DCG launches AI data-mining software for dealership valuations
Artificial intelligence is everywhere these days. Now it’s coming to the auto dealership buy-sell market.
Retail automotive advisory firm Dave Cantin Group has launched an AI-powered data-mining software designed to provide data-driven valuations for U.S. new-car dealerships, regardless of brand, location or direct input from the dealership.
DCG said its proprietary software takes in more than 250 million data points and processes billions of data points to create real-time profiles of the more than 18,000 franchise dealerships nationwide.
The AI-powered software uses that data to establish financial information, performance data and an overall valuation for each franchise dealership. It also includes a tool to compare any subset of dealerships real time, the company said.
“Our proprietary Jump IQ software provides a significant advantage to automotive dealers who work with the Dave Cantin Group,” DCG founder and CEO Dave Cantin said in a news release. “With Jump IQ, Dave Cantin Group owns accurate, reliable real-time data that directly improves our ability to secure successful M&A outcomes for our clients.”
DCG said it began developing the software in late 2022 and has been testing it with industry stakeholders for the past six months. The company will begin widespread use of Jump IQ in its core M&A acquisitions business next month June, with the expectation it will most benefit dealership automotive groups actively seeking to acquire dealerships that are not listed for sale.
“More than half of the deals done in retail automotive are initiated by a buyer looking for a targeted acquisition,” Cantin said. “With Jump IQ, when we sit down with a buy-side client, we can model and pull up information with respect to any dealership on a big screen and strategically identify top targets based on geography, brand, revenue, performance or any number of other criteria.
“When we use that data to engage a target dealership’s principal to gauge interest in a possible divestiture, we’re informed and can engage with the assurance that our buyer’s interest is truly qualified.”
DCG is introducing a fee-for-service advisory model in conjunction with the rollout of Jump IQ that will allow dealership groups to use Jump IQ for strategic platform management.
The company said it will expand its advisory offerings later this year to include a Jump IQ-powered service that will allow it to look at more than 40 dealership key performance indicators and advise clients about the greatest opportunities for optimizing performance for enterprise value.
Data outcomes have been tested against actuals from cooperating dealers, with Jump IQ testing within a 1-9% variance across all key financials and KPIs, DCG said, adding those outcomes will continue to improve as use of Jump IQ increases.