business unit within Raycom, meaning “the automotive dealer community that knows us as the cutting-edge leading provider in the space will continue to see that,” PureCars founder and chief executive Jeremy Anspach said in follow-up interview with Auto Remarketing this month.
Sometimes, he said, a purchased company can lose a good bit of things like “culture and speed of new product,” after an acquisition.
Don’t count on that with this deal.
“One thing great about this acquisition is we are operating as a separate business unit,” Anspach said in the interview. “With that being said, one of the most exciting things we see from it is the additional resources we have, both in human capital and development, as well.
“Where we’re focused is, when you look at television as a medium, it’s always stimulated shoppers to learn,” he continued. “And before the Internet, the way they learned was, they’d go to the auto mile and start talking to dealers and test-driving cars, and then making decisions.
“Well, as we all know, 97 percent of auto shoppers — according to the book Google wrote, '(Winning the) Zero Moment of Truth' — they don’t behave that way anymore,” Anspach said. “They’re still stimulated by TV, but then they do online learning, and what they learn online is what drives them in.”
Given that, PureCars is aiming to knock down the walls separating TV and digital, he said.
Anspach said that 87 percent of TV viewers have a second screen with them while they watch (think: scrolling through sports scores on your iPhone while you watch the football game on TV).
For PureCars, it’s about connecting the watcher to that second screen once they see the TV ad.
“When you see a commercial that stimulates you, what do you do? You probably, on that second screen, start learning,” Anspach said. “And based on what you learn, you’ll either go down the buyer funnel or you start looking at other things.
“Or you stop looking at them altogether. So what’s exciting is, imagine seeing an incentive and when you’re on that second screen, we can connect the dots,” he added. “And by doing so, create synergy on the TV buy and also dominate on the digital side.”
More on Inventory Targeting
Less than two months after the purchase was announced, PureCars unveiled an Inventory Targeting feature that lets dealers take their daily inventory data and use it to allocate digital advertising spend.
Through this solution, which is within PureCars’ SmartAdvertising platform, dealers can view and earmark ad dollars based on the following:
— How well the inventory is merchandised
— The performance of those vehicles at their store and elsewhere in their market
So where did PureCars spot a need for this product?
“Inventory Targeting is something we’re very excited about because we have yet to see a dealership with an infinite ad budget,” Anspach said. “So, all dealers big and small have one. They have a budget. And when you have a budget, you have to make decisions.
“And the decision you have to make is, how do you spend these dollars in a way that generates the highest probability of creating more sales,” he said.
Anspach later added: “Where we see a need is, dealerships have large amounts of inventory and the inventory is not created equally as it relates to the specific vehicle. There are some vehicles on the lot that are very hot. These are vehicles high in demand with low supply. There are other vehicles that are poorly merchandised — these may be ones without quality photos or being priced away above market. Then there are vehicles where their other advertising is driving significant buyers to the vehicle details page.”
Bearing that in mind, dealers have to make decisions as to where their “finite resources” are going to be spent; they have to determine “which vehicles need a boost.”
The point is that Inventory Targeting can help dealers determine which vehicles it makes the most sense spending their ad dollars.
Another important piece of the product that PureCars emphasized was the relationship with traditional advertising.
“You can allocate the ad spend based on their inventory and factor in merchandising, etc.,” Anspach said. “But the dealership, or their ad agency, can let us know what they’re doing in traditional, whether it’s TV, radio, billboard, etc. and we can leverage that traditional buy to create the most synergy with the digital buy.”
Automotive data mining and trade-cycle management platform AutoAlert on Tuesday completed the acquisition of MotoFuze, a customer experience management (CEM) platform.
Officials indicated MotoFuze will be transitioned to a fully integrated product of AutoAlert. MotoFuze chief executive officer Mike Dullea and co-founder Tom Walls have been appointed as AutoAlert’s chief sales and marketing officer and chief technology officer, respectively.
