The decision by leading auto sales website Carsales to take a controlling stake in auto finance broker Stratton has sparked a furious war with rival CarsGuide calling it a “negative development for the industry”.
Carsales announced yesterday it was acquiring a 50.1% stake in Stratton for $60.1 million.
Stratton was launched in 1998 as a single person operation and has since grown to be a major online broker of car finance as well as operating in related industries.
Announcing the deal Carsales CEO Greg Roebuck said that online search for cars by repayment capability was growing and so the acquisition was a natural one for the publicly listed company.
However, Lauren Williams, CEO of CarsGuide, jointly owned by News Corp and a coalition of major dealers, warned that the stake raised questions of transparency and neutrality for users.
“We believe that the recent acquisition of Stratton by Carsales is a highly negative development for the industry,” Williams said in a statement.
“The dealer community have already expressed concerns to us about the acquisition and we’re aware that several major dealers in Australia are now reviewing their ongoing relationship with Carsales as a result. We believe that a digital car-marketing site needs to remain neutral and transparent to all its users, as well as 100% focused on the car buying process, including the provision of finance and insurance.”
She went on to say that CarsGuide would not enter into competition with dealers by pursuing any similar acquisition.
“CarsGuide will never become a competitor to dealers by acquiring a finance broker, an insurance broker or a car broker. We are committed to being a partner to our dealers, not their competitor.”
Carsales did not return calls from AdNews.
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