The criteria used to rank all the organizations submitting applications remains the same from year to year. Any dealership is eligible whether it is franchised or independent. A “dealership” is defined first by its financial statement, then by its management structure and then by its “rooftop.” If it is run as a stand-alone operation, especially with its own service and parts department, it will be considered separate.
An Internet sale is defined as having originated through a third party Internet lead generator, a dealership’s own Web site, a phone call tracked to an Internet advertisement or a transaction through the use of the Internet, including all online auctions.
All entries are scrutinized, with dealerships being asked to verify information as necessary. As a result, you may notice a significant difference in our rankings among others published annually in our industry. With the inclusion of independents and the elimination or reclassification of applicants during the auditing process of top applicants that were not dealerships (but really dealer “groups”), these rankings truly salute the best of the best.
Every year the Auto Dealer Monthly/AutoDealerDaily.com Internet Achievement Awards has offered increased insight as well as surprises to the Internet retailing efforts of the U.S. auto industry, and 2005 certainly follows step.
With the unparalleled performance of Dave Smith Motors, one might assume there are few other success stories to share. That would be grossly incorrect. For the second consecutive year, Beau Townsend Ford of Vandalia, Ohio claimed second place, this year with 4,628 total units—an increase of 213 units over 2003. Beau Townsend also did it with a balanced split between new and used units. Their 2,204 new units retailed over the Internet was better than all but five other dealers, and the 2,424 pre-owned units were enough to claim the title of 2005 Pre-Owned Internet Retailer of the Year, moving up from the runner-up spot in 2004.
Back in the awards after a one-year absence and moving all the way up to third place was Jim Koons Automotive’s Tyson Toyota, Vienna, Va. Koons did not submit in 2004 after finishing 7th in 2003, but this year tallied 4,522 units, more than double their output from two years ago. With 3,925 new units sold, they easily placed second in new units retailed, increasing their new vehicle count by nearly 2,200 units from two years past.
Moving up two positions from last year’s ranking, Group 1 Automotive’s Bob Howard Auto in Oklahoma City, Okla. placed fourth for 2005, with 4,027 total units retailed over the Internet. Bob Howard’s emphasis was more heavily weighted on pre-owned vehicles, as they racked up a total of 2,255 pre-owned sales. That was also good enough to slot them in the runner-up position in the Top 50 Pre-Owned Retailers’ rankings.
Rounding out the top five of the overall Top 100, also after a one year hiatus was Capitol Ford, Raleigh, N.C., Tim Michael dealer principal. After ranking ninth overall two years ago, Michael increased their total Internet sales by nearly 900 units, totaling 2,918, just 18 units ahead of sixth place.
The most notable move from a dealer ranked within the Top 100 last year was made by Hendrick Honda, Woodbridge, Va. (Hendrick Automotive), Internet Director Matthew Belk. They netted an increase of 493 units to place 49th in 2005, moving up 46 positions.
The best certainly got better this year as the Top 100 totaled 155,620 total units in 2004, a staggering increase of 28,485 units from last year. Those numbers net a 22.4 percent increase and represent not only the largest percentage increase ever in the history of the awards, but also the largest unit increase, as well. To put that into perspective, the 100th finisher this year would have ranked 39th just two years ago!
While the number of used units retailed by the Top 100 this year increased from 43,547 to 47,358 the overwhelming increase came from the sale of new vehicles. More than 20,000 new vehicles were retailed by the Top 100 last year, as they tallied 108,362 in 2004. That means for the first time in three years, a higher percentage of new vehicles were retailed by the Top 100 than in the previous year.
In keeping with the slight shift in favor of new vehicles, this year the independent dealers inside the Top 100 fell from 12 back to nine. Missing are some key independents that were at the top of the list in prior years, but now have purchased franchise dealerships and are trying to climb back up the ranks on that side of the ledger.
Top 50 Pre-Owned Retailers
In an amazing effort, the top independent dealer for 2005 is City Auto Sales, Memphis, Tenn., David Anderson, dealer principal. City Auto Sales (www.CityAuto.com) rang up 2,023 units an increase of an amazing 1,502 units from last year. In the 2004 IDOY competition, City placed 29th in the Pre-Owned Top 50 list, but failed to make the Overall Top 100. This year, they charged past the competition to claim 17th place overall. City’s efforts were also strong enough to climb into the third position in the Pre-Owned Top 50 list. Effective use of both eBay Motors and AutoTrader.com have been the keys to City’s outstanding results.
eBay Motors Trend Continues
The trend in favor of the franchise dealers continued in the Pre-Owned Top 50 list where this year they reclaimed the majority. Last year the balance was 26-24 in favor of the independent dealer, whereas this year just 20 independents ranked in the Pre-Owned Top 50. One of the reasons was apparently that the franchise dealers have also embraced eBay Motors. Last year, we reported that eBay Motors had become the primary tool of the majority of those dealerships in the Pre-Owned Top 50 list. The trend continues this year. This year, 32 dealerships in the Pre-Owned Top 50 are eBay sellers, a trend that has shown no signs of slowing.
