AutoGravity began a pilot of its car shopping and financing mobile app and web platform just over a year ago. Since then, it has become available in 49 states and has logged more than 1 million downloads.
The company was co-founded by Andy Hinrichs, former CFO for Daimler Financial Services in Africa and Asia-Pacific, in 2015. About a dozen lenders have integrated with AutoGravity, and with another dozen in the pipeline, AutoGravity could soon reach its maximum, said CEO Hinrichs, 46.
"We will no longer on-board additional [lenders] because we want to make sure there is enough business to go around for everybody on the platform," he said. "When we have 25 to 30 lenders on the platform that all specialize in different products and different credit spectrums, we will be able to meet that need perfectly."
Hinrichs spoke with Staff Reporter Hannah Lutz about AutoGravity's growth, the evolution of digital retail and how he thinks vehicle shopping and financing will continue to evolve.
How did your previous roles prepare you for AutoGravity?
Through various executive roles I had with Mercedes-Benz Financial Services around the world, I always had a knack for the digital dimension. In the U.S. we were the first company with Mercedes-Benz Financial Services to publish an app for our existing customers to manage their accounts and make payments online [in 2009].
When iPads came out, three weeks after they were introduced into the retail network, we already made [them] available in Mercedes-Benz dealerships across the country. [We showed] that there is an efficient use for these mobile devices inside a Mercedes-Benz dealership.
From that point forward I always kind of pushed the envelope as part of the responsibility/authority I had. I made sure that we addressed our existing and prospective customers as well as the dealer body through cutting-edge digital solutions.
Apple introduced the first iPhone in 2007. Two years later Mercedes-Benz Financial Services embraced that new technology and allowed customers to use a much more versatile feature that [shows offers] on a smartphone compared to a website.
In hindsight, if you look now from the perspective of 2017, anybody would ask, "Why wouldn't you make your services available through an iPhone or Android app?" But back then it was really the cutting edge that few people understood.
What sets AutoGravity a part from other auto financial technology companies?
Rather than going the path of least resistance, the true innovation that we bring to the table is we make the indirect lending product available directly to the consumer. And we're doing it in a way that helps the industry get into the digital age. This was, by many industry lenders, thought of as impossible. They said, "Well, you can be a direct lender online; have fun doing that, but indirect won't work." Now we have proven all the naysayers wrong.
Why is it important to have a consumer-facing but indirect platform?
We want to build the best digital customer experience that's out there. At the same time, we want to not fight against the industry participants that are out there today. We want to partner with them. We want to enhance what a dealer does well. The dealer holds the inventory, has the service capacity, knows all there is to know about the product and so forth. At the same time, lenders are very efficient, have huge balance sheets, very attractive cost of funds. This is something where we just didn't want to reinvent the wheel.
However, if you take three steps back and look at the industry as a whole, what is it lacking? It's lacking this digital dimension. Take a look at the lifestyle of the millennial consumer, and increasingly across all generations. It's an instant-gratification thing. People think of something -- it might be to buy a movie ticket, order lunch or buying and financing their next car. Everything happens on the go. All you have to do is pull out your phone and you can satisfy the information need that you have right there.
It's high time, in our minds, to offer an experience for buying and financing a car that is still conducive with the way the industry works today. Lenders, dealers play important roles, and we want to make sure that through servicing indirect financing on our platform, we enhance that rather than undermining them.
Beyond AutoGravity, how has digital auto retail and finance evolved?
The smartphone put everything on its head because with the smartphone you have the internet in your pocket. Everything is available on a moment's notice. Transparency, convenience, speed [are] something the smartphone completely revolutionized. You [also] have the whole generations of millennials, Generation Z. Those people don't remember life without a smartphone in their hand. Their expectations as a consumer are completely different. Increasingly, it's been sweeping across the older generations as well.
How will it continue to evolve?
This is where we have seen digital disruption from other industries, just to name Uber for the transportation industry, Netflix in the entertainment industry. In the automotive industry, the same thing will happen. It's the fastest, most nimble players such as AutoGravity that will carve out a bench for themselves. We do it in a thoughtful way that empowers the ecosystem as it exists with the digital consumer experience, leveraging everybody's strength. That's the bottom line. There's no way around the digital future in the auto industry and now it's just a matter of who can provide the best solution the fastest and who can play nice.