AutoNation Inc. has excluded luxury franchises from its rebranding campaign and no-haggle sales policy.
On Dec. 20 the company plans to put the AutoNation USA b rand on 13 dealerships in the Tampa Bay area complete with no-haggle pricing. But three luxury dealerships in the market that are owned by AutoNation - one Cadillac and two Lexus stores - have been excluded from the campaign.
The nation's largest dealership group has decided the AutoNation USA brand and no-haggle pricing strategy should apply only to volume makes.
'Luxury brands are a different case. Luxury buyers have different needs. We need to treat them separately,' said Mike Maroone, president of AutoNation's retail operations. Based on input from AutoNation's luxury car dealers, the no-haggle approach does not work well on a low-volume, high-margin product, said Maroone.
That exemption was something of a surprise, since AutoNation appointed former Mercedes-Benz executive Mike Jackson as its CEO. As president and CEO of Mercedes-Benz USA, Jackson reduced the dealer discount to encourage non-negoti able pricing at its dealerships.
But in Mercedes' case, the pricing applies to all Mercedes dealers, Maroone pointed out. Because the policy is universal, there is less chance for dealers of the same make to dramatically undercut each other's prices.
Maroone said the decision to exclude luxury brands happened well before Jackson arrived.
Some luxury automakers - including BMW of North America, Cadillac and Lexus - were concerned their brands might take a back seat to the AutoNation USA brand. As a result, the Fort Lauderdale, Fla.-based chain promised these manufacturers it would apply the brand only to high-volume, mid-priced makes.
Tampa Bay is the second market in which the company's new-vehicle dealerships have all been given the AutoNation brand. Denver debuted the new brand at Christmas time last year. AutoNation chose Tampa to continue the rebranding effort because of the concentration of dealers hips in the market, some of which already practice no-haggle sales. The chain would not disclose its market share for the Tampa area.
The Denver stores have seen dramatic increases in market share and same-store sales, which applies to stores owned at least a year. In the third quarter, same-store revenue gains rose more than 30 percent and same-store new vehicle unit sales grew more than 55 percent.