Rounding out the Pre-Owned Top 50 behind Beau Townsend, Bob Howard and City Auto were two additional independent dealers. The fourth position found Exquisite Autos of the Palm Beaches, Inc, West Palm Beach, Fla., Michael Barson, dealer principal. In fifth, up five spots from 2004 was Texascarsdirect.com, Dallas, Texas, Peter Bulber dealer principal. Texascarsdirect.com finished with 1,421 units, one more than the sixth place finisher. eBay Motors is also an important tool for them.
One glimpse of hope for those chasing Dave Smith Motors is for the first time in the history of the Internet Achievement Awards they fell out of the top five in the in Pre-Owned Retailer listing. This year they came in 10th with 1,117 units, up 10 units from 2004.
All in all, the 2005 Top 50 Pre-Owned Internet Retailers rang up an increase of 11.3 percent, totaling 42,486 units. The average member of the Top 50 delivered 71 pre-owned units per month.
Top Dealer Groups
To the surprise of none, AutoNation, Inc. once again took home the honors of the Top Dealer Group for 2005. With an estimated 105,000 units, their size allowed them to easily outdistance the field. It is apparent that by using common systems and training programs throughout the organization that their efficiency is improving. For 2005 AutoNation placed 37 of their stores inside the Overall Top 100, as compared to 28 which were ranked in 2004. This is the third straight year that they have made a significant increase inside the Overall Top 100.
Following AutoNation were three additional publicly traded companies. United Auto Group, Inc. placed second with 32,483 units followed by Sonic Automotive, Inc and Group 1 Automotive, Inc, in third and fourth place respectively. United had a total of eight dealerships in the Top 100, Sonic two and Group 1 three. All in all, the “Big 4” publicly held groups took up 50 positions in the Overall Top 100.
The only privately held dealer group in the top five was the Virginia-based Jim Koons Automotive Companies, who placed fifth and 15,875 units (edging Hendrick Automotive for the spot by just eight units).
As part of the award application, each dealer is asked to complete additional data about their Internet efforts. Dealers are asked to supply information about lead generators used, their online auction efforts, web site designers, their use of BDCs and their closing ratios.
Each year dealers eye with great interest the lead providers preferred by the Overall Top 100 and Pre-Owned Top 50. Each company is asked to name the top three lead providers they use on a day-to-day basis. Many use more, but the top three are the only ones included in the results. Each preference is weighted with three, two or one point(s) respectively, and then the results are totaled.
By virtue of their use with the publicly-held dealer groups, in particular AutoNation, Reynolds and Reynolds Web Solutions easily outdistanced all the other Web site providers put together. Fifty-nine of the Top 100 Overall use the Reynolds and Reynolds product. Of the other 41 dealers, BZ Results were used by seven, Dealerskins by six and Izmo Cars by four and Cobalt and eBiz Autos each tied with three. Eight dealer sites in the Top 100 are being done in-house.
The top CRM tool used was once again Compass, the proprietary system used by AutoNation. In the non-AutoNation division, Reynolds and Reynolds CarClient ranked number one with 13 systems in the Top 100, followed by Microsoft Outlook at 11, the combination Buzztrak/Nettrak with eight and AVV/Web Control at six. Nine members of the Overall Top 100 claim they use no CRM tool!
One last question involving tools used concerned the use of Business Development Centers. Of the 83 dealerships responding to that question, slightly over 77 percent stated they were using a BDC as part of the Internet process.
With all of the tools at their disposal, Internet departments had mixed results with their closing ratios. Overall, closing ratios, as reported by the Top 100 Overall, dropped from calendar year 2003 to calendar year 2004. In 2003, the Top 100 reported an overall closing ratio for new vehicle leads of 15.3 percent overall, compared to 10.5 percent in 2004. Used vehicle success was up a tick in 2004 from 2003 rising to 22.9 percent from 22.5 percent.
This year, the award application asked for a differentiation in closing ratios between leads generated through lead providers and those coming in through a dealer’s own Web site. Not surprising, the dealer’s Web sites proved more effective, as dealers reported closing 16.6 percent of those new vehicle leads and 29.9 percent of the pre-owned leads.
Whether new or used, calendar year 2004 was a banner year for dealers retailing via the Internet. It was just five years ago when the 2000 NADA convention had nearly 70 dot-com companies on the exposition floor, promising to change the way that dealerships conducted business. The “sky” didn’t fall, however. For the most part since then, the Internet has become another significant marketing tool for dealers to use to drive consumers to their doors, as well as a tool to help dealers and their staffs to become more efficient.
It also continues to demonstrate how significant the role people still play in the retailing process. In 2005 some of the familiar names that had been highly ranked in the previous two years virtually disappeared. The reason? The people in charge of leading the Internet effort at those dealerships left for greener pastures. Some leading vendors within the industry indicate they are working with different Internet sales managers within the same dealerships every seven to 15 months. As a result, significant profit centers have been severely impacted negatively or positively depending on the personnel.
Certainly the means to the end differ between the best of the best. What is consistent among top dealers is the commitment within the organizations to foster success via the Internet. Ultimately this means more and more often dealerships are being classified two ways—either having a successful Internet department or as having a need to develop one.
Vol 2, Issue 5