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Dealers rev up to get on board with Cox Automotive Australia

November 14, 2016 Motoring No Comments Email Email

The proposed joint venture via Cox Automotive Australia, which will see a large number of Australian owned Dealers invest in a joint venture with Cox Automotive, is one of the most significant events to take place in the Australian automotive retail industry.

To enable the joint venture to take place, the existing dealer owners of CarsGuide negotiated to buy out News Corp, which holds a 50% share in One Way Traffic Ltd, the company under which the CarsGuide business is conducted. In order to do so, fundraising for the required $20m commenced through a newly formed entity, DealerMotive Ltd. The $20m was raised in quick fashion, with dealers seeing the clear benefits of being involved in a transformative new venture offering services for every aspect of the automotive ecosystem.

59 Dealer Groups representing probably 600 dealerships around the country are expected to participate in the formation of the joint venture, which is expected to be finalised prior to the end of the year, after going through the necessary shareholder and regulatory approvals.

Combined, the dealer investors who plan to participate in the Cox Automotive Australia joint venture comprise a very considerable share of the national retail automotive industry. The network of dealer investors accounts for just about every new car franchise in the market and many geographic regions in the country. Their combined selling power represents around one third of all new and used vehicle sales made in Australia.

Cox Automotive (Cox Automotive Australia’s parent company) is the world’s largest provider of automotive services and technology to motor dealers and vehicle manufacturers, with operations in 27 countries from which they service more than 90 nations around the globe.

Changing the automotive landscape in Australia

Cox Automotive Australia will have the resources to transform the way Australians buy, sell and own vehicles, through the powerful combination of their ‘house of brands’. With access to world leading solutions and technologies, it aims to revolutionise the way all dealers manage and operate their businesses. The good news is not confined to the new and existing dealer investors however, as the entire automotive sector will benefit from the highly integrated services and solutions the company will offer.

Until now, there has not been a player in this market that can offer integrated services which span the entire life-cycle of a vehicle, from buying, owning and selling, for consumers, dealers, manufacturers, fleet and leasing companies and other automotive sector clients.

A Powerful House of Brands

When the deal closes, Cox Automotive Australia will own and operate CarsGuide, Manheim Auctions and Dealer Solutions. The plans to incorporate Xtime, another Cox Automotive business into the new structure are also under way.

Apart from the existing brands on offer, other powerful Cox Automotive brands could be added to the market moving forward. incadea, a global Dealer Management System technology provider is in discussions to establish operations in Australia, to service vehicle manufacturers and their dealer networks. Autotrader, one of the world’s largest online classifieds website will integrate with CarsGuide and Kelley Blue Book and vAuto are also under review for this market.

David Blackhall, the Chief Executive Officer of the Australian Automotive Dealer Association said, “By investing in this new company dealers have demonstrated their commitment to the benefits that flow from increased competition. The combined resources, infrastructure and technology of Cox Automotive Australia and its parent company offer dealers a new world class choice of service providers across all aspects of their automotive retailing, wholesaling, advertising and servicing needs – and of course, consumers will be the ultimate beneficiaries.”

John Bailey, President of Cox Automotive International said, “Cox Automotive Australia will become partners with our dealer customers, whether they are investors in the company or not. Our DNA is to offer complementary services to dealers and to partner, rather than compete with, our customers.”

“A perfect illustration is the design of our technology. It is designed as open ended architecture so our customers can be free to choose who they integrate with to supply additional services. Most Australian dealers are accustomed to old technology when it comes to Dealer Management Systems, which prevents them from incorporating much need support systems like latest technology CRM modules.

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