Founded in 2013 by Walls and industry veteran Kendall Billman, MotoFuze has already generated attention in the industry through its CEM that can provide dealers with the ability to receive, assess and utilize relevant, real-time data in automation of sales and marketing efforts. The MotoFuze suite of products includes social media campaigns, content management and predictive analytics.
AutoAlert CEO Brian Skutta explained that tapping into these capabilities will allow AutoAlert customers to deliver increasingly customized offers to individual, in-market consumers.
“Dealerships are increasingly looking to improve their online engagement with consumers by leveraging data from multiple channels, and MotoFuze quickly proved itself as the best technology solution available today,” Skutta said.
“We saw first-hand that MotoFuze’s CEM made AutoAlert’s dealer solution even more powerful, and that can only grow when we are working as one organization,” he continued.
AutoAlert and MotoFuze had previously announced a partnership in October of this year, during which pilot dealers used both products for a more comprehensive sales and marketing solution.
“Early reports from dealers using MotoFuze alongside AutoAlert indicated that the combined solution was on track to account for as much as 20 percent of annual sales,” Dullea said.
“Auto dealers are only scratching the surface of how integrating detailed customer data can impact sales, and it is very exciting to now become part of AutoAlert to deliver next-level marketing intelligence,” continued Dullea, who co-founded dealership software firm VinSolutions in 2006 and led the company through a successful acquisition by AutoTrader.com in 2011.
The newly combined company blending AutoAlert and MotoFuze together will maintain its offices in Irvine, Calif., and Kansas City, Mo.
The majority owner of AutoAlert is HGGC, a middle-market private equity firm.
As you're likely aware, it’s not just the U.S. that is seeing a booming used-car market.
India, in particular, appears poised for “accelerated growth” — nearly 167 percent, to be more precise — on the pre-owned side.
Bearing that in mind, Cox Automotive announced a strategic investment in a division of Mahindra Group that includes 650 used-car franchised outlets throughout India, a used-car pricing guide, an auction platform and third-party inspection business.
Nagendra Palle is the chief executive officer and managing director of Mahindra First Choice Wheels Ltd., and was looking forward to having the Atlanta-based company as an investor.
“We welcome Cox Automotive as a strategic investor in MFCWL and look forward to a long-term, mutually beneficial association,” Palle said. “Cox is a marquee brand globally and it’s great to see them enter India with MFCWL.”
More specifically, Mahindra First Choice Wheels Ltd. is a multi-brand certified used-car company in India. Its business units include Indian Blue Book pricing guide, the eDiig auction platform and the third-party inspection company known as Autoinspekt.
“Our investment in Mahindra First Choice Wheels Ltd. furthers Cox Automotive’s strategic plans to create and grow used vehicle marketplaces,” said Joe Luppino, chief corporate development officer at Cox Automotive. “This opportunity allows us to partner with a company with a reputation of delivering high-quality used-car products and services to dealers and consumers in the fast-growing Indian automotive market.”
MFCWL is described in Cox Automotive’s news release as a company whose “vision is to build a used car ecosystem for India by bridging wholesale and retail channels while leveraging physical and online infrastructure.”
Officials added: “Its unique franchisee-driven business model has transformed the way used cars are retailed in India, offering consumers a trusted used-vehicle marketplace and providing dealers with a variety of used car services, including physical and online auctions, vehicle inspections and transport. Backed by industry leading certification and warranty products, MFCWL also offers an array of consumer services such as vehicle inspections, insurance and financing.”
To illustrate just how important the Indian market is for automotive, consider these statistics shared by Cox Automotive:
India has the sixth largest new-car market, with new-car sales projected to grow from 3 million in 2014 to 4 million in 2019, according to Automotive World data shared by Cox Automotive.
Meanwhile, used-car sales are expected to hit climb from 3.6 million to 9.6 million over the same time period.
So, when you think about India having the third largest online population, that opens to the door for dealers, shoppers and the overall auto business, Cox Automotive emphasized.
“There is vast untapped potential in the Indian marketplace,” added Luppino. “With a suite of products that serves dealers, consumers, financial institutions and insurance companies, Mahindra First Choice Wheels is well-positioned to create an organized ecosystem for the used car market and capture value from its expected growth.”
