Wal-Mart is going after one of Costco's most lucrative businesses

Walmart is going after one of Costco's most lucrative businesses: car sales.

The retailer is diving into the car business through a partnership with CarSaver, a website that lets customers shop for, finance, and insure vehicles, Automotive News reports.

Under the partnership, CarSaver will open kiosks and information centers at Walmart stores where customers can shop for vehicles and make appointments at nearby car dealerships. If the appointments lead to a sale, CarSaver earns $350 from the transaction.

To start, CarSaver is opening kiosks in 25 Walmart stores in Houston, Dallas, Phoenix, and Oklahoma City on April 1.

CarSaver CEO Sean Wolfington told Automotive News that he based the Walmart program off of Costco's wildly popular car-buying service.

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Wal-Mart stores through the years

Sam Walton's original store, Walton's Five and Dime, in Bentonville, Arkansas. 

(Photo by user Bobak via WikipediaCC BY-SA 2.5)

Family shopping at a Wal-Mart store. (Photo by Ralf-Finn Hestoft/Corbis via Getty Images)
MILFORD - JUNE 1: Shoppers checking out in a Walmart store on June 1, 1996 in Milford, PA. (Photo by Waring Abbott/Getty Images)
Daniel Deloria shops at Walmart in Oxnard with his family. A new ordinance proposed by Supervisor John Flynn would limit the number of food items at Walmart and Costco in Oxnard.. (Photo by Carlos Chavez/Los Angeles Times via Getty Images)
(Original Caption) Asda and Wal-Mart open their first 24 hour super store in Bristol.This follows one year after the US giant Wal-Mart's 6.7 billion pound takeover of Asda.The revamped US style store is 60% cheaper. (Photo by Alex Smailes/Sygma via Getty Images)
389833 01: (FILE PHOTO) This file photo dated May 25, 2001 shows customers entering and exiting a Wal-Mart store in Quincy, MA. Six women filed a lawsuit against the retail giant June 20, 2001, claiming that the employer routintely discriminates against its female workers. They are seeking class-action status on behalf of Wal-Mart''s 700,000 current and former female employees, which, if granted, would be the largest discrimination case of its kind in US history. (Photo by Darren McCollester/Getty Images)
Exterior of Walton's five and dime, a Walmart museum and tourist attraction site of Walton's first store near Walmart headquarters in Bentonville, Arkansas. (Photo by Brian Vander Brug/Los Angeles Times via Getty Images)
ROLLING MEADOWS, IL - JULY 26: A man leaves a Wal-Mart store July 28, 2003 in Rolling Meadows, Illinois. Wal-Mart said that sales in the month of July at its U.S. stores that were open at least one year could top expectations. Warm weather has helped turnaround slower retail sales following the cooler weather of May and June. (Photo by Tim Boyle/Getty Images)
Wal * Mart Supercenter Store front entrance and parking lot in Southeast USA (Photo by Visions of America/UIG via Getty Images)
Fairfax, UNITED STATES: (FILES) This 28 November, 2003, file image shows shoppers leaving the Wal-Mart store in Fairfax, Virgina. Wall Street shares traded higher Monday, with sentiment lifted by some merger and acquisition announcements and robust monthly sales from retail giant Wal-Mart. AFP PHOTO/FILES/Paul J. RICHARDS (Photo credit should read PAUL J. RICHARDS/AFP/Getty Images)
ST. CHARLES, IL - JUNE 23: A female Wal-Mart employee walks through a parking lot as she returns to work at a Wal-Mart store June 23, 2004 in St. Charles, Illinois. A federal judge has ruled that Wal-Mart may be sued for sex-discrimination, the suit will be the largest class-action civil rights case in U.S. history. (Photo by Tim Boyle/Getty Images)
CHINA - NOVEMBER 02: A cyclist passes by customers Tuesday November 2, 2004 outside a Wal-Mart Supercenter in Shenzhen, China. Wal-Mart Stores Inc., the world's largest retailer, said it plans to open as many as 15 new stores in China next year, expanding in the world's fastest-growing economy as the government lifts curbs on foreign store operators. (Photo by Dennis Owen/Bloomberg via Getty Images)
TRINIDAD, CO - MAY 15: Mountains loom over a Wal-Mart store May 15, 2005 in Trindidad, Colorado. Wal-Marts are now nearly ubiquitous on the American landscape, with over 3,000 stores coast-to-coast. With growth, Wal-Mart continues to weather criticism of low wages, anti-union policies as well as accusations that it has homogenized America's retail economy and driven traditional stores and shops out of business. (Photo by Chris Hondros/Getty Images)
MIAMI - NOVEMBER 25: People stand in front of a Walmart store before the doors open at 5am on the day known as 'Black Friday' November 25, 2005 in Miami, Florida. The day after Thanksgiving traditionally kicks off the Christmas shopping season in the U.S. (Photo by Carlo Allegri/Getty Images)
