Auto Trader Group PLC (LON:AUTO) has partnered up with Cox Automotive UK to create an online marketplace for wholesale vehicles in the UK.
Cox and Auto Trader will transfer their retailer-to-retailer businesses to the new joint venture, which is to be called Dealer Auction. Cox will hold a 51% stake, with Auto Trader owning the remainder.
READ: Auto Trader reports solid final results but predicts continued decline in car market
Once combined, the online auction service will enable prospective buyers to visit one platform and view a large selection of wholesale vehicles across the marketplace.
This will provide fleet companies, manufacturers and retailers with a more efficient and convenient way to dispose of their stock of vehicles, Auto Trader said.
“The way in which vehicles currently move around the UK automotive ecosystem is overly complex and inefficient, and Auto Trader has the digital and data assets that can make it a quicker, more convenient and cheaper process for all parties,” said Auto Trader chief executive Trevor Mather.
“However, we know that we will have an even better chance of disrupting the market by partnering with an established player which knows this particular industry intimately.”
He added: “I am delighted that we are creating this joint venture alongside Cox Automotive, who we have found to be forward thinking and culturally aligned to our business.
“We believe that together we can fundamentally improve and lead change in this market, for the benefit of both wholesalers and retailers alike.”
The tie-up is expected to be earnings enhancing in the first year, Auto Trader said.
Shares edged 0.8% higher to 447.8p early on Thursday morning.