Groupon Sputters at the Automotive Gate with Buick-GMC-Cadillac Dealer

By Jason Davis | July 18, 2011
Turns out, Groupon might not be the best way to advertise for a new car dealership. Last week, we reported that Groupon, the popular internet voucher company, had teamed with LaFontaine Buick GMC Cadillac in Highland, Michigan, for the billion-dollar company’s first venture into the automotive world. The $199 voucher was good for $500 off the negotiated price of a new Buick, GMC, or Cadillac at the LaFontaine dealership. But according to Automotive News, Groupon has pulled the deal.
Robert Milner, General Sales Manager at LaFontaine, offered 150 Groupon vouchers last week in an effort to boost sales. When the two-day window expired, Groupon extended the voucher’s expiration through Friday. But it wasn’t enough to meet Groupon’s quota. Of the ten sales that LaFontaine needed for the Groupon program to remain valid, four were purchased. Of those, only two were redeemed.
"We did get a lot of chatter," Milner told Automotive News.
Many dealerships observed from the sidelines, waiting to see if Groupon was the next big thing. While car buyers were not convinced, the experiment helped to define the company's boundaries. In our initial report, we were skeptical that $301 in savings was enough to attract serious car buyers who could shop at numerous dealerships. With the voucher, buyers would be locked into purchasing only from LaFontaine, a concern for some who felt the dealership would inflate the negotiated vehicle prices. Additionally, many of Groupon’s small-ticket items are impulse and repeat buys; car buying is rarely such an experience, though Milner is not giving up on the idea. For others, like Dave Zuchowski, Vice President of Sales for Hyundai Motor America, Groupon is an intriguing option. "We have not yet tried anything on the sales side, but I am certainly open to it because of the very targeted and limited-time nature of the offer," Zuchowski told Automotive News in an e-mail. "It can be used for month-end pushes or heavy-up on a particular vehicle." Source: Automotive News