Penske, Cox team on used-car buying tool

Penske Automotive Group is making a play for used-vehicle buyers who want to shop online.

Penske is rolling out a new online-buying platform to its seven CarShop used-vehicle-only stores in the U.S. Penske co-developed the technology platform, called Esntial Commerce, with dealership technology company Cox Automotive, which plans to offer it as a white-label product to dealership groups other than Penske starting this fall.

Eventually, Penske plans to offer the platform to its franchised dealerships for used-vehicle sales, though the company did not offer a timeline. Cox leaders said they intend to add new vehicles to the platform, possibly in 2022.

Penske's investment in digital retailing builds on a deepening commitment to e-commerce among the nation's large public auto retailers. Penske, of Bloomfield Hills, Mich., is No. 2 on Automotive News' list of the top 150 dealership groups based in the U.S. ranked on 2020 new-vehicle sales.

The Esntial Commerce tool is designed with artificial intelligence that can automate and power Penske's CarShop digital platform and can be accessed through a "buy online" header on the CarShop website. The companies say the technology can enable a consumer's vehicle purchase digitally from the research stage through paperwork and delivery.

Michael Kabcenell, Penske's vice president of retail strategy, said Penske had used many vendors for online retail, but this product allows a "full online transaction that included everything all the way from signature to contract."

"There's no other off-the-shelf product in the market that allows for full transaction," he said. "Believe me, I've looked."

The tool has been operational for a few months after being developed with Cox for a year and a half. Penske spokesman Anthony Pordon declined to provide information on specific sales or customer count on the platform but said use has grown. It's possible the tool could replace Preferred Purchase, an existing Penske online sales product, but no decision has been made, Pordon said.

Esntial Commerce "can get real personalized payments on every single vehicle in the inventory instantaneously," Kabcenell said. "So it makes it really easy for customers to consider their budget and the financing aspect of the transaction all the way through their purchase journey, and not at the very end."

Using the tool, customers can compare four vehicles, select vehicle protection products, value a trade-in vehicle, get approved for financing, sign paperwork online using e-contracting capabilities and set up delivery at their homes or a CarShop location.

Marianne Johnson, Cox's chief product officer, said Penske approached Cox about a partnership as Cox was working to build a digital tool that could both improve the customer experience and ensure dealerships could sell profitably online.

"For all the deals that you have, you'll do them with speed, you'll do them at scale and with consistency," said Kelly Mulroney, Cox's senior vice president of product and engineering. "And in that way, we replicate for each deal the very best practices of your best sales team or your best [finance-and-insurance] team over and over again within the automotive experience. And in that way, you lift your overall profitability."

Cox said it solely owns the Esntial Commerce technology. It will be configurable for other dealership groups to launch their own buying platforms customized to fit their own branding needs, Mulroney said.

Other public auto retailers expanded digital retailing efforts as the pandemic sped up both consumers' and dealerships' adoption of the technology.

Lithia Motors Inc. has developed Driveway, an omnichannel retail platform rolled out in 2020. Omnichannel refers to technology and processes that can provide a seamless buying experience for consumers whether they shop online, in-store or both.

Also last year, Asbury Automotive Group Inc. introduced its Clicklane digital sales tool. Group 1 Automotive Inc. debuted its AcceleRide sales platform in 2019. AutoNation Inc., the nation's largest new-vehicle retailer, invested in the mid-2010s in digital capabilities and operates the AutoNation Express buying platform and its own equity mining tool. Sonic Automotive Inc. aims by year's end to roll out a new omnichannel digital retailing platform.

Melissa Burden contributed to this report.