Chain of used-car dealerships planned Driver's Mart aims to change buying process

February 07, 1996|By NEW YORK TIMES NEWS SERVICE

DETROIT -- A group of the nation's biggest car dealers said yesterday that it plans to open 100 huge used-car dealerships, a move that it hopes will significantly change the way Americans buy used cars.

The chain, to be called Driver's Mart Worldwide Inc., will stock 350 to 650 late-model used cars and trucks at each dealership, offer detailed warranties and set fixed prices with no bargaining permitted, said Thomas Eggleston, the chain's chief executive.

Salespeople will work on salaries, rather than commissions, and the chain hopes that will lessen the incentive to pressure prospective buyers.

The car-buying experience has become so unpleasant for many Americans that an estimated 7 percent of new and used cars are now purchased through buyer services that negotiate deals for a fee.

Circuit City Stores, the consumer-electronics retailer, has already rattled the auto industry by opening several giant used-car dealerships under the name CarMax. These stores have salespeople dressed in polo shirts, and use low-pressure sales tactics developed with considerable success by the Saturn division of General Motors Corp.

Domestic and foreign car manufacturers have quietly encouraged the growth of large used-car stores because these stores make it easier to dispose of roughly 3 million vehicles scheduled to come off leases annually in the next few years.

Some industry analysts have begun to worry that as used cars become close substitutes for new cars, automakers will find it harder and harder to raise prices for their new vehicles without losing customers.

Driver's Mart will be jointly owned by nine car dealers who currently own a total of 118 dealerships with combined revenue of more than $3 billion. Each dealer will open several large used car stores as Driver's Marts.

Driver's Mart will sell cars of all brands and models, domestic and foreign, with an emphasis on late models, Mr. Eggleston said.

Seven of the nine dealers who founded Driver's Mart also own Saturn dealerships, and their experiences with these dealerships have strongly influenced the plans for the new business.

Saturn announced last month that it is starting its own program at used-car dealerships, which calls for a 150-point reconditioning of all used cars before the dealerships resell them.

Driver's Mart plans to expand to 30 dealers, with at least 100 large dealerships in three to five years, said Mr. Eggleston, former chief executive of Amway Asia Pacific Ltd.

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