An Intertview With Scott Painter, CEO of TrueCar

Yesterday I conducted an interview with Scott Painter, CEO of TrueCar. I asked him some tough questions and he candidly provided the answers. Answers that I didn't always agree with, but he did answer my questions. I commend Scott Painter for reaching out to people like myself and Jim Ziegler.

There is no doubt that Mr. Painter is very passionate about his business. He believes in what he is doing and he's defending his vision, and I can't fault the man for attempting to defend his company. I would do the same if it were Phone Ninjas being attacked in the court of public opinion.

Since I took on the role of interviewer, I feel it's only fair that I allow you all to digest and analyze the conversation between Scot and I. You'll see that Scott and I often agree that we disagree with one another on many of the issues at hand. The interview lasted over an hour and it could have continued on for another hour. Unfortunately we did not take a deep dive on the data issue, but it was briefly discussed.

Here is the first 58 minutes: http://www.callmeasurement.com/review_x.cfm?cid=349325072&lid=3...

The call got cutoff and I called back: http://www.callmeasurement.com/review_x.cfm?cid=349326841&lid=3...

At the end of the day I can tell you that I do not like what TrueCar represents or what it could potentially do to the automotive industry. As far as Scott Painter, I respect him as an adversary. The man has a plan and he's executed on that plan. You can't fault the man for following his dream. The question is, "will the manufacturers and dealers follow that dream as well?"

Myself, I see one of two things happening. The TrueCar revenue stream evaporates and they disappear (less unlikely), or Truecar gains momentum and they become a dominant player in our industry. At that point, manufactures and dealers might as well adopt once price shopping and eliminate the middleman. So either way, I do believe TrueCar will have a lifespan that much resembles their own bell curve.

With a busy travel schedule between now and the end of the year, I may not be as active on the forums as I would like, but know that I still support our cause. "Kill the Beast!"

Now a quick advertisement from your sponsor:

I will be in Colorado next week teaching the ways of the Phone Ninja! Hope to see you there: Phone Ninja Training

I'll also be joining the Alpha Dawg for Internet Battle Plan VIII in January. This is going to be a must attend event. See details here: Internet Battle Plan VIII

6 members like this

Comment

You need to be a member of DealerELITE.net to add comments!

Join DealerELITE.net

Comment by James A. Ziegler on January 2, 2012 at 5:44pm: This is an email from man who is a second generation dealer and a great friend of mine for 20 years... If TrueCar gets their way, this is the fate most dealers will suffer, at least that's my perception of probability.

Name Withheld:

A Virginia Dealer Principal writes...

This hurts my pride to say, but I'd like to tell you bluntly. Feel free to send to all your dealer friends.

For 10 years in a row, my Buick-GMC store has been GREAT. Top CSI, decent grosses, great reputation. Many of my managers and staff have been here 10 years. We always did business honestly, hence our repeat business is very high, and carried us thru the dark days of 2008 and 2009.

My staff was happy. Not wealthy, but making a good living. Ordering "Outback" for dinner at night, paying their rents and living expenses....it was a pleasure to come to work.

2 years ago we signed up for TrueCar and initially, we LOVED the few extra deals. TrueCar also became the "gatekeeper" for USAA customers so in my heavy military-area, we needed access to those customers.

Today, WE ARE ON OUR KNEES. It's New Year's Eve right now and usually, we high-five each other, exchange hugs, and pats on the back on a good year. But tonite, we're dejected. Our grosses were KILLED via True-Car. We've TOTALLY stopped selling value and service. Most of my best salesmen have had to take pay advances from me just to provide Christmas for their families.

We were a prosperous business, and due to TrueCar, we are DESTROYED now and have to rebuild.

Comment by Elise Kephart on December 18, 2011 at 5:55am: Thank you for posting.

Comment by James A. Ziegler on December 16, 2011 at 3:14pm: Okay Honda has taken a courageous stand and banned TrueCar pricing with it's dealers. I know for a fact VW is strongly considering doing the same. I hope VW realizes that they've just began to get some incredible momentum in the market AND now is NOT the time to allow an invader like truecar to devalue the brand in the public's eyes. No matter what you sell, TrueCar cheapens your brand.

Group 1 made sure their dealers cancelled after looking at the exposure of having these people rooting around in their DMS, especially with AutoNation's CEO on the board of Truecar...

