Two huge US dealer groups led by famed entrepreneur Roger Penske have formed an alliance with Internet marketer CarsDirect.com for vehicle sourcing.
The deal calls for Penske's UnitedAuto and Penske Automotive to be the primary source of vehicles for the online broker.
Penske and his business partners acquired an initial 10 percent stake in CarsDirect for $17 million.
UnitedAuto and Penske Automotive Group have combined annual revenue of more than $5 billion. Penske is chairman of both companies.
New York-based UnitedAuto is the third-largest dealer chain in the USA, behind No. 1 AutoNation Inc., based in Florida, and No. 2 Asbury Automotive Group, based in Pennsylvania.
CarsDirect also revealed it bought its first dealership late last year, the Potamkin Auto Center in New York. The purchase was disclosed in a preliminary prospectus that CarsDirect filed last week for a planned initial public offering.
CarsDirect is controversial within the US industry, since it is a middleman between the dealer and the customer.
In fact, franchise laws in some US states do not allow CarsDirect to operate, and dealers in additional states are pushing similar legislation.
In some states, CarsDirect offers leases only, since it is not allowed to sell cars.