A new CDK Global initiative aims to create a smoother shopping experience by streamlining information for customers through improved connections between manufacturer and dealership software systems.
Dubbed Automotive Commerce Collab, it is designed to work regardless of what dealership management system software dealers use to operate their businesses. The goal is to boost efficiency by improving consumer transparency in payment calculations, inventory status and other areas.
“This is really about creating a seamless customer journey from [manufacturers] to dealers and creating an experience that will rival Tesla, Lucid, Rivian and the other new entrants that have a direct-to-consumer model,” CDK CEO Brian MacDonald told Automotive News shortly after announcing the initiative during Automotive Forum New York on March 26.
He added that the dealership model isn’t going away, so it is imperative to create retail technology tools that help dealers give customers “the same type of experience” as Tesla and the other upstarts do.
Hyundai Motor America is an early partner in the collaboration.
Born out of whiteboarding brainstorming discussions at CDK’s Austin, Texas, headquarters, the Automotive Commerce Collab relies on connective software known as universal application programming interfaces to streamline the car-selling process. Specifically, CDK’s application programming interfaces integrate dealers with manufacturer websites so a sales process produces one set of documents, MacDonald said. By using the application programming interfaces, sales and service, online and in-store consumer processes are expected to work more smoothly from point to point, according to CDK’s website.
Kim Irwin, J.D. Power’s senior vice president for SmartDigital for the auto industry, said that CDK’s Automotive Commerce Collab seems promising.
“This is a great solution,” Irwin said. “Adoption is probably going to be there just because of the major footprint that CDK has.”
Implementation of the technology will be something to watch closely, Irwin added, as dealership employees are trained to work within the new paradigm and customers focus on understanding streamlined processes.
“Those are the pieces that will make the solution really awesome or not as successful,” she said.
David Kain, president of Kain Automotive, which provides Internet and B2B digital marketing, training and consultancy for the auto industry, said the concept “sounds really good theoretically.”
But the devil will be in the details, said Kain, who was previously co-founder of FordDirect, a dealer-manufacturer joint venture that provides websites and leads to Ford and Lincoln dealers. Kain said the challenge remains in “getting disparate systems to actually work together.” He also questioned why CDK, a 50-year dealership management system industry veteran, is releasing this new initiative now.
“This is something they should have seen and could have seen for a really long time,” he said.
Matthew Gillrie, CEO of DMS consulting firm Gillrie Institute, said that the new CDK initiative feels familiar.
“None of the companies have solved this because you’re trying to integrate software that ranges from brand new to 20 years,” he said, adding that CDK and other dealership software companies have all previously pitched solutions with varied results.
“It feels like we keep creating these programs to accomplish the same goal, and I don’t see any progress,” Gillrie said. Among those he cited: CDK’s own Fortellis Automotive Commerce Exchange platform, which launched in 2018 with a company announcement touting “universal connections and protocols” designed to let developers, manufacturers and dealers leverage, build and integrate products and workflows to deliver a “seamless customer experience.”
MacDonald told Automotive News via email that the new system and Fortellis accomplish complementary things.
“Automotive Commerce Collab is about going deeper with the specialized integrations needed to bridge the gap between OEMs and dealers to provide their shared customers with a transparent and trustworthy experience, regardless of the software used at the dealership,” MacDonald said. “Fortellis provides publicly available [application programming interfaces] to the automotive ecosystem and has an App marketplace for independent software vendors (ISVs) to promote their applications.”
MacDonald added that Fortellis processes over 3.6 billion transactions annually and “is a foundational piece of the new Automotive Commerce Collab.”
DMS rivals have also dived into the issue. Cox Automotive, for example, highlighted its Retail360 Deal at the 2024 NADA Show — a platform intended to provide dealership sales staff with customer details and help them tap into the exact stage of a customer’s vehicle-buying process.
CDK claims its software is a system of record for more than 55 percent of the vehicles sold in America, which MacDonald said during his Forum talk makes CDK a logical part of the Automotive Commerce Collab. In one year, he said, the company processed $540 billion of “automotive commerce.”
“If we don’t do this, who will?” MacDonald said.
McDonald said that payment for the service will depend on the unique needs of the dealership customer.
“We’re focused on solving an industry problem [and are] leveraging our technology and have put a lot of effort into this,” MacDonald said. “Assuming it creates value for OEMs and dealers, they’ll pay us for that, and we’ll figure out what’s the right way for them to pay us, whether that’s subscription revenue or some other type of revenue.”
MacDonald said that while CDK has long used [application programming interfaces] for its various platforms and products, the retail automotive industry is catching up on implementing what are efficient ways for computer systems to connect to each other more easily for maximum functionality.
“Our industry is behind, and fundamentally, that’s why we’re here to introduce the Collab and bring it to the industry,” MacDonald said.