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TrueCar reports developments in its automotive digital marketplace, where car buyers use vehicle discovery tools, price ratings and market context to connect with a nationwide network of Certified Dealers for new, used and Certified Pre-Owned vehicles. Company updates center on dealer partnerships, auto-buying programs for affinity and membership brands, platform features that support pricing transparency, and efforts to make the retail vehicle transaction more efficient.
Recurring news also covers TrueCar's operating reset, profitability milestones, product and pricing strategy, AI-driven pricing models, VIN-level pricing intelligence, and changes to initiatives such as TrueCar+, TrueCar Marketing Solutions and TrueCar Wholesale Solutions as the company refocuses on its core dealer-connected marketplace.
ALG, a subsidiary of TrueCar, projects a 4.6% year-over-year increase in average transaction prices (ATP) for May 2020, equating to $1,607, though down 1.7% month-over-month. All brands except Kia saw price increases, attributed to 0% interest rates. ALG estimates U.S. revenue from new vehicle sales at over $39.4 billion for May 2020, reflecting a 29% drop year-over-year. Ford and Hyundai led in ATP gains while Kia's sales suffered from low inventory. The Retail Health Index indicates a recovery for luxury brands amidst easing restrictions.
TrueCar announced a strategic restructuring to enhance its car buying experience, involving a workforce reduction of 219 positions, over 30% of its staff. This decision is a response to the anticipated termination of its partnership with USAA Federal Savings Bank and the impact of COVID-19. The workforce reduction is projected to save approximately $35 million annually. TrueCar has also realigned its organizational structure to form new Consumer and Solutions groups, aimed at improving consumer engagement and simplifying its operations. No changes were made to the company’s financial forecasts for 2020.
ALG, a subsidiary of TrueCar, forecasts May 2020 new vehicle sales at 1,080,075 units, reflecting a 32% decline year-over-year. The estimated seasonally adjusted annualized rate (SAAR) stands at 11.8 million units. Retail deliveries, excluding fleet sales, are projected to be 1,008,916 units, down 21% from last year. Despite the downturn, consumer research indicates 72% of car shoppers have stable or increased vehicle needs amidst the pandemic. The holiday weekend and OEM incentives are expected to support sales recovery.
TrueCar (NASDAQ: TRUE) has announced an extension of financial relief for its dealer customers through June. Dealers will receive a 25% reduction on subscription invoices, following a prior 50% discount for April and May. CEO Mike Darrow noted that while U.S. retail new vehicle sales are projected to decline by 21% and 20% in May and June, respectively, this is better than initial forecasts. Traffic to TrueCar's marketplace has surpassed pre-COVID-19 levels as dealerships return to its platform, indicating a recovery in the automotive sector.
TrueCar reported Q1 2020 revenue of $83.5 million, a decline of 2.4% year-over-year. The net loss was $(10.7) million, improving from $(14.4) million in Q1 2019. However, the company's Non-GAAP net income rose to $4.2 million, or $0.04 per share, compared to a loss last year. Adjusted EBITDA reached $9.5 million with a margin of 11.4% versus 5.9% in the previous year. Cash reserves stand at $182.9 million. The company withdrew its full-year guidance due to the pandemic's impact on the market.
TrueCar has launched the 'TrueCar Military' program, offering exclusive benefits to U.S. military personnel, veterans, and their families. This initiative includes up to $2,000 in automaker military incentives and $4,000 in auto repair and deductible reimbursement. TrueCar will maintain a dedicated U.S.-based Military Customer Service Hotline and expand partnerships with Team RWB and DAV. Over 13 years of service to military communities underscore this new offering, aimed at enhancing vehicle purchase accessibility for those who have served.
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