Edmonton, Alberta – Amid the rising popularity of used vehicles, AutoCanada announced its newly formed Used Digital Retail Division has acquired Haldimand Motors, an independent used vehicle dealership located in Cayuga, Ontario, 30 mins south of Hamilton, Ontario.
Operating for more than 35 years, Haldimand Motors is one of Canada’s largest volume used vehicle dealers with facilities of over 7,400 sq. m. (80, 000 sq. ft.) on 20 acres, 130 shop bays, and a full-service department.
Haldimand has been a consistent winner for Hamilton Spectator’s People’s Choice Sward and Hamilton Consumer’s Choice award for used dealerships, and the past winner of AutoTrader’s National Best Used Car Dealer.
The Strategic acquisition of the dealership is part of AutoCanada’s preciously announced Used Digital Retail Initiative and will be part of the newly formed Used Digital Retail Division.
AutoCanada’s Used Digital Retail Division is expected to drive used vehicles sales across all channels, including completely online. This includes the development of a national network of used vehicle dealers through both organic development and acquisition such as Haldimand Motors, as well as an online e-platform.
Paul Anthony, AutoCanada’s Executive Chairman, will continue to have all Canadian and U.S operations reporting to him, with the additional responsibility of overseeing the Used Digital Retail Division. In addition to his AutoCanada compensation, he will receive an incentive representing 15 percent of the value of the Used Digital Retail Division about AutoCanada’s contributed capital (plus a rate of return).
Anthony is uniquely qualified to oversee the project due to his extensive experience, which includes a long family history in the automobile industry and role as Founder, Chairman, and CEO at CARPROOF, a North American software and data company.
Under Paul’s leadership, CARPROOF grew rapidly initially targeting 10 percent of the volume of its larger U.S. competitor CARFAX given the relative size of the Canadian market, ultimately exceeding that scale before CARPROOF’s sale to IHSA Markit in 2015.
Antony sees parallels with the current used retail efforts by others in the intended states and believed the AutoCanada Used Digital Retail Division is well-positioned to evolve similarly.
“The addition of Haldimand’s expansive used vehicle operations supports our Used Digital Retail Initiative – a strategy designed to address the substantial opportunity in the Canadian market with the dedicated sale of used vehicles across all channels, including completely online,” explains Anthony. “
“We’ve been focused on used vehicle sales for some time as part of the Go Forward Plan and our progress there, which has been echoed by the experience of our U.S. peers, has provided validation of both this end market and our ability to execute. This includes our achievement of approximately 1:1 Used to New vehicle sales, which we believe can improve meaningfully beyond that over time. These efforts also provide a natural hedge against new car cyclicality through increased diversification. Our experience so far in 2020 has reinforced the validity of this strategy, where our used business continues to accelerate.”
Anthony explains that this opportunity is providing the company not only with Canadian first-mover advantage in the category and wealth of domain expertise but the ability to build a Used Retail operation with attractive unit economic that should allow people to scale rapidly without meaningful cash burn—a notable difference from some of the U.S. Digital Retail Players.
He added, “Importantly, our Used Digital Retail platform also sets the stage to allow AutoCanada to provide a better and more consistent experience to our customers across channels whether they prefer to buy online or in-store. With consumers frequently transitioning from a used vehicle to a Certified Pre-Owned vehicle and ultimately new, it also allows us to attract consumers to our network earlier in the car buying lifecycle and to serve that customer how he or she needs to be served – including service and repair. In other words, our Used Digital Retail Initiative sets the foundation to serve all customers for all transactions around mobility ownership as transportation evolves, which is important to the future of AutoCanada leadership in the markets we serve.”
