TRUE CAR and ZAG Cyber Bandits, Parasites or Good for the Car Business?

Jim Ziegler asks...

I am hearing a lot of discussion about True Car and ZAG.  I continually scratch my head and wonder if  desperate dealers are doing the marketing limbo "How Low Can You Go?" 

Are we so bad at what we do that we have to line up and pay vendors to lose money? AND, who is giving these people access to your data that is used against you? 

 

Who owns these companies and what might be their ulterior motive?  Sometimes I ask questions to which I already know the answer. 

 

Am I wrong?


What do you think... JIM

 

 

Jim Ziegler's Guidance and Recommended Action Plan:

Ten Areas We Need to Concentrate on to Bring This Monster to It's Knees...

  1. Government investigation of ALL Data Aggregators taking consumer information from dealers' DMS. Sadly enough, dealers who do business with TrueCar are exposed to  liability charges. Cut off all access to unecessary data, no matter who takes it from the dealers DMS and make it illegal to "resell identifiable consumer data" and "transactional data".
  2. Educate Your Fellow Dealers; If anyone takes financial transactional data, they expose the dealer that allowed it to violations, especially if it is passed on to other vendors or shared.
  3. Educate Consumers to what they're doing with their information...
    a. You buy a car from a dealer, do you really want your personal information, and maybe even your financial information, passed along and sold and shared by "God knows who?"
    b. These People Charge the Dealer $300 which the dealers have to build into the deal
    c. Your Privacy and the Security of your Information could theoretically compromise your identity if you do business a company that takes data from the dealership.
  4. Educate Investors and potential investors they could possibly be mislead if anyone is telling them this is a safe investment because of all of the dealers pushing back, associations pushing back, and government regulators in many states coming after TrueCar's business model as NOT compliant, in some cases they're saying it is Not Legal.
  5. AMEX, USAA and all of their affiliates do not want the bad consumer relations this push back is creating with their members and customers.
  6. Cancel your dealership's Affilation with TrueCar. Tell people with TrueCar certificates that YOU don't honor TrueCar and you feel the company is NOT reputable. Educate consumers as to perceived data exposure if they buy from a TrueCar dealer. Make sure that each consumer knows that using TrueCar actually increases their vehicle cost by $300 to $400.
  7. Make the dealers selling at huge losses take all of those deals. Big problem right now is too many Nissan Dealers and others are taking huge losers to get the factory money. The TrueCar reverse-auction business model will continually push those numbers down until the factory money is non-existent. Consumers need to hear from many dealers, "We don't do TrueCar"
  8. Keep calling your National and State Dealer Associations demanding they get involved and stay involved... No excuses.
  9. Get the Manufacturers into the game. If GM, Ford, Toyota, and other majors change the rules about how we advertise and do business to protect the dealers, we can cut off their ability to set pricing. So keep it up at every dealer meeting. Call your Dealer Council Members and protest to your factory reps. Tell the manufacturers, if they want showroom and facility improvements, we need the ability to make fair profits.
  10. Tell everyone you know. Educate other dealers and industry people. Watch the Painter interviews... I believe this is the first time a vendor has publicly announced they intend to bring down the dealers and hijack our business, taking our profits and starving us out with our own data. Painter has said manufacturers and dealers should go bankrupt and he, in his God-like way "will control distribution..."
    When the TrueCar-Yahoo Deal kicks in we need to stand firm and "Just Say No" we don't honor TrueCar deals.

Read this article as a reference: http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN... 

AND, if you doubt the mission... read this...  http://www.zag.com/websiteASSETS/whitepapers/ZAG-WhitePaper3.pdf

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Comment by Larry Muirhead on November 30, 2011 at 12:57pm

@ Arnold Tijerina.

Not really.

Comment by Keith Shetterly on November 30, 2011 at 12:57pm

@ Arnold, here, let me help you http://www.truecar.com/hiring.html.

Comment by Brian Willian on November 30, 2011 at 12:57pm

The problem with the Clearbook if I understand it correctly is that it will be based on ASKING prices vs. actual transaction prices -- the exact opposite of the TC piece.  Is that the way others understand it?  If true, this is problematic on several levels.

@Jose- Then good on ya brother.  With those numbers in the Ocala/Gainesville (aka Hogtown from my UF days. c/o '94) you all are killing it.

