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AutoNation has parted ways with Hill, Holliday, Connors, Cosmopulos, Boston, on its $20 million-plus corporate ad account just before embarking on a major new brand-building strategy.

Hill Holliday was to have developed a campaign to break on Super Bowl XXXIV to raise awareness of the new-car dealership network at AutoNation, known primarily for its 41 used-car superstores.

AutoNation executives said Hill Holliday won't be replaced. The upcoming effort instead will be derived from creative produced by the company's 10 districts, which have their own agencies.


AutoNation will use a two-phase strategy for brand-building. First, it will co-brand the 270-plus new-car dealerships with the AutoNation USA moniker. In the second phase, it will jettison individual dealer identities and use only the AutoNation USA name.

"We're going to take the existing dealer brand equity and extend that to AutoNation," said President Mike Maroone.

Ad spending, which will total about $230 million this year, will probably top $300 million in 2000, according to company officials. Mr. Maroone said the company is likely to meet analysts' projections of $18 billion in annual sales this year -- a 33% increase.

"I think you will see continuous growth," he said. "The spending will be commensurate with the growth."

AutoNation, the largest U.S. auto-dealer group, is currently testing brand advertising in south Florida with TV spots from the Ad Team, Miami. The 30-second spots show dealerships with the AutoNation USA logo in their signs and use the tagline "It's about change. It's about time."

Co-branding with dealers will involve creating uniform sales, pricing and service experiences for consumers in all its stores, he said. No-haggle pricing is likely to be a uniform policy.

The company, which is in 28 of the top 50 markets, will roll out the branding effort in its operating area over the next 24 months, Mr. Maroone said. AutoNation stores are most heavily concentrated in the Sun Belt, especially Arizona, California, Florida, Georgia, Nevada and Texas.

AutoNation developed its model in Denver, where it consolidated 17 dealerships from three companies that had separate ad agencies under the John Elway-AutoNation brand. Mr. Elway is the retired Denver Broncos quarterback.

Districts have one agency for creative and one for media buys, Mr. Maroone said. In Denver, that strategy cut per-vehicle ad costs by 40% while sales and market share rose 40% he said.

"We were able to really increase our exposure and increase our brand awareness while reducing our expenditures," Mr. Maroone said. "That's every retailer's dream."

The company wants to own properties in the top 50 markets and eventually all top 100 markets, Mr. Maroone said. Earlier this year, it said it was looking at deals that would increase its annual sales by $10 billion.

"Acquisition is a large part of our business, although we are also working very hard to grow our business internally," he said.


Mark Speece, director of branding-automotive for consultancy FutureBrand, New York, said AutoNation will face difficulty because auto dealers have strong local identities.

"Long term, I think they're going to be in a good position," he said. "Short term they're going to have to deal with people who are used to dealing with a local dealership, who know the service manager and the salesman and like to deal with them."

No-haggle pricing might be a problem, Mr. Speece said. Although it once was a good selling point, consumers who are armed with Internet pricing information are less intimidated by bargaining for a vehicle today, he said.

"It goes contrary to what has happened with the Internet over the past five years, he said.

Mr. Maroone replaced John Costello, who resigned last month after AutoNation decided to shed its auto-rental businesses. Mr. Costello, who said he would pursue Internet ventures, at the time said he viewed the auto-rental businesses

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