TrueCar CEO Scott Painter will leave the company at the end of this year, Automotive News is reporting.
Painter announced he was leaving the company after TrueCar announced it had lost $14.7 million in the second quarter on $65.3 million revenue.
“After a decade of building TrueCar from an idea into a public company, I have come to the conclusion reached by many founders and entrepreneurs in my position: It is time for a change.” Painter said in a statement according to Automotive News.
Painter will remain on the company’s board of directors.
A lawsuit brought forward by a group of 100 auto dealerships are alleging car-buying service TrueCar of “deceptive business practices”, reports Automotive News.
The lawsuit claims TrueCar’s advertising, which proclaims transparency in vehicle transaction prices for customers, does not disclose the $299 and $399 dollar fees that are paid by dealers for new and used car sales brokered by TrueCar.
TrueCar CEO Scott Painter said his company will miss expected earnings for the second quarter, and said the company needed a “wake-up” in his call, Automotive News is reporting.
The news sent shares of TrueCar plummeting more than 35 percent. TrueCar closed Friday down 3.81 down to $6.87 per share.
Painter said a lack of marketing was to blame for the company’s struggles in the second quarter, not the recent highly publicized split with AutoNation.
Automotive News has interesting insight into the tenuous, and now soon-to-end, relationship between TrueCar and car dealer-giant AutoNation.
The report details a May lunch between TrueCar CEO Scott Painter, President John Krafcik and Senior Vice President of Dealer Development Mike Timmons, and AutoNation COO Bill Berman and Chief Marketing Officer Marc Cannon. At the lunch, TrueCar executives reportedly said they would require data from all AutoNation sales — regardless if they were generated by TrueCar — for the two companies to continue doing business.
“Over my dead body,” AutoNation CEO Mike Jackson said later, according to Automotive News.
Details between the AutoNation and TrueCar split are becoming clear, Automotive News is reporting.
After yesterday’s announcement that the web service and nationwide dealership chain were splitting up — in which AutoNation laid most of the blame on unreasonable demands by TrueCar during contract negotiations — the company’s respective CEOs have been getting nasty.
“Our partnership with AutoNation just turned into, in a very real sense, a choice for the consumer,” TrueCar CEO Scott Painter told Automotive News. “It really makes them our competition.”
The nation’s largest auto dealer will stop using TrueCar’s lead generation at the end of this month, Automotive News is reporting.
The split is largely focused on the use of customer information and contract demands. AutoNation CEO Mike Jackson didn’t mince words.
“TrueCar has made some onerous demands in its new contract negotiations with us that are unprecedented in my 45 years in business and are unconscionable and unacceptable. We cannot agree to them,” Jackson told Automotive News.
Car buyers are tired of the dog and pony show that goes along with trying to negotiate for a new car and are quickly turning to car buying services like TrueCar as a way to get transparency into the pricing process.
While places like TrueCar will save you a little money compared to just walking in to a dealer off the street, they won’t get you the absolute best price and will do it at the cost of your privacy. TrueCar makes money by charging dealers $299 to $399 per lead once a customer that was referred from them makes a purchase. They gather data from various automotive data aggregators along with vehicle registration and tax sources and perform analysis on it in order to establish an average price paid.
One of the requirements for affiliated dealers is to give them access to their Dealership Management System (DMS) or to manually transmit vehicle sales data to a supported third-party vendor. A DMS is a management system that dealers use to manage customers and vehicles that contains information such as pricing for vehicles bought and sold along with customer details like names, addresses, and social security numbers.
Just like when high fuel prices knocked down the sale price of many a truck and SUV, the current drop in price at the pump is pulling down the prices for many a hybrid, PHEV and EV.
Keep those Benzes, BMWs and Audis in the garage, son: $50,000-plus trucks and SUVs are where it’s at for the ballers and players these days.
Automotive pricing site TrueCar has revealed its IPO price will be set between $12 and $14, bringing the company a valuation of around $1 billion should the price-per-share lean closer toward the top end.