This move is just the latest in Cox Automotive’s international ventures. The company has invested in a used-car marketplace in China known as AutoSt., plus the BitAuto online car classifieds/content provider that’s located there, as well.
“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,” the company said in its news release.
The DARCARS Automotive Group announced Monday that it has added Honda of Bowie to its list of franchises, bringing the overall tally to 38 franchises in more than 20 locations.
Labeling itself as the largest group of car dealerships in the greater Washington, D.C., metropolitan area, DARCARS also said that the Honda dealership will immediately be renamed DARCARS Honda.
"We are making an important investment in DARCARS' future and furthering our mission to create the best place to work," said John Darvish, DARCARS’ president and chief executive officer. "Throughout our discussions with Honda of Bowie ownership, I have been extremely impressed with their innovative management, highly-motivated team and very profitable business. We look forward to welcoming Honda of Bowie employees and customers to the DARCARS family."
Phil Morelli, the president of Honda of Bowie, commented on why it made sense to join the DARCARS team.
"DARCARS brings expanded resources to the table that will enable Honda of Bowie to rise to new levels in sales and customer service," Morelli said. "The existing culture and business model at Honda of Bowie align well with those of DARCARS and we know that our team will be in good hands as they join the DARCARS team."
For more information on the DARCARS Automotive Group, visit it site here.
On Wednesday morning, AutoNation announced that the dealer group has signed an agreement to acquire 12 stores, including 31 franchises, in six Texas markets from Allen Samuels Auto Group.
Officials indicated the dozen stores located in the markets of Houston, Dallas-Fort Worth, Corpus Christi, Tyler, Ennis and Waco represent approximately $800 million in annual revenue and 19,500 retail new- and used-vehicle unit sales.
For AutoNation, officials calculated Texas will represent approximately 25 percent of total revenue, with 53 stores, 82 franchises and 5,300 associates, once the acquisition is completed.
The franchises to be acquired include Chrysler, Dodge, Jeep, Ram, Chevrolet, Hyundai, Mercedes-Benz and Sprinter.
AutoNation said this transaction is subject to customary terms and conditions, including manufacturer approval, and is expected to close in the first quarter of 2016.
“We are pleased to have the opportunity to add 12 stores throughout the state of Texas,” AutoNation chairman, chief executive officer and president Mike Jackson.
“This acquisition will enhance our brand mix in the state of Texas,” Jackson continued. “We also look forward to welcoming Allen Samuels' customers and 1,000 associates to the AutoNation family.”
In September, AutoNation completed the previously announced acquisition of a Mercedes-Benz store, an Audi store, and a Subaru and Volkswagen store from Valley Motors Auto Group in the Baltimore market. The previously announced acquisition of 13 stores from Carl Gregory Enterprises is expected to close in the fourth quarter.
Since the beginning of the year, AutoNation has announced acquisitions with approximately $1.7 billion in annual revenue. Once the Allen Samuels and Carl Gregory acquisitions are completed, AutoNation's total store count will be 265 and total franchise count will be 372.
Stephens is serving as financial adviser to Allen Samuels Auto Group.
Editor's note: Details about AutoNation's third-quarter performance and more are set to be included in future installments of Auto Remarketing Today.
Twenty-six hundred stores. As Auto Remarketing reported earlier this year, that is the number of dealerships nationwide that Lithia Motors' president and chief executive officer Bryan DeBoer maintains his company has on his radar as potential acquisitions.
With three third-quarter acquisitions under its belt, one of which includes the only Acura store in Honolulu, DeBoer said the fourth quarter is starting strong – with yet another purchase.
“The fourth quarter is off to a good start with the acquisition of Concord Chrysler Jeep Dodge Ram and Fiat in California,” DeBoer said in the retailer's recent quarterly earnings call. “Thus far in 2015, we have purchased or opened six locations with estimated annual revenues of approximately $220 million.”
