It's two Internet pioneers hitching their wagons together.
AutoTrader.com, a third-party, online automotive marketplace, will acquire , a leading provider of advanced software for dealership used-vehicle management, pricing and inventory optimization.
Both companies in their own right and own ways are part of the Internet-driven auto-retailing revolution.
“Over the past decade, the Internet has enabled consumers to have a tremendously more transparent view of used-vehicle availability and pricing on a local, regional and national basis,” says AutoTrader.com President and CEO Chip Perry, noting more than 75% of today's car buyers shop online.
Firms such as AutoTrader allow dealers to list their inventory on heavily visited third-party sites that also give customers an array of vehicles to shop for by using their computers and, now, mobile devices.
Meanwhile, firms such asallow dealers to use real-time market-demand data to buy the best-selling used-car inventory and price it properly.
vAuto founder Dale Pollak, a former dealer, preaches what he calls “velocity” pricing. That means pricing to quickly turn inventory, not to hold out for the highest gross possible.
Pricing too non-competitively runs the risk of entering the deep and dark waters of aging inventory that bobs unsold in the used-car lot.
“The change in the way consumers shop for cars has created a strong need for dealers to efficiently manage and merchandise their vehicles in a way that ensures they remain competitive,” Perry says.