12:17 pm, November 20, 2020
Auto Trader chief executive Nathan Coe has said the advertising giant will not be selling cars direct to consumers any time soon.
In an exclusive video interview with Car Dealer, Coe explains the listed classified ad giant is moving ever closer to being able to facilitate the whole car buying journey through its site.
However, the firm will be doing that hand-in-hand with its dealer partners and won’t be offering its own cars to its millions of monthly visitors.
In a wide ranging interview, Coe also:
- Explains who Auto Trader’s customers are – dealers or retailers
- Responds to questions from Car Dealer readers
- Reveals the firm’s new part exchange and finance tools
- Talks us through the decision to cut dealer ad bills
- Explains the thought process behind price flags
- And outlines the firm’s plans for 2021
Coe said Auto Trader will not be selling directly to consumers and pledged to help dealers who don’t have an online sales solution to offer that via the site.
‘I think we’re very clear that what we think we can do over the next few years is form a partnership to really transform automotive retail and digitise automotive retailing together,’ he said.
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‘We can do the technology for retailers, particularly those retailers who feel like they won’t be able to do it themselves.
‘We don’t want our customers to feel like they’re going to get left behind.’
Coe said it was ‘foolish to ever rule out’ selling cars to consumers but added: ‘It’s not our strategy and I can’t see it ever being our strategy.
‘I can’t see us getting into retailing cars and competing with our customers – we’re not a retailer.’
Ads for free decision
Coe said the firm made the decision to make advertising free on the site in April and May when dealers explained the number of car sales were plummeting.
‘It was pretty clear that due to the uncertainty present right at that point, consumer interest was going to drop off,’ said Coe on the first lockdown.
‘We took a reasonably simple but principled view that, while our audience did stay strong, for a lot of customers we were a big part of their costs, so we should do the right thing and stop charging them.’
Auto Trader is rapidly increasing its digital offerings to make the purchase easier for consumers online.
A new click and collect and home delivery hub has been added to the homepage to promote those dealers doing exactly that during the second lockdown, while a guaranteed part exchange price tool and finance application tools have been added.
The part exchange price is generated via Manheim and means consumers know what their cars are worth – the dealer then gets the chance to buy it at that price, if all is as it seems when it arrives at the dealer, or it can be sent to auction instead.
Coe says it’s ‘all about getting more cars into our retailers in the most efficient way’ and not Auto Trader looking to become a rival to We Buy Any Car.
Finance props
Earlier this year Auto Trader bought finance firm Auto Convert and the firm’s software will be deployed fully across the site soon. This will mean customers will be fully propped on finance at point of enquiry so dealers can get deals done quicker.
Coe said: ‘Auto Convert takes finance enquiries and through a CRM-like process and having all the plumbing in with lenders, can convert those enquiries into done finance deals.
‘What we want to be able to do is allow someone to check their eligibility for finance without leaving marks on their credit record and then if they want to go forward with it, actually go all the way through to applying for that, delivering a completed finance application on a car into a retailer.’
Coe admits Auto Trader has carried out trials of fully facilitating the sale of cars on its website for dealers, but said the website has not yet ‘solved’ how to do it.
He said: ‘What we need to understand better is how we integrate into dealers’ own systems and processes so that we’re not taking deposits on cars retailers are selling somewhere else.
‘I would like to think we’re able to put cars through that process next financial year.’
Coe explains that he thinks used car demand will continue to be strong into 2021 and suspects dealers are ‘doing more trade than expected’ during the second lockdown. And he says new car demand will depend heavily on the outcome of Brexit negotiations.
On who Auto Trader feels their customers are, Coe says it’s a double-edged sword as without consumers the site would have no demand for dealers, and without dealers it would have no revenue. So it’s a case of both are as important as each other.
The chief executive admits it’s a ‘politician’s answer’, but said the firm has to look at ‘both sides of the marketplace’.
You can watch the full interview at the top of this page.
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