AutoNation Stepping Away From Third-Party Leads

Washington DC April 17, 2014; AutoNation Inc., tired of paying high prices for online leads, plans to de-emphasize third-party lead providers such as TrueCar, AutoTrader.com, and Cars.com, CEO Mike Jackson says. He says he will strengthen AutoNation’s Web site and digital presence to build traffic and sales.

Beginning in late 2012, AutoNation started spending $50 million on new dealership Web sites, tablet computers in the service drive, and a so-called new digital storefront. The vision: To speed transaction time and let customers control their shopping experiences, whether online or in the store.

Between the redesigned storefront and all of AutoNation's branding activities, Jackson said AutoNation will be spending $100 million. According to Automotive News, Jackson’s decision to build a strong digital storefront reflects growing tension between dealers and lead generators. The third parties, exploiting consumers’ desire to shop on the Web, have elbowed their way between dealers and shoppers.

AutoNation won’t drop third parties immediately, though, particularly if they bend on prices. "We're definitely not pulling the plug. You give me more attractive pricing and we’ll do business for a long time", Jackson said in an exclusive interview with Automotive News. "You jack the rates, I have attractive alternatives."