Vehicle-shopping website TrueCar Inc. reported a first-quarter net loss of $6.8 million — an improvement of about $4.9 million from the loss of $11.7 million during the same quarter last year.
The California-based company’s first-quarter report, issued Tuesday, showed increased revenue and vehicle purchases through the TrueCar website.
Year-over-year revenue leaped 22 percent to $75.8 million. Vehicles sold through the website at participating dealerships rose 24 percent to 217,656.
TrueCar said it added 583 dealerships to its count from Dec. 31 to March 31, bringing the total to a record 11,734 dealerships. Independent dealership count also reached a record level of 2,716 for the same period, up 119 dealerships.
TrueCar CEO Chip Perry called the core business “healthy again” in a statement and said the company is expanding its retail strategy.
The website’s next move will focus on its pricing content and verified owner reviews in the research and discovery portion of an online transaction, he said. TrueCar also is designing a “showcase” for automakers to present products ad-free.
“We believe this approach will simplify the car buying process for consumers and enable dealers and manufacturers to spend their marketing dollars more effectively,” Perry said.
TrueCar shares gained 2.8 percent to close the day at $17.80.
Perry replaced company founder Scott Painter as CEO in December 2015. Tension had been building between Painter’s TrueCar and many dealership groups, some even filing lawsuits against the company for not disclosing transaction fees but saying it had low and transparent pricing.
Under Perry, TrueCar took a different approach, such as changing its marketing message to stop criticizing dealerships and removing a page that displayed dealerships’ competing vehicle prices. Perry said he wanted TrueCar’s business model to treat dealerships as its customers while still offering the best consumer experience.
Looking ahead, Perry said TrueCar is readying to launch a pilot for a more transparent vehicle trade-in process with “a large vehicle wholesaler.”
TrueCar expects to sell between 950,000 and 960,000 vehicles through participating dealerships in full-year 2017 and bring in $322 million to $327 million in total revenue.
“All in all, I believe our end-to-end approach will enable TrueCar to build the most comprehensive and accountable marketplace in the automotive industry,” Perry said.
Source: Automotive News