Group 1 was smart enough to see the writing on the wall and run as from away from these people as possible. When is Asbury, Penske, Sonic and others going to awaken and realize they people appear to be a huge threat? Even large private groups like Rick Hendrick should be looking at the evident danger we're all perceiving here.

Where are Ford, General Motors and especially...where is Toyota in this escalating skirmish? I am embarrassed that mark Reuss, president of general motors would actually go to TrueCar Headquarters and play with Painter showing him a 750HP Camaro.

I did not mention Nissan because their dealers are using Truecar to sell way below invoice so they can collect stair step money. You guys are smiling now BUT if Nissan takes away the program, you're screwed royally because of the benchmarks you set with TrueCar making your brand image "Ultra Cheap Nissan"

Does Mark Reuss NOT understand that his dealers are being raided by these people cheapening the product down to unprofitable and below? I find it hard to believe that Reuss would publicly suck up to these people if he truly understood.

There are a few investigations of TrueCar popping up here and there AND we're still urging dealers to put more emphasis with your dealer associations to get off of the sidelines and represent us... I know a couple of associations are doing their best while others limped off of the battlefield without firing a shot... weak.

I am especially disturbed about Toyota staying quiet while Honda takes a stand. It's like sending a message that Toyota has less value.

This thing will gather increasing momentum and I predict TrueCar will find some high-profile weak suck who will sellout their integrity for the publicity or hard cash and take a stand publicly backing them and betraying dealers.

Of course, this is all a lot of conjecture, speculation, supposition and opinion...I might be wrong. :)

Comment by William Finsilver on December 15, 2011 at 11:31am: Besides the dealer body abandoning in droves and denying the data needed for True Car's "Plan", True Car is naive to all the states myriad of dealer protection laws and I predict that will be the ulimate undoing of True Car's "Plan" no matter how passionate Mr. Painter is about True Car's future. The part of the True Cars "bell curve", the one that is just over the horizon, will look much more like a cliff than a gentle slope. Get ready to short the stock, if it even gets that far.

Comment by James A. Ziegler on December 15, 2011 at 11:31am: Painter is suddenly everywhere defending TrueCar BUT like your pappy always said... "Cockroaches always run when you shine a light on them"

Comment by Sue Brief on December 15, 2011 at 11:11am: While I wish no one "failure", I truly believe that True Car's success will be short lived. It is simple, to my mind, this company exists to enable dealers to further cannibalize one another. Back a few years ago, when ZAG came out in test markets, their rep sat with me and gave me their pitch. He encouraged me to list cars an average of $1000 under dead invoice so my store could remain "competitive". It made no sense to me, to pay a vendor to lose money. We did sign up but excluded our SRT-8 models across the line. I got "alerts" every day that I was priced too high. My response? When all my competitors sold out of their limited stock of these models, I would be happy to take the overflow. The rep had all he could do not to laugh at me. Well, 2 months passed and sure enough, no one had a Challenger SRT-8 available within 150 miles, except us. First deal? $6200 profit. Other dealers lost an average of $1000 plus the $299 fee. We delivered that car and others and then dropped out of the program. In my humble opinion, people do care about what they spend but when it comes to a purchase as large as a vehicle, most people still care about having a relationship with a dealer. It has held true in my 25 years in the business and is still true today, people buy from sales people they like and trust and building value knocks out perception of price. Most will pay more to be comfortable with the transaction. As Jim says, we shall see

Comment by Joseph A. DiGiore, III on December 15, 2011 at 10:39am: Great Job Jerry,

I believe once the dealers digest the full impact of TrueCar they will retreat, as they should.

Please let me know if I can assist you in any way. Happy Holidays one and all.

Joseph A. DiGiore, III

Dealer Wizard

Comment by James A. Ziegler on December 15, 2011 at 9:04am: Group 1 booting TrueCar, This is only the beginning, I predict in the next few days we will see several of A-Tier manufacturers, import and domestic, following the VW example and booting TrueCar ... next watch and see the relationship with USAA and AMEX deteriorate as consumer complaints stack up with the better business bureaus and government regulators possibly taking a deep look. Look for investors to run for cover as this deal turns sour. Just my opinion of course, I might be wrong...Let's see.

Comment by Jerry Thibeau on December 14, 2011 at 10:59pm: A knife has been thrust into the beast! Breaking News!

Comment by Brad Hampton on December 14, 2011 at 12:43pm: Thanks for the hard work Jerry. This whole TrueCar debacle has prompted our group to audit our DMS access list extensively. Goodbye Dealix Sales Data Collection.