Playing into the role of the group’s acquisitions are its earnings milestones. Following a milestone set by the company earlier this year of $7 per share, which the company anticipates exceeding early next year, Lithia’s management team went ahead and raised the bar a bit higher — to $8. What’s needed to reach it? More stores, more sales.
“To get to the milestone eight, we need about a billion dollars in additional acquisitions in revenue,” DeBoer said. “That’s something that we’re going to be looking at. I believe that could come before a recession would ever possibly hit.”
DeBoer mentioned that his company spends about half of its time looking at acquisitions to support its DCH strategy, focused on metropolitan areas.
The CEO says Lithia has looked at roughly 30 deals in the Tri-State area surrounding New York City and in Southern California. He said the retailer is pretty close sealing the deal on a few sizeable deals, which he said are larger in size compared to Lithia’s average-size acquisition.
He said the retailer is pretty close sealing the deal on a few sizeable purchases, which he said are larger in size compared to the average acquisition that Lithia makes.
When asked if Lithia was focused on larger buys, picking up smaller stores, or some mix in-between, DeBoer appeared open to any possibility.
“I think what we’re seeing is that there is a ton of opportunities, so we’re able to be selective on not only large groups but on our individual groups,” he said. “So far this year, we’ve done six acquisitions or open points. We really believe that the pipeline is full and that was maybe a little bit slower than what we would expect in the future.
“And I think it’s because there is such a vast array of selection. When we look at whether or not there are going to be a stable diet of one or two type of stores, I think we will have a balance of those.”
Chris Holzshu, Lithia’s senior vice president and chief financial officer, focused on making sure the company is prepared to make acquisitions when the timing is right.
“Looking forward, as we keep talking about acquisitions and being in the next phase of our growth plan, I think it’s important for us to make sure that we have a balance sheet that can acquire a significant number of stores if they come to market,” Holzshu said. “Before DCH, our leverage ratio was about 1.3 times.
“So, we’ve still probably got another year to get down there assuming that we don’t do a lot of acquisitions. But I think we feel that the acquisition pipeline is full right now and our leverage ratio will probably at least stay where it’s at or climb a little bit through next year.”
Maintaining a forward-looking approach, DeBoer commented on how even negative economic climates can present opportunities for Lithia to capitalize to continue its growth plans.
“I still think the biggest driver of acquisitions is that we went through a decade, or a half of a generation, of depressed values because of the recession,” DeBoer said. “I think that’s what’s really driving it. I think if there is some type of gloom, to some extent, like what happened a few months ago with the stock market, like what may happen again, that those type of events can be elixirs to creating more acquisitions.
“Right now there is just so many out there that the ability to be selective has been really good from our standpoint. And I think that has a pretty good runway for the next five to 10 years that we’ll continue to see that.”
Autobytel has added to its coffers yet again with the purchase of AutoWeb, a company that provides “an auction-based click marketplace” of in-market shoppers to dealers and automakers.
Autobytel, which previously owned about 15 percent of AutoWeb’s outstanding capital stock, purchased the company in an all-stock deal.
Autobytel said in its news release Thursday that it believes blending its own lead-generation and customer-acquisition tools with the analytics platform that AutoWeb brings to the table should “further improve the overall delivery of high-converting, in-market consumers to dealers and OEMs.”
Autobytel president and chief executive officer Jeff Coats said in the release: “The addition of AutoWeb should dramatically strengthen our position as a technology leader in the online automotive industry. AutoWeb's proprietary platform, combined with our cutting-edge analytics and consumer acquisition strategies, will provide even more effective and valuable product offerings.
“These enhanced offerings will help dealers and OEMs better leverage their investments in website properties, especially as dealers increasingly shift advertising budgets from print to digital,” he added.
"This acquisition also brings us a world-class technology development team with proven expertise in the clicks and display ad marketplaces," continued Coats. "In fact, AutoWeb's founders have scaled several online companies in the U.S. and internationally that were sold at significant premiums, including the Inc. 500-listed BrokersWeb and, at the time, one of the largest online ad networks in Latin America, ClickDiario. Their addition to our team, coupled with the synergies from our technology and data methodologies, positions us to capitalize on several different verticals within the growing online automotive industry."
