IMotors.com, a San Francisco Internet company that finds buyers for used vehicles, operates in 17 states. After a customer specifies a vehicle, iMotors finds the vehicle, buys and refurbishes it, and ships it to the customer - usually at a cost below Kelley Blue Book value. Newly hired CEO Lloyd Ward, former CEO of Maytag Corp., and president and founder Adam Simms, talked with Staff Reporter Arlena Sawyers at the National Automobile Dealers Association convention in Las Vegas this month.
How will the softening new-car market affect you? Do you expect to get more business as a result?
Ward: I think that is yet to be determined. But the consensus is that as the overall market softens, value becomes more important to consumers, and price becomes a consideration. If a used car is high quality and provides an ownership experience that is in any way comparable to a new car - and that is what we want to do - it is our expectation that we will be a meaningful alternative. There is some evidence that used cars do pretty good (during an economic downturn). If that holds true, we would certainly like to take advantage of that.
Many consumers will not buy used vehicles over the Internet sight unseen. Who is your target market?
Ward: We are premium provider of high quality, pre-owned vehicles. We are not a threat to the existing dealer body. We're not for everybody. We provide vehicles to people who can wait for their product. If you want your vehicle today or tomorrow, your local dealer is your best option. But if you want a high quality vehicle and a trusted, friendly shopping and ownership experience, and a 14- to 21-day wait time is acceptable, that is the iMotors solution.
Who buys your vehicles?
Simms: If you look at the traditional dealer body, the average transaction price is about $13,800 on used cars. Our average transaction price (is) slightly under $20,000. It's a very able buyer we transact with that really has choices and alternatives.
Are sport-utilities still in demand?
Simms: They're great sellers for us. The 3-year-olds are coming off lease. The Jeep products and the Ford Expeditions and Excursions are picking up for us.