The nation's largest privately held dealership chain has teamed up with the same venture capital firm that helped launch Amazon.com and Netscape to create a dealer-owned online buying service.
Asbury Automotive Group of Conshohocken, Pa., has entered a partnership with Kleiner Perkins Caufield & Byers to form Greenlight.com, a cross between a dealer Web site and an online auto broker. The company says it has raised more than $15 million in venture capital so far and expects to raise more capital in the first half of this year, but declined to reveal further details. Greenlight.com compares itself to Carsdirect.com, an online service that buys cars from dealers for resale to online customers at a fixed price.
Greenlight.com says it will be more dealer-friendly than other buying services. While some services let customers skirt dealerships, Greenlight.com will give dealers direct contact with customers. The company will let dealers handle most of the customer follow-up, as well as vehicle delivery.
'You really need to start with the brick-and-mortar operation,' said Todd Collins, 38, CEO of Greenlight.com. You need strong auto retailing expertise in order to build a Web business that makes sense.'
Greenlight.com says it will not play favorites. Though Asbury is the founding dealership group, Greenlight.com will seek other major dealer investors and will operate as a separate company.
'We'll be looking for Internet-savvy dealership groups with multifranchise coverage in major markets,' said Tom Gibson, CEO of Asbury. The chain has more than 70 dealerships in 10 states with $4 billion in annual revenues.
Here is how Greenlight.com works:
1. Customers describe the vehicle they want and designate a state for delivery.
2. Greenlight.com provides a guaranteed no-haggle price. If the price is right, customers complete an online order form. Greenlight.com promises a dealer will get back to the customer within 24 hours with a confirmed delivery time.
3. The customer takes delivery of the vehicle at the dealership.
Dealers receive exclusive territories entitling them to first crack at all the Greenlight.com customers in their area. But the dealership must respond within 24 hours or the buying service could send the customer to another dealer. If the dealer does not have the requested vehicle in stock, Greenlight.com will help arrange a dealer trade.
Greenlight.com does not charge dealers fees because it makes money off a markup on the vehicles. Dealers do not have to use Greenlight.com exclusively. They are free to continue their relationships with other online buying services and to keep receiving leads from their own stand-alone Web sites.
Greenlight.com services are available in Atlanta; Greensboro, N.C.; and Orlando and Jacksonville, Fla. The national rollout will begin in early spring.