Penske Automotive Group and dealership technology company Cox Automotive have teamed up on a new online-buying platform for used vehicles that has rolled out initially to Penske’s seven CarShop used-vehicle-only stores in the U.S.
The technology, Esntial Commerce, was co-developed by Penske, the second-largest auto retailer based in the U.S. last year, and Atlanta-based Cox. Penske spokesman Anthony Pordon said the buying platform eventually will expand to the group’s franchised dealerships for used-vehicle sales, though the company did not offer a timeline.
The tool uses artificial intelligence to 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 from the research stage through paperwork and delivery.
Michael Kabcenell, Penske’s vice president of retail strategy, said Penske had used many different vendors for online retail that offered some functions, 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.”
Penske said the tool has been operational for a few months after being developed with Cox for a year and a half. Pordon declined to provide information on specific sales or how many customers have used the platform, but said its use has grown. It’s possible the tool could replace Penske’s Preferred Purchase system, but no decision has been made, Pordon said.
“It 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 Esntial Commerce, customers also can compare four different vehicles, select vehicle protection products, value their trade-in vehicle, get approved for financing, sign paperwork online through e-contracting capabilities and set up delivery at their home 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 dealers could sell profitably online.
“We’re both sharing a real pioneering vision about changing the way in which automotive e-commerce can take place, balancing both profitability as well as a great consumer experience,” said Kelly Mulroney, Cox’s senior vice president of product and engineering. “We mutually agreed that it was important here to ensure that we created a product and partnered on a product that ultimately could scale to serve the whole industry.”
Cox said it will be the sole owner of the Esntial Commerce technology. It will begin to expand to other dealership clients beyond Penske starting this fall, Mulroney said. The white-labeled product will be configurable for other dealerships to launch their own buying platforms that are customized to fit their own branding needs, she said.
The nation’s public auto retailers are deepening their investments in digital retailing after the pandemic sped up both consumers’ and dealerships’ adoption of the technology.
Lithia Motors Inc. has developed Driveway, an omnichannel retail platform that 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 now features an AutoNation Express buying platform and its own equity mining tool. Sonic Automotive Inc. hopes by year’s end to roll out a new omnichannel digital retailing platform.
Penske, of Bloomfield Hills, Mich., ranks No. 2 on Automotive News‘ list of the top 150 dealership groups based in the U.S., retailing 178,437 new vehicles in 2020. But Lithia Motors Inc. — the third-largest group in the country in 2020 — surpassed Penske to become the second-largest retailer going forward with its April acquisition of Suburban Collection in Michigan.
Read More: Auto News