AutoNation's new store names are a sign of the times
The timing was exquisite. On the eve of the National Automobile Dealers Association convention in Orlando, AutoNation Inc. revealed the next evolutionary stage in automotive retailing. Last week, the nation's largest dealership group disclosed that it plans to use the AutoNation brand name on 160 of its 221 dealerships, supplanting the 15 regional names it has used in local markets across the country.
Most industry observers had expected the move for some time -- ever since the late 1990s, when AutoNation first proposed the idea.
AutoNation is careful to say that it is not establishing a national brand because the company doesn't have dealerships in every market and isn't planning to expand its footprint. Instead, the company says, the AutoNation brand will be used on dealerships from coast to coast.
But for all intents and purposes, with the possible exception of being able to use cost-effective national advertising, AutoNation will be a national brand.
None of the other large dealership groups, whether privately or publicly owned, seems in a position to follow suit immediately. But other groups, such as Sonic Automotive Inc., are known to be evaluating similar plans. If AutoNation is able to generate more marketing efficiencies and advertising clout to build a competitive advantage, other groups are sure to try nationwide brands, too.
The AutoNation nationwide brand is the next phase in the evolution of automotive retailing from the days when 40,000 mom-and-pop dealerships dotted city neighborhoods and rural communities, selling and servicing single brands.
There always will be a place in America for well run, individually owned dealerships that take care of their customers as well as the needs of the factories whose products they sell.
But consolidation has been a constant theme in the development of automotive retailing. And in the AutoNation brand name we can see the future.