EAGERS Automotive has embarked on an ambitious plan to amalgamate its online used-car properties, including Carzoos, into the easyauto123 ‘big box’ used-car superstore model it acquired in the merger with Automotive Holdings Group.

Both the online and superstore business will operate under the easyauto123 brand to provide multiple gateways into the used-car stock at easyauto123.

The company’s Carlins auction activity will also be intrinsically-linked into the easyauto123 business.

Eagers Automotive has been experimenting with online sales through its Carzoos website and it has decided that its used-car aspirations will work best if the online activities are blended with a revamped version of the easyauto123 superstore model it inherited from Automotive Holdings Group to become the one business. Searches for Carzoos now land on the easyauto123 website.

Eagers says that it will base that business on the consumer-friendly principles of selling used cars pioneered in the United States 27 years ago by CarMax.

CarMax introduced no-haggle pricing for used cars, a five-day return policy, 125-point check, a wide range of 350 cars in stock (with some stores stocking as many as 1000 cars) plus a Value Max sub-brand for older used cars in good condition for less than $10,000 but with a less stringent check-up.

To support the no-haggle concept, CarMax sales staff get the same commission no matter what price the car sells for.

CarMax, founded in 1993, currently holds two per cent of the US used-car market of 41 million cars, has a turnover of about $20 billion a year and makes $1 billion profit a year before taxes.

Eagers presently sells 100,000 new cars a year and has an initial internal target to sell a new-to-used ratio of 1:1. That would make 100,000 used cars a year. Eagers believes it is better-placed than CarMax was at its start because the opportunity is greater in Australia.

In the US, the used-car market is two-and-a-half times greater than the new-car market but, in Australia, the used-car market is estimated to be at about 3.9 million units a year which is a four-times-greater volume than new-car sales volumes here.

The company says that the sale of 100,000 new cars through its 200 franchise rooftops attracts between three and four people per car touching those Eagers dealerships, all with cars to sell.

This gives the easyauto123 superstores access to a potential pool of 300,000 to 400,000 used cars a year should they figure out how to capture all of those sellers.

Easyauto123 will also source cars from:

• Eagers’ 200 franchised dealerships through trade-ins
• Many of Eagers’ used-car operations attached to franchised dealerships are unprofitable because of high land costs and lack of scale. Easyauto123 will effectively become the used-car operation for those new-car dealerships where it no longer makes sense to tie up expensive property that only inflicts unnecessary cost on the sales of those cars
• Where many dealerships are grouped on one property, easyauto123 will become the used-car operation for those franchised dealerships
• Carlins auctions
• Partnerships with vehicle leasing companies where easyauto123 disposes, through its big-box stores, end-of-lease cars for a fee-for-service . This fills out the stock choice at the stores and makes them more attractive purchasing destinations without Eagers taking the capital cost of the stock on to its balance sheet.

Easyauto123 will offer no-haggle prices, a seven-day money-back guarantee with no questions asked, a ‘lowest-price’ guarantee (a la Bunnings and Officeworks) and opening hours between 10 am and 8 pm (opening at 9 am on Saturday and, where allowed, from 10 am to 4 pm Sundays). It will open on public holidays where allowed.

The company is also now taking on the imported used-car-dominated New Zealand market with the opening of an easyauto123 store in Auckland a few weeks ago. The company converted the former Davis Holden dealership in Manukau into an easyauto123 store in November.

In October, Eagers converted a former Zooper Cars warehouse in Adelaide to easyauto123 and has also, a week ago, relocated the easyauto123 Seven Hills site in Sydney, which opened in April 2017, to its former Holden dealership just up the road at Castle Hill.

This brings the roll-out for easyauto123 to seven.

• Perth – Joondalup – December 2015
• Sydney – Seven Hills – April 2017; now located at Castle Hill – November 2020
• Perth – Canning Vale May 2017
• Melbourne – Brooklyn August 2017
• Brisbane – Hendra February 2018
• Adelaide – Mile End South October 2020
• Auckland – Manukau November 2020

The autoeasy123 website currently lists 1600 used cars for sale.

By John Mellor