Public dealership groups grow digital sales, create new online tools

Executives leading the nation's major public dealership groups said last month that those companies continue to advance their digital auto sales, with some selling thousands of vehicles through their own branded platforms and others rolling out new tools to more customers.

Group 1 Automotive Inc. disclosed during a first-quarter earnings call that it sold 5,800 vehicles in the U.S. through its AcceleRide platform from January through March, a tally that made up 9.6 percent of the group's total U.S. retail sales.

Asbury Automotive Group Inc. shared that its Clicklane tool handled more than 5,600 vehicle sales in the first three months of this year — with March being the best month in Clicklane's history.

Lithia Motors Inc.'s Driveway platform handled 3,100 vehicle transactions in March alone, achieving what CEO Bryan DeBoer described as an annual run rate of 37,000 transactions.

Sonic Automotive Inc., meanwhile, introduced an e-commerce platform for its EchoPark used-vehicle-only business during the first quarter, and that platform now covers 80 percent of national consumer traffic to EchoPark's website, Sonic CEO David Smith said on the retailer's earnings call.

"We continue to see positive early results and customer feedback from the new platform, with a 30 percent increase in our website conversion rate and out-of-market buyers representing over 70 percent of our online sales," Smith said.

Penske Automotive Group Inc. executives say the company has embraced multiple digital sales options, with a focus on an omnichannel experience. Omnichannel refers to technology and processes aimed at providing a seamless buying experience for consumers whether they shop online, in-store or both.

For Penske, that focus includes its own Preferred Purchase platform that allows consumers to shop online for new, used and certified pre-owned vehicles at Penske's franchised dealerships, the online buying platform for its used-vehicle-only CarShop stores co-developed with Cox Automotive and the various branded digital retailing tools developed by automakers, including BMW, Mini, Toyota and Lexus.

"Our omnichannel strategy focuses on customer lifestyle and continues to evolve with the changing landscape," CEO Roger Penske said. "We focus on providing flexible buying options that allow customers to proceed at their own pace in buying their next vehicle or servicing their existing one."

AutoNation Inc. didn't specifically discuss digital vehicle sales during its first-quarter earnings call, though CEO Mike Manley said overall customer traffic increased in the quarter, both digitally and at physical stores. He added that AutoNation continues to build a "compelling customer value proposition through the combination of our digital tools and physical assets."

Lithia's DeBoer said Driveway aims to generate $1 billion in incremental revenue this year and that more than 97 percent of the platform's transactions in the first quarter involved customers who had not done business with the group during the previous 15 years.

Lithia has introduced a new-vehicle shopping experience in Driveway, DeBoer told analysts.

"Expanded functionality for new includes the convenience of seeing all applicable incentives and rebates factored into pricing upfront, along with instant online financing approvals," DeBoer said. "These new features have meaningfully improved our conversion rate and increased the volume of new vehicles sold."

Dan Clara, Asbury's senior vice president of operations, said customers who use Clicklane convert at nearly twice the rate of customers who submit traditional Internet leads, though he noted that "we won't see the full potential until inventory levels normalize."

Clicklane buyers generally have higher credit scores — the average tops 700 — compared with traditional customers at physical stores, said Clara. He added that those customers gravitate to Asbury's tool because of its transactional capabilities.

"That consumer does not want to go through the traditional process and go spend three or four hours in a store and are taking full advantage of the technology that we have out there that makes it a lot more efficient to buy and acquire that inventory where they want to, how they want to and at the time of the day that best benefits the guest," Clara said.

At Group 1, first-quarter sales through AcceleRide rose 22 percent compared with the fourth quarter of 2021, said Daryl Kenningham, president of U.S. operations.

Group 1 defines a sale through AcceleRide as a consumer who starts the process on the digital platform and ultimately buys a vehicle, though he or she may leave it at some point, such as for a test drive, Kenningham said. About 60 percent of Group 1's customers used AcceleRide during their purchase in the first quarter, such as to value a trade-in, browse inventory or upload documents, he said.

Group 1 is expanding AcceleRide as it increases its holdings through acquisitions. The platform was integrated at all recently purchased stores, including the Northeast dealerships acquired last year from Prime Automotive Group and two Toyota stores in Texas and New Mexico acquired this year, Pete DeLongchamps, the group's senior vice president of manufacturer relations, financial services and public affairs, told Automotive News.

"There's much more runway for us to grow AcceleRide," DeLongchamps said.