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Sandy Schwartz

COX Automotive has signalled its belief in a strong future in automotive mobility services after this week creating a new business division in the US that could have implications for its Australian operations.

The creation of Mobility Services Group (MSG), which draws expertise from other Cox Automotive divisions, is the culmination of years of investing in technology and services that deliver fleet management solutions and support customer mobility.

MSG will house this collection of investments and solutions in addition to Clutch Technologies, a technology platform specialising in subscription access that was recently bought by Cox.

The 2018 Cox Automotive Evolution of Mobility study, to be released late this month, outlines the signs of how the industry is being transformed and how mobility services are beginning to be more widely embraced by consumers as an alternative to traditional vehicle ownership.

The study shows that since 2015, ride-hailing use has almost doubled and car sharing and vehicle subscription services are gaining traction.

Consumer attitudes about the necessity of vehicle ownership are also gradually changing, with 39 per cent of respondents to the Cox study saying access to mobility is necessary, but owning a vehicle is not. This is a five per cent increase since 2015.

For urban consumers, 57 per cent indicate access to mobility is more important than vehicle ownership – a 13 per cent increase since 2015.

“This means increasingly more consumers are prioritising technology solutions that provide easy mobility over traditional vehicle ownership,” Cox Automotive said in a statement.

“By bringing together its investments and technologies into a new business division, Cox Automotive can more quickly capitalise on the shift from vehicle ownership to usage.”

Cox Automotive president Sandy Schwartz said the company was continually evolving.

“We are delivering digital retailing solutions for the immediate term while developing and investing in solutions that will fuel new models for consumer mobility and enable fleet management solutions well into the future,” he said.

Mr Schwartz said the future of mobility as a service was a massive business opportunity with some estimates putting the size of the market at well in excess of $US1 trillion by 2030.

“Our goal is to grow our presence in that part of the business and help all our partners and clients successfully navigate the many new opportunities,” Mr Schwartz said.

Cox Automotive Australia CEO Rob Whiten said: “We are watching this development with a great deal of interest and we look forward to working with the US to determine the flow- on effect for the Australian operations.”

“We are keen to support the growth of mobility as a service in our local market place and further position Cox Automotive Australia at the forefront of automotive change.”

In addition to investing in automotive subscription businesses, Cox Automotive is delivering fleet services through relationships with car-sharing and ride-hailing companies such as BMW’s ReachNow, Getaround and Lyft.

It has also invested in new mobility and autonomous players including Ridecell, a ride-sharing and car-sharing technology platform; Ouster, a manufacturer of LIDAR sensors for autonomous vehicles; and in consumer car-sharing platform Getaround.

Cox Automotive’s Manheim auction division, which has 78 locations in the US, has already invested $A35 million in its reconditioning operation since 2015. This remarketing company reconditioned 2.9 million vehicles last year.

In addition, RMS Automotive has helped sell more than 1.4 million vehicles globally through digital private stores for OEMs and other large vehicle portfolio owners including fleets.

Now the addition of Clutch Technologies means subscription access is now available in 26 states across the US through Clutch’s partners including BMW, Mercedes-Benz and Porsche, and about 30 dealer groups. Clutch was one of the first to offer the ease and accessibility of vehicle subscriptions in 2014.

Cox Automotive now has 34,000-plus team members and a family of brands, including Autotrader, Clutch, Dealer.com, Dealertrack, Kelley Blue Book, Manheim, NextGear Capital, VinSolutions, vAuto and Xtime. It has 40,000 automotive dealer clients across five continents.

By Neil Dowling

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