NASHVILLE -- A lead-generating startup is expecting manufacturer pushback this week when it opens its second new-vehicle test drive center at a shopping mall in Cherry Hill, N.J.
“Some automakers believe we are violating franchise agreements,” says Todd Marcelle, CEO and co-founder of the Philadelphia venture GoMoto. “We are not.”
GoMoto intends to set up permanent drive-and-compare centers in mall parking lots around the country, where consumers can get behind the wheel of competing cars from competing dealers.
It opened the first center with just four competing mid-sized cars at King of Prussia Mall outside Philadelphia last winter. It plans to go live with the second center at Cherry Hill Mall on Friday with more than 40 new vehicles from at least 10 local dealer groups and 18 brands.
Marcelle and his backers hope to make money by delivering sales leads to participating dealers -- passing along interested shoppers to the dealerships they want to visit after a test drive.
But there already is resistance to the idea, he says. Marcelle says a small number of manufacturers have warned potential dealers that GoMoto’s permanent test-drive concept bears too much resemblance to a vehicle sales outlet.
Marcelle says he expects some of the participating dealer groups to receive cease and desist orders from their factories after the Cherry Hill site opens.
He says GoMoto specifically selected New Jersey as a site after a New Jersey Motor Vehicle Commission ruling in March to strengthen the protection of franchised dealers there. That ruling was in response to Tesla Motors’ bid to sell factory-direct autos in the state, which the commission blocked.
Franchised retailers are free to market themselves anywhere they please -- even putting up billboards across the street from a same-brand dealership. But factories maintain the peace between competing dealers by tightly controlling the locations where sales can take place.
“We are not selling cars,” Marcelle clarifies. “We are just getting interested shoppers in touch with dealers.
“Car dealers have been putting cars on display in shopping malls for 30 years. All we’re doing is taking it to the next level -- enabling customers to get in and drive the cars, learn about them and connect with the dealer who sells them.”
Marcelle, a Washington, D.C., entrepreneur, created GoMoto with two partners: New Jersey Volkswagen dealer Benjamin Catanese and Marc Rubino, owner of the vehicle marketing company Redline Automotive Merchandising.
GoMoto plans to charge dealers $750 to $1,250 for each vehicle they display at the mall. GoMoto directly employs the personnel who will conduct the test drives and distribute sales information about each vehicle.
“This is a disruptive concept, but it’s disruptive marketing,” Marcelle says. “We don’t want to disrupt the dealer franchise system -- we want to support it. Everyone knows that consumers are less enthusiastic about visiting car showrooms today, for whatever reasons. This is a way to let them test drive a car that interests them before they decide to go to the dealership.
“But they still have to go to the dealership to make a purchase.”