CHICAGO - SEPTEMBER 21: Wal-Mart employee Anna Hines walks through the parking lot of the soon-to-opened Wal-Mart September 21, 2006 in Chicago, Illinois. The controversial new Wal-Mart, Chicago's first, is set to open September 27, 2006 in the wake of a defeated Chicago wage law that would have set minimum 'living wage' requirements for big box stores. (Photo by Tim Boyle/Getty Images)
UNITED STATES - MAY 08: Shoppers leave a Wal-Mart store in Trevose, Pennsylvania, U.S., on Thursday, May 8, 2008. Wal-Mart Stores Inc., the world's largest retailer, posted first-quarter profit that rose more than analysts estimated after it cut prices on groceries and pharmacy items to lure consumers strained by higher food expenses and $3.70-a-gallon gasoline. (Photo by Mike Mergen/Bloomberg via Getty Images)
UNITED STATES - NOVEMBER 28: Shoppers crowd a Wal-Mart store in Oakland, California, U.S., on Friday, Nov. 28, 2008. U.S. retailers opened their doors at midnight and discounted merchandise as much as 70 percent on the day after Thanksgiving to entice customers during what may be the worst holiday shopping season in six years. (Photo by Chip Chipman/Bloomberg via Getty Images)
CHINA - JULY 16: The Wal-Mart Stores Inc. logo is seen outside a store in Beijing, China on Thursday, July 16, 2009. Wal-Mart announced today that it will sponsor the USA National Pavilion at the Shanghai World Expo in 2010. (Photo by Adam Dean/Bloomberg via Getty Images)
ROLLING MEADOWS, IL - JANUARY 12: A Sam's Club store sits next to a Walmart store January 12, 2010 in Rolling Meadows, Illinois. Wal-Mart Stores Inc., the parent company of Sam's Club, announced that it will cut approximately 10 percent of its 110,000 Sam's Club workforce as it tries to revive the big box retailer's sagging sales. (Photo by Scott Olson/Getty Images)
A Wal-Mart Stores Inc. store stands in Princeton, Illinois, U.S., on Wednesday, March 16, 2011. More than 100 Wal-Mart Stores Inc. workers paint a similar picture in sworn complaints about the company: Local managers made sexist decisions about promotions and pay, and top officials did nothing to stop them. The U.S. Supreme Court is poised to consider whether those allegations warrant a class-action suit of unprecedented size. Photographer: Daniel Acker/Bloomberg via Getty Images
The exterior of a Walmart Express store as seen in Chicago, July 26, 2011. (Photo by John Gress/Corbis via Getty Images)
CHICAGO, IL - AUGUST 15: Customers shop at a Walmart Neighborhood Market store on August 15, 2013 in Chicago, Illinois. Walmart, the world's largest retailer, reported a surprise decline in second-quarter same-store sales today. The retailer also cut its revenue and profit forecasts for the fiscal year. (Photo by Scott Olson/Getty Images)
Signage points customers to Walmart.com at the pharmacy exit during the grand opening of a Wal-Mart Stores Inc. location in the Chinatown neighborhood of Los Angeles, California, U.S., on Thursday, Sept. 19, 2013. Wal-Mart Stores Inc. will phase out 10 chemicals it sells in favor of safer alternatives and disclose the chemicals contained in four product categories, the company announced Sept. 12. Photographer: Patrick T. Fallon/Bloomberg via Getty Images
A Wal-Mart Stores Inc. location stands in Brasilia, Brazil, on Friday, Jan. 15, 2016. Wal-Mart Stores Inc. plans to close 269 stores, including its experimental small-format Express outlets, in a push to streamline the chain that will affect 16,000 jobs. The effort includes the closing of 60 money-losing stores in Brazil, a country where Wal-Mart has struggled. Photographer: Lula Marques/Bloomberg via Getty Images
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He said he managed the Costco program for a dealership where he worked more than two decades ago.

"I was impressed with Costco's program and how much easier it was for the dealership because consumers trusted Costco and appreciated the haggle-free pricing and hassle-free experience," he told Automotive News. He said he became "convinced that this was the right way to sell cars — with a fair, transparent price, presented by brands the customer trusts most."

Costco is one of the nation's top car sellers. The company sold more than 465,000 cars last year, or about 1,000 cars per store.

CarSaver is aiming to sell about 1,000 cars annually through each Walmart store. So if the program is successful and expands to more than 450 stores, it could become a major threat to Costco's service.

Walmart spokeswoman Molly Blakeman says the program is still in test mode, however.

CarSaver launched a pilot program last year at a Walmart store in Stuart, Florida.

"We're still evaluating customer response," Blakeman told Business Insider. "It's not uncommon for us to test different customer offerings in our stores using our leased spaces."

About 80% of the dealership appointments made through the Walmart store turn into sales, according to Automotive News.

So what does Walmart get out of the program?

The company has a landlord/tenant relationship with CarSaver like it does with others that occupy the leased space at the front of its stores, including McDonald's and Smart Clips, Blakeman said.

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