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New launches to keep Auto Trader in top spot

Auto Trader will begin piloting its own internet-based insurance brand, Auto Trader Insurance, before the end of the year as it looks to inflate its revenue take from the growing number of online users.

The initiative is one of a number of pilots and launches the company is planning over the next few months to consolidate its position as the leading provider of automotive services to the trade and to car buyers.

Consumers are carrying out one million insurance visits on the Auto Trader website each month, with half those leading to quotes. Auto Trader currently takes commission, but the imminent launch of its own-branded product will enable it to increase its revenue and own the customer database. The service will go out to tender shortly.

“Our own product will offer features that are relevant to the brand, for instance seven-day drive-away cover and a month’s warranty included in the price,” says Jerry Fowden, chief executive of Auto Trader parent Trader Media Group (TMG).

“It is not our intention to be the cheapest.”

Other insurance products will continue to be offered via the website to maintain Auto Trader’s position of providing impartial choices to customers. “Our comparator service will bring 30-40 offers so customers can choose the best for them,” Fowden adds.

He is also planning to launch a personal loans service. Auto Trader will take a share of commission per sale, but the long-term goal is to follow the path of the insurance operation, with the company owning the database. It could see the launch of another brand, Auto Trader Loans.

“We have been looking at this for the past six months and are now in the process of inviting tenders,” says Fowden.

#AM_ART_SPLIT# The Auto Trader website has been redesigned to include more shortcuts. It will mean fewer page impressions, but more searches because the process is quicker. Last month 68m searches were carried out by six million unique users.

Future services will include route planner and location maps to raise traffic volume and ensure autotrader.co.uk remains the most popular automotive website. It has a 14% share of all automotive-related website traffic (dealers, manufacturers, magazines, breakdown services, etc).

Nearly all business is used cars; Auto Trader has around 20% of the £630m used car advertising market. It recognizes the opportunity on new cars – the advertising market is worth £750m – and will add services such as TV clips and advertising to attract manufacturers.

The Buy a car service launched last year has attracted nearly new cars and LCVs but hasn’t hit the mark with new cars yet.

Auto Trader is also taking on rivals like eBay with the development of a parts and accessories sales facility and a ‘make me an offer’ proposition, currently on trial. ‘Make me an offer’ will allow customers to haggle online with dealers, agreeing a price before visiting the showroom. It will go live within the next six weeks.

“All these innovations have come about as a result of research we did more than a year ago,” says Fowden. “In the past 18 months, the online business has come of age and substance.”

Trader Data Services, the vehicle checking service, went live two weeks ago after a year-long pilot. Mitsubishi is the first manufacturer to sign up and a large retail group has also put pen to paper. Nissan’s Aprite retail business is also using the service as part of a broader contract with TMG.

New services in the pipeline aimed at car buyers include Telesafe, which gives sellers unique phone numbers to allow call tracking and prevent canvassers, and Escro, a safe-fund payment product that will eliminate fraud.

#AM_ART_SPLIT# Auto Trader versus the competition

With rivals like eBay, Yahoo and Parker’s making inroads into the online stock locator/advertiser sector, Auto Trader recognizes the need to continually innovate to maintain its market leading position.

It is about to launch a two-year research programme to assess market performance. Based on qualitative and quantitative data, the research will establish response levels, speed of sale and price (including a comparison against CAP Clean) for Auto Trader and its rivals.

“We have to innovate to offer a superior product,” says Jerry Fowden. He claims that his rivals have not made any impact on the business for one main reason – price.

“At the moment they are very cheap so it does not cost dealers much to try the service. When they increase their price, then dealers will have to make a choice. That’s when there might be an impact.”

But he points out that to justify higher pricing, high traffic and high search volumes are crucial. And it’s here that Auto Trader has the advantage with its 60m+ searches each month, up year-on-year by more than 30%, and 6m unique users.

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