It's hard to launch a new brand name from scratch. So Asbury Automotive Group Inc. is about to attach its regional Coggin brand name to one of its three Q auto used-vehicle stores.
Asbury launched Q auto in mid-2014 to go after used-car sales in a more targeted way. The stores aren't profitable yet, but the venture is on track with expectations. Asbury executives say they're happy with the experiment so far.
That said, "One of the things we've learned is when you just go out there and put up a sign that says Q auto, the consumer, they don't know that from a Harry's used-car lot," Asbury CEO Craig Monaghan told Automotive News. "But in our markets, we have very strong brand names."
So this fall, Asbury appended the Coggin brand name to online advertising for the Q auto store in Jacksonville, Fla. It likely will add the Coggin name as a subbrand to signs and materials at the store soon, Monaghan said. Then, executives will watch what happens. They'll continue to use Q auto only for now at the other two stores, which are in Florida markets where Asbury uses the Courtesy brand name.
"We want to hold them out, to see what kind of reaction we get in the Jacksonville market where we go with the tag line versus the other two stores where we don't," Monaghan said. "We can do different things in different locations and try to get a comparison."
Monaghan isn't giving any projections for when Asbury might expand Q auto. The company is nurturing the concept for now. Last week, Asbury reported a profit overall, but the unprofitable Q auto stores shaved 1 cent per share off the company's earnings. Still, Asbury said that remains in line with expectations.
"Relative to the opportunity that we see there, that's a small price to pay for what we still believe has very, very serious upside potential," Monaghan said. "We'll be sticking with it."