Seattle startup tied to Wagoner delivers cars for test drives
A new online service enables car shoppers to test drive vehicles without going to a dealership.
Tred, a Seattle startup with ties to former GM CEO Rick Wagoner, cuts dealership trips by delivering new vehicles for consumers to test drive and possibly purchase.
Tred drivers, not salespeople, deliver the vehicles wherever the shopper wants. The service ensures that dealerships can keep salesmen on the floor at all times, the company said.
People go to Tred's Web site or use its iPad application to pick a vehicle, or multiple vehicles, they want to test drive and indicate where they want the vehicles dropped off.
Once the Tred customers are confident and informed about what they want, they are connected to dealerships, Tred CEO Grant Feek wrote in an e-mail today. Several dealerships have signed on, Feek added, but he declined to identify them.
The service, which launches this spring in the Pacific Northwest, will offer five brands of minivans, compact SUVs and mid-sized SUVs that are popular in the region.
"When we tested the platform last fall, we delivered a wide variety of brands. Since we are narrowing our brand scope for our spring launch, we're in the process of focusing on fewer dealer partners," Feek wrote. "For launch, we will have a small sample of customer service-obsessed dealers for each brand that we deliver."
It was not clear how Tred will generate its revenue -- or whether its fees or commissions would be paid by dealers, manufacturers, or others.
80 percent conversion rate
Feek said Tred tested the platform last fall for six weeks and converted more than 80 percent of its shoppers into buyers.
"In the past 20 years, external forces have put added pressure on new-car dealers, and the Internet has been one of them. Our goal is to leverage the Internet to help dealers sell cars in a way that makes them as happy as our shoppers, and we're doing just that," Feek said.
Tred said last week that Wagoner, who was forced out as head of GM during the height of the government bailout negotiations in March 2009, was among investors who provided $1.7 million in seed money to help fund the startup. The company did not disclose Wagoner's investment.
Tred's nearest competitors are "ride and drive" events organized by automakers or dealerships that let prospective buyers sample vehicles outside the showroom, the company says.
One drawback of automaker and dealer-led events, however, is that they're aligned to certain brands.
"Manufacturers and dealers have natural allegiance to specific brands and sales goals. In contrast, our concierges demonstrate third-party impartiality and advocacy," Feek said.
During consumer research, the company found that some car shoppers -- especially families with children who have to transport strollers and deal with car seats -- dread visiting dealerships because they're often on the edges of metro areas.
Others may want to test drive vehicles, but shy away from it because they aren't yet ready to discuss a purchase with a dealer.
Feek said: "Unfortunately, shoppers may not be ready to talk about a purchase. Maybe they have other cars to try, maybe they're inadequately educated about price/features, maybe price negotiations make them uncomfortable or maybe they have a movie to catch."
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