Group 1 Automotive Rolls Out Unique E-Commerce Marketing Program
18 April 2000
Group 1 Automotive Rolls Out Unique E-Commerce Marketing Program Featuring One-Stop Internet Shopping
Will Leverage Strong Regional Platform Dealership Network to Drive Incremental
Sales, Establish Competitive Advantage
HOUSTON, April 18 Group 1 Automotive (NYSE: GPI), a
leading operator in the automotive retailing industry, today announced the
rollout of its second-generation Internet marketing program that leverages
both the company's national presence and its strong regional platform
dealership network. By using a combination of brick-and-mortar and web-based
retailing, Group 1 seeks to generate incremental sales by driving potential
buyers through the Internet to one of its regional dealership's websites and,
in some cases, into the local dealership to make the purchase in person.
An Internet user can log onto the Group 1 home page and link to all of its
regional dealership platforms, which are comprised of multiple automobile
brands, providing Internet users with one-stop shopping in their local
markets. Each regional platform then links to the individual dealerships in
that platform. Because Group 1 leverages its strong regional brands,
platforms can capitalize on the long-established name recognition and customer
loyalty developed in their local markets by driving traffic to the platform
URLs. In addition, only franchised dealerships receive sales opportunities
from manufacturers' websites, and Group 1's dealers benefit from this
arrangement.
"One of the problems with pure e-tailing is that the cost per sale can
quickly negate the middleman's commission," said B.B. Hollingsworth Jr., Group
1's chairman, president and chief executive officer. "Internet-only retailers
have to spend significant advertising dollars to attract a customer. Then, if
that customer becomes a buyer, the e-tailer has to find the exact vehicle and
purchase the vehicle from a franchised dealership, like Group 1. With our
e-commerce model, we start with an established brand name and we control the
virtual part of the transaction as well as the brick-and-mortar dealership,
which has experienced people, full-service support, existing customers and
available inventory. The result is low customer-acquisition cost and high
customer satisfaction."
Hollingsworth continued, "The Internet is a powerful sales and advertising
tool with an extensive reach. It seems almost tailor-made for our regional
platform dealership strategy. Industry research estimates that over half of
this years' retail car buyers will use the Internet, with most using it to
conduct their research, and then going to a local dealer to buy the vehicle.
Buyers are looking for selection, a non-confrontational sales experience and
quality service in addition to reasonable pricing. We can meet all of those
needs."
Group 1's Internet portals go beyond selling new and used vehicles.
According to Hollingsworth, while vehicles are big-ticket items that maximize
revenues, they are the lowest-margin activities for an automotive retailer.
To leverage the power of the Internet to maximize profitable activities,
Group 1 has designed its sites to encompass higher-margin products and
services. Portals allow customers to schedule service appointments, receive
service reminders and order parts. "Our sites are designed to facilitate more
efficient interface with our customers," Hollingsworth said.
"There are other areas where we have significant advantages over the
virtual automotive retailer," Hollingsworth continued. "We have direct access
to new and used vehicle inventories, which gives us the lowest cost of
inventory possible. About 60 percent of car buyers want to trade in their old
vehicles and we have the best system to deal with trade-ins. We have access
to all of our manufacturers' retail finance programs and to finance companies
that handle sub-prime customers, who account for over 30 percent of car
buyers. Because we can meet all of the customer's needs, we believe our
Internet strategy is the right model and offers us significant opportunities
to profitably grow all aspects of our business."
Group 1 also announced that it is implementing a company-wide
Internet-based communication system. The system will improve communication
between employees and encourage associates to become more comfortable with
technology.
"I am thrilled that our employees are embracing the new technology,"
Hollingsworth said.
Group 1 is a leading operator in the highly fragmented $600 billion
automotive retailing industry. Group 1 has an annualized revenue run rate of
over $3.4 billion, and owns 98 dealership franchises comprised of 29 different
brands, and 19 collision service centers located in Texas, Oklahoma, Florida,
New Mexico, Colorado, Georgia, Louisiana and Massachusetts. Through its
dealerships and Internet sites, the company sells new and used cars and light
trucks, provides maintenance and repair services, sells replacement parts and
arranges related financing, vehicle service and insurance contracts.
This press release contains certain forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934,
which are subject to known and unknown risks, uncertainties or other factors
not under Group 1's control that may cause the actual results, performance or
achievements of Group 1 to be materially different from the results,
performance or other expectations implied by these forward-looking statements.
Some of these risks, uncertainties and other factors include those disclosed
in Group 1's filings with the Securities and Exchange Commission.
For additional information regarding Group 1 Automotive free of charge via
fax, dial 1-800-PRO-INFO and use the company's stock symbol, "GPI."
Group 1 Automotive, Inc. can be reached on the Internet at
http://www.group1auto.com .