AutoWeb CEO Matías de Tezanos added: "The AutoWeb team is very excited to join a prominent leader and pioneer in the online auto industry. We look forward to providing our technical expertise and advanced methodologies to Autobytel's broad suite of products, while further building on the success of our revolutionary pay-per-click platform."
To borrow some dealership vernacular, the delivery of Dealertrack Technologies to Cox Automotive finally rolled over the curb on Thursday morning.
Cox Automotive said it completed its acquisition of Dealertrack in an all-cash tender offer to purchase all of the outstanding shares of Dealertrack.
The transaction is valued at approximately $4 billion, or $63.25 per share of Dealertrack common stock. As of Thursday, the common stock of Dealertrack will cease trading and will no longer be listed on the NASDAQ Global Market.
Also coming to fruition on Thursday, Dealertrack completed the sale of its Inventory+ business to DealerSocket in an all-cash transaction for approximately $55 million.
Under the terms of that deal, the divested Inventory+ assets include the AAX product in the U.S. and Canada, as well as eCarlist websites. In addition, officials indicated approximately 200 employees transition to DealerSocket with this sale.
Various regulatory hurdles as well as securing a majority of tendered Dealertrack stockholder delayed culmination of Cox Automotive’s acquisition five times since the company first announced the move back in June. Now executives highlighted that together Cox Automotive and Dealertrack will have even broader capabilities for helping customers navigate a rapidly changing automotive marketplace and grow their business across the value chain.
They added the combined companies will provide comprehensive, open-choice solutions that drive efficiency and deliver greater value to consumers, dealers, finance companies, manufacturers and the overall automotive industry.
“The team members from Dealertrack have built an outstanding company and I am excited to welcome them to the Cox family. This combination will truly open new doors for our clients, team members and the industry as we drive even greater innovation and provide even better solutions to our clients,” Cox Automotive president Sandy Schwartz said in the news release.
“Our goal is a seamless transition, and over the coming months our integration teams will work to capture the best of both organizations,” Schwartz continued. “Starting today, we are moving forward as one organization that is passionately pro-industry, committed to open choice and dedicated to strong partnerships.”
Dealertrack chairman and chief executive officer Mark O’Neil also shared his assessment of what the uniting with Cox Automotive means.
“This combination brings together some of the best people in the industry with strong common values,” O’Neil said.
“I want to extend my appreciation to all of our Dealertrack team members for the foundation they have built, and thank my new Cox Automotive colleagues for the warm welcome as we join our new family,” he continued. “Working together, we will fully unlock the potential of our combined brands and teams to serve our clients.”
BDT & Company and Citigroup Global Markets served as financial advisors, and Wachtell, Lipton, Rosen & Katz served as legal counsel to Cox Automotive. Evercore acted as financial advisor and O'Melveny & Myers served as legal advisor to Dealertrack.
The deal came to a close less than two days after the Department of Justice created a pathway as well as instructing Cox Automotive in regard to using Dealertrack’s interest in Chrome Data Solutions.
Meanwhile, DealerSocket is not new to the acquisition business.
In an attempt to present customers with a complete automotive platform, DealerSocket acquired DealerFire, FEX DMS, and AutoStar Solutions in January, February and May of this year. The company insisted the addition of Inventory+ bolsters DealerSocket’s platform.
DealerSocket CEO Jonathan Ord stressed that Inventory+ is an innovative and comprehensive inventory management solution that can provide dealers data insight and analytics with rich mobile and workflow capabilities. The Inventory+ TrueTarget and TrueScore features can help dealers “win in the marketplace” by assisting them stock the right vehicles at the right time and at the right price.
“We are pleased to be enhancing DealerSocket's extensive website solutions, customer relationship management, training and DMS solutions with the highly complementary inventory management services available through Inventory+,” Ord said.
“We look forward to welcoming the Inventory team to our organization and to working together to ensure a smooth transition for our new customers,” he went on to say.
