Pioneers Hitch Their Wagons

It's two Internet pioneers hitching their wagons together.

AutoTrader.com, a third-party, online automotive marketplace, will acquire vAuto, 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 as vAuto allow 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.