Watching with interest: Dealers creating brands to sell used cars

I saw a news release some months ago about a franchised dealership group that created a brand for a digital sales tool it was rolling out for used vehicles.

What interested me was the fact that the retailer, Titus-Will Automotive Group, didn’t use its established brand name to go to market with its new online platform, which it called CarBreezy. Many dealerships still are locally owned mainstays in their communities, with presumably the kind of brand equity that could make consumers comfortable transacting online with a group they trust. So this seemed novel.

It reminded me of a conversation I had with Alex Perdikis, owner of Koons of Silver Spring in Maryland, who did something similar for sourcing used vehicles. The group converted a vehicle subscription platform, called Inride, into a digital used-vehicle acquisition tool last year.

I filed those examples away as something to explore. And then I heard of more.

What I learned after talking to dealership group leaders and automotive marketing professionals is that there are multiple reasons spinning up new standalone brands could make sense.

For one, it can diversify a dealership’s operations, particularly to emphasize used vehicles when the new-vehicle market is in flux. It can allow for geographic expansion, so consumers purchasing online need not be familiar with a dealership group’s local brand. And it can reach consumers who may not have considered a traditional dealership in the past and might gravitate toward non-franchised used-vehicle retailers, such as CarMax or Carvana.

CloudLot, a digital used-vehicle sales platform created by Van Horn Automotive Group in Wisconsin, references Van Horn on its website. That creates brand awareness and a connection to its post-sale service benefits for consumers who do know the group, executives told me. But the CloudLot name also untethers the platform from the Van Horn brand to reach consumers who might not be able to separate it from a dealership.

“We’re not completely dismissing it, but we don’t want to lead with it, because we don’t want to have to try to overcome educating people on what Van Horn Automotive Group is,” said Ryan Thiel, the group’s marketing director. If you have no awareness, we just want to say CloudLot’s a great tool to buy a car online. Period.”