A successful four-store pilot of Tekion this year could lead to Asbury Automotive Group Inc. deploying the dealership management system companywide in 2025 and finishing the DMS switch in early 2026, Asbury CEO David Hult said this week.
Asbury uses CDK Global for a dealership management system, with the exception of the Jim Koons Automotive Cos. group it bought in December and left on its Reynolds and Reynolds contract. Hult told Automotive News on Thursday that Asbury’s CDK contract expires this spring but had enough extension options to manage the rollout, while the Reynolds and Reynolds contract ends in 2026.
“From a contingency plan, we think we have enough cushion built in if things go wrong,” Hult said.
And worst case, he said, Asbury would simply renegotiate a new contract with CDK.
First, Asbury plans to pilot Tekion at four unspecified East Coast locations and Asbury’s Atlanta shared service center starting in the third quarter. That pilot will run through the end of the year, and Asbury could begin a companywide installation after that, Hult told an earnings call Thursday.
“If all goes well, the beginning of [2025] we will start to roll out to the rest of the company,” Hult said.
The Jim Koons stores are slated to be the final Asbury locations to adopt Tekion, Hult said on the call.
“We would see them converting sometime in early ’26,” Hult said.
He told Automotive News this last step could be completed by the end of March 2026, while the non-Koons stores would take until the end of 2025.
Hult told the earnings call he thought the pilot would succeed and Asbury would proceed with the Tekion rollout.
“We’re working really well with them and getting a lot done,” he said.
Asbury has been talking with Tekion for more than two years, “working together to overcome obstacles and what both of us would need to do on our end to create the relationship,” Hult said.
Asbury, of Duluth, Ga., ranks No. 5 on Automotive News‘ list of the top 150 dealerships based in the U.S. with retail sales of 151,179 new vehicles in 2022. Jim Koons, of Vienna, Va., ranks No. 23 on the list with retail sales of 26,188 new vehicles in 2022.
Tekion’s Automotive Retail Cloud is a cloud-based DMS that uses artificial intelligence to streamline retail sales and interactions among automakers, retailers and consumers. The platform includes retail, service, parts, accounting, customer relationship management and analytics in a single system.
Tekion ended up being more appealing than other DMS companies, which Hult said lack a cloud configuration.
The legacy programs “unfortunately require a tremendous amount of bolt-on software applications,” Hult said. “So if you’re in our sales or service teams, you have multiple different applications open at the same time.”
It makes for inefficient communication internally and with customers, he said.
By adopting Tekion, Asbury could “take off about 70 to 75 percent of the bolt-ons that we have,” Hult said. He said Asbury wasn’t comfortable sharing an estimate of its potential savings, but “we anticipate a nice tailwind” from lower expenses related to dropping the other software.
Tekion also offers the benefit of having customer information available for access by any Asbury store, giving the example of a consumer who visits two of the company’s Atlanta locations. Under Asbury’s software today, “they can’t see what you did at the prior store,” Hult said.
Switching to Tekion means marketing and productivity efficiencies, Hult said. Asbury also feels “there’s going to be a better guest experience” because employees would be more comfortable with an interaction relying on fewer pieces of software, he said.
During this year’s NADA Show in Las Vegas, Tekion CEO Jay Vijayan said the pilot with Asbury “is a long-term commitment” and not just a test.
“Asbury is a fantastic partner that we are very proud of winning and having a partnership with,” Vijayan told Automotive News.
Hult confirmed Asbury had signed a “lengthy contract” with Tekion, though he said provisions exist for Asbury to pull out of the deal should problems arise.
“We’re anticipating a successful rollout and launch and hopefully a long relationship,” Hult said.
A CDK spokesperson said in early January it believes the company will ultimately remain a DMS provider for Asbury, a company with which it has been a long-term partner.
“They have also recently extended their agreement with CDK so we don’t anticipate changes to our relationship any time soon,” the spokesperson said in an email. “While we certainly respect Asbury’s decision to evaluate the capabilities of other companies, we are confident CDK will continue to deliver the solutions that Asbury, other enterprise clients and the majority of franchise dealerships use to run their business.”
Reynolds and Reynolds President Chris Walsh said in a statement that Asbury is a “great partner of Reynolds across many of our companies and products, which has grown into a healthy relationship we’re excited to build on. Clicklane, for instance, is powered by Gubagoo. We have done tremendous work alongside the Asbury team to build that platform and they are seeing great success with it.
“With the Asbury Automotive Group, as with all of our customers, our goal is to help them succeed,” he said. “We are looking forward to expanding our relationship even further in the coming months and years.”