Dealerships set to reap rewards of new venture

Australian new and used auto dealerships are set to benefit from a proposed joint venture with Cox Automotive Australia (CAA).

To enable the joint venture to take place, the existing dealer owners of CarsGuide are looking at buying out News Corp, which holds a 50% share in the company.

In order to do so, fundraising for the required $20 million commenced through a newly formed entity, DealerMotive Ltd.

The $20 million has now been raised with dealers seeing the benefits of being involved in the joint venture offering services for every aspect of the automotive ecosystem.

“The Cox Automotive Australia venture will be able to offer dealers many more products across the value chain from their suite of products from the USA in due course,” CarsGuide chief executive officer, Lauren Williams, told AutoTalk.

“We are investing in our dealer sales team to provide more comprehensive service and coverage for dealers. From a audience point of view we are number two in classifieds with nearly a million unique audience per month (Nielsen) and number 1 in editorial (Nielsen),” Williams says.

Williams is pleased the DealerMotive fundraising effort has been successful.

“We are very excited as we added many new dealers to the venture, and therefore inventory commitments, whilst the majority of our current investors invested more money in the venture.”

A total of 59 dealer groups representing about 600 dealerships around the country are expected to participate in the formation of the joint venture, which is expected to be finalised prior to the end of 2016, after going through the necessary shareholder and regulatory approvals.

Combined, the dealer investors who plan to participate in the Cox joint venture account for almost every new car franchise in the market and many geographic regions in the country.

Their combined selling power represents around one third of all new and used vehicle sales made in Australia.

When the deal closes, Cox Automotive Australia will own and operate CarsGuide, Manheim Auctions and Dealer Solutions. The plans to incorporate Xtime, another Cox Automotive business into the new structure are also under way.

Next-gen DMS provider in talks to land down under

Apart from the existing brands on offer, other Cox Automotive brands could be added to the market moving forward. Incadea, a global Dealer Management System technology provider is in discussions to establish operations in Australia, to service vehicle manufacturers and their dealer networks.

Incadea recently launched Dealer 4.0, a new dealer showroom concept empowered by software and state of the art technologies. Incadea describes it as, “A futuristic car showroom empowered by the Microsoft Cloud and Windows 10, and a customer centric strategy to transform automotive retail.”

The way it works is that customers use a touch screen powered by Windows 10 to visualise configuration options such as colours and trims. In-store tracking analytics enabled through Microsoft Kinect and Windows 10 provide insight into customer interest areas and dwell times, and sales associates stay connected on the move with Windows 10 tablets.

Dealer 4.0 can also tap into telematics data held in the Cloud to determine a consumer’s driving style, providing the capability to offer more personalised services such as customised insurance quotes.

Additionally, Autotrader, one of the world’s largest online classifieds website will integrate with CarsGuide, Kelley Blue Book and vAuto are also under review for this market.

David Blackhall, the chief executive officer of the Australian Automotive Dealer Association says “by investing in this new company dealers have demonstrated their commitment to the benefits that flow from increased competition”.

Cox Automotive – Cox Automotive Australia’s parent company – is the world’s largest provider of automotive services and technology to motor dealers and vehicle manufacturers, with operations in 27 countries from which they service more than 90 nations around the globe.