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 Tom Drommond on November 28, 2011 at 11:09am

Preach on, Bobby. Starting to see a common thread. This may be more about process than price. If TrueCar were the only ones putting us in this position, there might be a point in arguing against them.  They aren't, so my question is who's next? Wal-Mart Purchase Program?  If it were, could you cope? If the car business changed at the fundemental level, how long would it take your dealership to adjust? Is your store nimble and open to change, or stuck in the way we've always done it?

 

Well, it has changed at the fundemental level and it's never going back to the way it was.  Now, what are you going to do about it? Curl up in the fetal position and whine about how unfair the world is?  Wake up cupcake.  The world is a cruel place. Other businesses don't care if you fail, customers don't care if you fail, the OEMs don't care if you fail, TrueCar does not care if you fail.  It's your job to find a way not to fail.  Why is this so baffling?  It's the 80/20 principal.  80% of your competitors and customer's don't care what happens to you, the other 20% are glad it's happening to you and not them.

Comment by Michael Deville on November 28, 2011 at 11:08am

Get real, the price is provided by the manufacturer, we let the consumer alter that price, and we pay venders to reduce it more and call it the market place.ha ha, There are no restriction for these companies, publish anything, dealers have to put vin # amount of cars available at a specific price etc... or pay the price. I GUESS EVEN BUSINESS PREPAY FOR THEIR PLOT TOO. There are enough customers to develop a marketing process that you dont have to lose money and pay to lose, are you real.  if you sold every car 500 Back of invoce, after your incentives, will you be in business? I'M SURE ALL KINDS OF BOGUS REASON WILL BE SAID, BACKEND ETC... Take a look at the backend on that type of customer, don't just talk.  Take what is paid, what is earned then dooooo tell.

Comment by Keith Shetterly on November 28, 2011 at 11:06am

@James - read the article.  TrueCar, as you suspect, KNOWS what it is doing:  http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN...

Comment by James Carroll on November 28, 2011 at 11:05am

@ James A. Ziegler  Boy you hit the nail on the head.  I would love to find the genius who thought it would be a great idea to give all the cost data to these guys. In any other industry disclosure of  that type of info would be considered treasonous!  The question we have to ask as an Industry is how do we back track to something that is reasonable. You can't tell me that Edmonds, KBB, TrueCar don't know they are decimating the Industry.  With Zag at least it's the individual dealerships that have control over thier own level of pain, but it appears to be the Limbo none the less.

Comment by Natalie Baublitz on November 28, 2011 at 11:05am

I have been in internet sales now for 4 years and it has gotten more and more difficult just to 'give away' a car. The customers refuse to come in, they do not respond to phone calls and no matter what repoire you try to develop via email, the only response received 9 times out of 10 is "No, I am not coming in and what is your best price!" True Car has nothing to lose by asking dealers to go further and further behind invoice to sell a car. When will the day come that every dealership tells the customer, no discount! MSRP is the price. Why are we the largest industry in the world that cannot make any money? We are millions in debt. The government should step in and stop the nonsense. They would not have had to bail us out if we had the opportunity to sell a new car for what it is actually priced at not to mention what it is worth! When you go to the grocery store you do not barter with them and offer the cashier $75.00 for your $200.00 bill....

Comment by Keith Shetterly on November 28, 2011 at 11:04am

If the article doesn't do it, Jim Ziegler's point on the price not taking into account the trade over-allow should wake some people up.

Comment by Keith Shetterly on November 28, 2011 at 11:02am

@ Joe:  You have it.  Everybody should read that article and then come back to this thread.  Here it is again:  http://www.autonews.com/apps/pbcs.dll/article?AID=%2F20110831%2FFIN...

Comment by Keith Shetterly on November 28, 2011 at 11:00am

@ Bobby - legality isn't the issue.  I've been down this road before; I worked at Compaq computers many, many years ago when they were doing very well (and still existed) and their dealer network was King.  There were no state franchise laws protecting those dealers, and Dell sold directly to consumers w/o dealers . . . and the PC dealers are gone.  I am very, very tired of watching dealers make so many mistakes.  Many of the mistakes are mistakes based on fear of scale:  They feed the very beasts that consume them because they feel they cannot market their cars themselves.  By scope of advertising and/or by $ budget.

We are seeing the beginning of the future Mr. Painter envisions, and that future won't be stopped by dealers individually "dominating" their market advertising.  It may be stopped if dealers band together to stop using these services that leak away their negotiation.

Comment by Joe Clementi on November 28, 2011 at 11:00am

Directly from the Automotive News article that Keith posted-

"As a result, he believes dealerships will move toward fleet-type sales where
buyers just sign paperwork, pick up their keys and go. No high-pressure, highly
compensated salesperson required, he says.

"The car sells itself at that point. It's effectively a commodity," he says.
Painter describes himself as a person who wants "to get on with it." He
dropped out of West Point and the University of California, Berkeley.  

 Really??? Is this what we want?  Cars to be commodity just like the products sold out of WalMart? 

Comment by James A. Ziegler on November 28, 2011 at 10:56am

My greatest concern that makes this different is that they are getting actual lowest price sales figures that the dealer accepted right out of your DMS that you gave them access to.  AND, it really doesn't factor over allowance on the trade etc. Those who say this is the way it's been for years are wrong. This is a new virus with a stated goal to eliminate retail car sales and exterminate YOU. 

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