ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, November 3, 1996 TAG: 9611040106
SECTION: BUSINESS PAGE: 6 EDITION: METRO
DATELINE: COCONUT CREEK, FLA.
SOURCE: CATHERINE WILSON ASSOCIATED PRESS
Who you gonna trust? A used- car salesman?
Wayne Huizenga hopes you'll set aside past prejudices and take a look around AutoNation USA, a used-car ``superstore'' concept he wants to take nationwide.
On Wednesday night, Huizenga snipped the ribbon on the first one, introducing shoppers in Coconut Creek, a suburb of Ft. Lauderdale, to a splashy, sprawling, high-tech approach to car buying.
Shoppers use touch-screen computers in a giant showroom to browse electronically the 1,000-car lot by price and model. Each car has a fixed price, no haggling allowed.
A children's play area diverts the youngsters.
Buyers are given a seven-day money-back guarantee, 99-day warranty and free roadside assistance for a year. No cars are older than five years. A service center handles all makes of cars, and a 2,000-item accessory shop offers many options.
Huizenga created brand names in two industries - Blockbuster in video rentals and WMX Technologies Inc. in garbage collection - and now wants to do it again.
There may be something to the idea.
Many shoppers think new cars are too expensive. Average new-car prices hit $21,600 in June, compared with about $11,000 for a used car .
Meanwhile, a flood of expiring car leases is expanding the supply and selection of used cars - 4 million under 5 years old changed hands last year.
To boost his plan, Huizenga recruited Jim Moran, Toyota distributor for the Southeast, as an investor who brings financial muscle. He also bought out Car Choice, a fledgling ``superstore'' chain.
But a stock buyout of ADT Ltd., the nation's second-largest auto auction company, by Huizenga's Republic Industries Inc. fell through last month. Republic Industries will soon become AutoNation's parent.
``It's not going to slow us down one bit,'' Huizenga said of the unsuccessful buyout. ``Life goes on, and we're on to other things.''
Why used cars ?
It's a lucrative market, representing about $370 billion a year in sales. The National Automobile Dealers Association estimates profits on used cars sold at new-car dealerships are three times higher than new ones.
The major suppliers are new-car dealers, rental-car companies and independents, but there are no national chains.
Circuit City pioneered the used-car ``superstore'' idea by launching CarMax in 1993. Huizenga hopes to beat CarMax at store openings to become a recognized name faster.
He wants to open four more stores this year - the locations haven't been announced - and up to 100 stores in five years. Revenue is projected at $10 billion by the year 2000.
Don't think the newcomers are being handed the market.
``They're going to wind up meeting a lot of resistance, not only from the franchise dealers but from the independents,'' said Art Spinella of CNW Marketing Research, a dealer survey group, in Bandon, Ore.
``This is not like having ABC video store getting knocked off by Blockbuster,'' he said. ``In fact, it's probably more akin to Wal-Mart moving into an area that has a Kmart and a Sears.''
Unwilling to see one of their markets gobbled up by outsiders, a group of 11 new-car dealers with $3 billion in sales plans next year to open Driver's Mart Worldwide. About 100 of the used-car stores are on the drawing board.
Chrysler dealerships in the Detroit area promote their used-car lots as ``superstores.''
New-car dealers have a built-in advantage, getting the first pick of leased cars returned by customers. But AutoNation wants to buy a new-car dealership to guarantee a supply of used cars .
Spinella already foresees infighting and consolidation in the used-car industry, but for now he likes what's happening.
LENGTH: Medium: 77 lines ILLUSTRATION: PHOTO: AP. Marty Mailender looks over AutoNation USA's 99-dayby CNBbumper-to-bumper warranty and its 165-point
"reconditioned-to-perform-like-new" process check. color.