Cliff Banks - The Banks Report

CDK to Introduce DMS with Flex Pricing for Smaller Dealer Groups

March 8, 2018 — CDK Global is launching a flexible pricing dealer management system aimed at dealer groups consisting of one or two stores.

The new DMS, being called DriveFlex, will be built from the ground up on the Amazon Web Services Cloud platform and will come with a new user-interface while providing for a seamless workflow and acess from any web-connected device..

The technology is a significant step up from what CDK offers the smaller dealer today with its Dash DMS. The new system comes with the typical termed contract but with a unique monthly pricing model which will be based on how many vehicles the dealer sells, how many repair orders are written and on the number of licensed users. The pricing will move up or down based on the dealership’s business that month protecting the dealership from downturns in the business.

As groups add more stores, they’ll be able to easily migrate to to the Drive platform. At some point, the DriveFlex technology will be available across all of CDK’s DMS platforms.

Overall, CDK grew its DMS customer base the last two quarters with much of that growth coming with dealer groups with three or more stores. But the segment with one to two store groups has been a challenge.

DriveFlex is designed to help CDK stem its losses in the smaller dealer market which have become more pronounced over the last couple of years. CDK’s management had hoped the acquisition of AutoMate, announced last May would be a quick fix. But that acquisition is still under review by the Federal Trade Commission and has dragged on longer than expected.

The development of DriveFlex began in earnest several months ago when it became clear the FTC investigation would take longer than a couple of months. CDK Chairman and CEO Brian MacDonald hinted at the new system in the company’s most recent earnings call at the end of January, telling analysts CDK was “exploring internal product enhancements” targeted at the smaller dealer segment.

Demos of the new system will be available at the National Automobile Dealers Association convention in Las Vegas March 22 – 24.

 

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