TripAdvisor internet entrepreneur Langley Steinert claims that his new venture, CarGurus, is aiming to top the online car retail segment, stating “profitability isn’t an issue” as they target Auto Trader and Motors.co.uk.
Steinert, the founder of travel review and bookings site TripAdvisor, sold his former business back in 2004 and has since shot to the top of the US automotive internet retail tree with his new business CarGurus.
Launched in the US in 2007, CarGurus now has 22 million unique monthly users across the Atlantic.
The business has completed its first year of trading in the UK and Steinert said the business has Auto Trader and second-placed Motors.co.uk in its sights following an 11-fold increase in visitors in the past 12 months –from 100,000 to 1.1m – in the past 12 months.
The UK site currently features 200,000 cars from 3,500 dealers, placing CarGurus third in terms of stock, behind Auto Trader and Motors, and they are aiming to grow that number quickly.
Steinert said: “Our focus is on growing a bigger audience. We believe if you can build a big audience and get the most users then the rest will follow.
“Thanks to the fact that we are a private company we don’t have to worry so much about revenue and profitability.
“Over 15 years operating in the US we are the clear market leader and we can really afford to fund our UK push through that and, because we’re not a public company, we don’t have shareholders breathing down our necks.
“Our aim is to bring the principals of transparency that were the hallmarks of TripAdvisor to the UK automotive sector and to become the market leader here, as we are in the US.”
Steinert said that CarGurus would bring “transparency” to the UK car retail market, both for dealers and consumers.
It indicates whether a car is priced above or below a projected market value and also ranks dealers on their customer reviews.
Steinert insisted that the 5,000 retailers CarGurus currently deals with had to see a return on their investment in the site and said that it aimed to “build trust” between retailers and car buyers.
An in-depth piece of research conducted by CarGurus found that just under half (47%) of the UK’s car dealers said the internet has had a wholly positive impact on the used car market.
In addition to this, 59% said that the internet was helping to eliminate rogue dealers and 90 per cent stated that consumers could now compare prices more easily.
Almost two thirds (62%) of dealers agreed that online research gives many consumers false confidence in thinking they are used car experts even though they might not be, however, and a further 45% of dealers interviewed said internet research causes many consumers to be too price focussed (i.e. paying less attention to the details/history of the car).
While dealers may have mixed feelings about the impact of the internet, CarGurus research suggested that they clearly recognise it as a key marketing channel, with an average of average 72% of their consumer marketing budgets spent on digital channels.
Last week market leader Auto Trader published annual financial results which showed it had achieved a turnover of £281.6m during the year to March 27 – up 10% year-on-year.
Online advert visits rose by 7.5% to 243 million (2015: 226 million) with the number of retailer forecourts advertising on the Auto Trader marketplace up 0.5% at 13,514 (2015: 13,452).
Steinert said he was optimistic for CarGurus growth in 2017 and the stability of the used market. He added: “Economic conditions mean it could be tough but, hopefully, people are starting to see the advantage of CarGurus and we’ll be able to help them achieve their targets.”