AN AutoNation Inc

The chief executive of AutoNation Inc., the nation's largest light-vehicle retailer, is looking to mend fences with online car-buying firm TrueCar Inc. after a messy dispute over access to consumer data caused a high-profile rift last year.

TrueCar, a California firm that clashed with dealers over marketing practices, is now seeking to repair relations amid a wave of legal and financial troubles. TrueCar is enacting a series of reforms, aiming to respond to concerns raised by AutoNation and other dealers.

In an interview Friday, AutoNation Chief Executive Mike Jackson said the dealership chain will pilot TrueCar's new approach in 55 of its stores. "The door is now open for a partnership," Mr. Jackson said.

Regaining AutoNation as a customer is an important step. Losing the Fort Lauderdale. Fla., dealership chain—which sells more than 300,000 new vehicles annually—was a major blow for the publically-traded TrueCar, precipitating a plunge in revenue and stock price.

Shares of TrueCar recently traded at $7.02, well below its all-time high of $24.15 in September 2014, and below its $9 initial public offering price.

Shortly after the break with AutoNation, TrueCar founder and chief executive Scott Painter stepped down. Mr. Painter, who established the company in 2005 and took it public in 2014, had long been a vocal critic of the way traditional auto dealers sell cars. He marketed TrueCar as a more transparent option.

"It was a shock to our system when AutoNation left," said Chip Perry, Mr. Painter's replacement as of last fall. "It sent a strong message that resulted in me being hired."

TrueCar has since dropped its previous demands on AutoNation, which owns and operates 370 new-car franchises nationwide.

The Santa Monica, Calif.-based car-shopping service also has made other changes requested by dealers, including agreeing to share customer email addresses and dropping marketing phrases, such as "Never Overpay," that portray dealers in a negative light.

The move comes amid growing tensions between the nation's auto dealers and car-shopping websites like TrueCar, Edmunds.com and Kelley Blue Book's kbb.com that often charge dealers a fee to steer would-be shoppers to their showrooms.

TrueCar, which has more than 11,000 dealers in its network, uses its website to attract customers by offering them an easy way to compare prices and lock-in savings before stepping into a showroom. TrueCar charges some dealers up to $400 a referral if it leads to a purchase.

Dealers have long bristled at TrueCar's business and marketing practices, though, arguing the service drives a financial wedge between auto retailers and their customers.

Last year, a group of dealers in New York sued TrueCar, alleging the service promotes false advertising and unfair business practices. Jeff Swart, TrueCar's general counsel, said the claims are without merit.

As dealers invest in their own web shopping tools, they are also rethinking their reliance on third-party websites.

AutoNation has invested more than $100 million to overhaul its digital storefront, aiming to make it easier to use and allow buyers to complete nearly all of the purchase transaction online.

Those efforts have helped AutoNation drive more business to its stores through its own website, reducing its reliance on referral traffic. Today, less than 10% of its customers come through third-party websites.

Mr. Jackson expects this shift to continue as the site expands but added that third-party referrals will still play a role going forward.

Write to Christina Rogers at christina.rogers@wsj.com

Corrections & Amplifications: Jeff Swart, TrueCar's general counsel, said the claims are without merit. An earlier version of this article incorrectly stated spelled his last name. (April 29)

(END) Dow Jones Newswires

April 29, 2016 15:05 ET (19:05 GMT)

AutoNation (NYSE:AN)
Historical Stock Chart
From Aug 2024 to Sep 2024

AutoNation (NYSE:AN)
Historical Stock Chart
From Sep 2023 to Sep 2024