Comment by Keith Shetterly on November 30, 2011 at 12:51pm

@ Brian, believe me, I've been on this thread and issue right at the start, and 100% agree with you.  So far, I have seen three dealers come in here on the positive side of Zag.  I think they just don't know all the sides, and maybe one or two of them got a call from their TC rep for help and posted before they thought.  I am just saying that those folks, too, need education so they can think about what they are doing.  And it is just as well that Jose wrote that he would now revisit his Zag situation after he understood about Clearbook.  To me, that is a win.  As I've written here and support, now that TC has a partnership with Yahoo.com to replace Cars.com, has 5,500 dealers (their number), $200 million in capitalization, TV ads running and growing, and they have bought ALG w/continued "data association" with DealerTrack (still has AAX u/c inventory mgt tool info to share!!!  What??!?!?!), AND the CEO has said his agenda is essentially a "dealer-less" buying experience . . . we have ALL got to get those "wins" whenever we can.  Sometimes, it's just ego that makes folks think these are leads . . . because they don't want the truth.  Unfortunately, pretty soon it won't matter, and they'll have to pick a side.

Comment by James Carroll on November 30, 2011 at 12:50pm

@Joe  Great comments!  I think we often forget ourselves how much we contribute.

 

"Must we forget that dealers, managers and employees of dealerships are major contributors to local economies? We are your relatives, neighbors and friends. We are dads, moms, uncles, aunts, brothers and sisters that happen to work in the field selling a product. Most of us are very philanthropic offering our time, money and support to cure diseases, end poverty, provide education against child abuse and cancer research. The money we make from selling a desired product is invested in houses that reside in your neighborhoods. We buy cars; send our children to church pay our taxes, support local schools and athletic programs. We advertise at the play, concert and sponsor events when other local businesses refuse to add additional costs. Our business is the single largest contributor of local tax dollars generating millions in revenues for small towns and big cities."

Comment by Brian Willian on November 30, 2011 at 12:44pm

@ Keith, I like to believe other dealers as well, but my goodness, I've been in the SE market a long time and those seem like huge numbers being credited to what I consider to be a parasite trying to turn a big profit off of the backs of dealers -- essentially reaping the benefits while assuming none of the risk or doing any of the work.  In a nutshell, that's what TC is to me.  I have to question those who defend and/or promote them, particularly when they are touting numbers that seem way out of round.  I am thrilled this issue has the attention of the Alpha Dawg.  Hey Jim, do you consult any stores signed up for ZAG?  Just curious.

Comment by James A. Ziegler on November 30, 2011 at 12:36pm

The Promote Button just puts a message on the homepage for all to see that you promoted this blog...it is only seen by DealerElite members... hit it one time and then go to the Main Page and you'll see your promote message

Comment by Keith Shetterly on November 30, 2011 at 12:36pm

@ Brian . . . I usually give the break to actual dealership personnel until facts are in . . . sometimes we know not what we do . . . however, a vendor was on this thread previously essentially touting that we needed to game up and shut up . . . I don't think that went so well for him . . . hasn't been back . . .

Comment by Joe Clementi on November 30, 2011 at 12:36pm

Transparency is supposed to cure the excess profit that dealerships make on selling a “commodity”. We’re discussing a platform that promises “upfront pricing” as the “new world order” but cautions “its arrival heralds a bona fide tipping point in automotive retailing”. Transparency offers the customers an “upfront pricing” that is “non-negotiable in an environment defined by net margin compression”


Some say, we don’t want transparency suggesting instead that we prefer deceit and magic. Transparency is apparently the answer to solve the age old question of how much profit is too much profit on a car. Having pricing posted below invoice online is supposed to ease our customer’s minds about paying too much profit on a product.

Must we forget that dealers, managers and employees of dealerships are major contributors to local economies? We are your relatives, neighbors and friends. We are dads, moms, uncles, aunts, brothers and sisters that happen to work in the field selling a product. Most of us are very philanthropic offering our time, money and support to cure diseases, end poverty, provide education against child abuse and cancer research. The money we make from selling a desired product is invested in houses that reside in your neighborhoods. We buy cars; send our children to church pay our taxes, support local schools and athletic programs. We advertise at the play, concert and sponsor events when other local businesses refuse to add additional costs. Our business is the single largest contributor of local tax dollars generating millions in revenues for small towns and big cities.


Dealers want the same things that our customers want. We want our customers to be happy, loyal and fair. We want our products to be sold at a fair profit margin that is dictated by supply and demand and not some vendor with a separate agenda. We want to train employees to become successful business leaders and better people.

If dealers refuse to stop the concept of pricing below costs online than perhaps we should consider one-price cost structures whereby margins are a function of supply and demand? Every dealer would then have to sell their unique qualities instead of cannibalizing our profits. It’s a viable option that neutralizes third-party predators and offers the transparency our guests require.

Comment by Mike Betts on November 30, 2011 at 12:34pm

First i love the discussion back and forth some excellent points made and i wil be sure to check back tomorrow.

Second its the last day of the month what are we still doing here ? Lets sell some cars people! :o)

See you tomorrow!

Mike

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