KAR Auction Services has named Peter Kelly president, a newly created role at the company.
In the position, Kelly will oversee the ADESA auction unit, captive lender Automotive Finance Corp. and online auction platform Openlane, as well as KAR's remarketing and digital services business.
He also will be responsible for the company's data as a service, information technology, sales and marketing functions.
Kelly, 50, most recently was KAR's president of digital services and chief technology officer. He will report to CEO Jim Hallett, 65.
Kelly was co-founder and CEO of Openlane, which ADESA acquired in 2011. Hallett said that purchase was part of a major transition for KAR. "When we acquired Openlane it changed our company overnight," Hallett said, adding that it brought "new ways of thinking" and "new talent" to the company.
The transition pivoted KAR's focus more toward digital business, for example. When ADESA acquired Openlane, the company expected to sell about 300,000 vehicles online that year. Last year, about 1 million vehicles were sold through Openlane. A little more than half of the vehicles sold at KAR's ADESA and Insurance Auto Auctions are sold online, and the number increases every year. TradeRev, the company's mobile-based remarketing service, had record volume last year.
In an interview, Hallett and Kelly stressed that the rise of online transactions should not be seen as the demise of physical ones, which Hallett said also have been increasing for several years. Last year, about 11.5 million vehicles were sold at physical auctions industrywide in North America.
While Kelly joked that he "started a business 20 years ago to put physical auctions out of business," he said he now sees a continued evolution in vehicle wholesaling that includes the physical and the digital. He said a lot of customers, ranging from dealers to manufacturers to captive finance companies, see the value of having vehicles in-lane at a brick-and-mortar site.
That's not to mention the services physical auctions provide, such as vehicle repair and reconditioning, Kelly said. "Those are all critical to our customers," he said.
KAR is using digital and physical auctions as it continues to expand internationally after several years of acquisitions including TradeRev, a dealer-to-dealer sales platform; Drivin, a data services company; Stratim, a fleet-servicing business; and CarsOnTheWeb, a European online auction company that Hallett says has customers in 50 countries.
Kelly will play a key role in overseeing KAR's strategy for aligning the company's acquisitions and implementing its international expansion, which will focus on parts of the world that Hallett calls "mature automobile markets."
Overall, the focus will be delivering services to customers, however they want to do business, he said. "We really want the market to determine where the car should sell," Hallett said. "It shouldn't be us dictating to a customer where the car could sell."
KAR's net income rose 23 percent in the third quarter of 2018 to $77.5 million on revenue that rose 11 percent to $933.5 million.
