The news represents the latest development in the quickly evolving ties between the digital world and car vehicle sales and service.
The paper reported that, in May, the online retailer “added two directors to its 11-member board that were nominated by activist investor Starboard Capital. With the activist firm headed by Jeff Smith in the boardroom, it looks unlikely this assignment is for anything but a sale.”
The takeaway of those personal moves? Cars.com hopes to get $40 per share if it were sold — the company’s stock price on Thursday (May 31) opened at $26.65.
It recently reported a 4 percent year-over-year revenue increase in the first quarter of 2018 to $160 million. The service said it attracts some 19 million unique monthly visitors to its online automotive marketplace.
Potential new owners of Cars.com include “buyout firm Apax Partners and Atlanta-based cable TV company Cox Communications,” along with Hearst, which publishes Popular Mechanics, according to the Post report. It quoted a source as saying a private equity firm, which the paper did not name, was also interested. A buyer for Cars.com reportedly would benefit from the looming expiration of the digital marketplace’s revenue-sharing partnership with Gannett in a “few years,” the Post reported. That would result in more money from auto-dealership advertising staying with Cars.com.
These are busy times for the intersection of digital and automotive, with a variety of players trying to get a piece of the market. Walmart, for instance, said this spring that it was expanding its partnership with digital automotive marketplace CarSaver to sell cars from kiosks at more Walmart locations. A Walmart representative said locations will open in Georgia, Illinois, Indiana and Virginia soon, as well as on a microsite on Walmart.com. The appeal of the program, according to CarSaver, is this: The company uses a network of certified dealers, banks and insurance companies to provide up-front pricing and the highest level of customer service to Walmart customers.
The social media operator said last year that it is expanding the number of cars for sale, which users can view via its marketplace, teaming up with leaders in the auto industry.
Meanwhile, last fall, Germany’s Volkswagen launched its own online platform for used car sales, called heycar. Its purpose is to list high-margin, used cars to target German pre-owned vehicle markets, where 95 percent of online sales are conducted through the platforms mobile.de and autoscout24.de.
Such activity is hardly limited to North American or European firms. SouChe.com, the Chinese car trading website, recently raised $335 million in venture capital funding, led by eCommerce giant Alibaba. The company sells used Chinese cars from dealerships around the country.
“Growth in the China used-vehicle market will mainly be facilitated by growing penetration of online channels in the industry,” reads a recent analysis from Ken Research. “New players are also projected to enter the online space, leading to growth in the overall industry.”
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