Pierre Pons and ServNet, a group of 22 independent auctions, are ending their contract at year end after what will be a 12-year tenure for Pons as CEO.
ServNet will switch back to being run by a single yet-to-be-named executive director vs. the corporate staff in place since Pons took the helm in 2008.
Pons: Back to “core business”
Pons, who will help with the transition, led ServNet through "monumental changes" in the auction industry, ServNet President Eric Autenrieth said in a statement. "Not a small part of that was adjusting to major industry acquisitions and consolidations, and a major restocking of auctions within the ServNet group, with more than half our membership joining the group during Pierre's tenure as CEO," he said.
Automotive News caught up with Pons, 59, for a wide-ranging interview on his future and what's ahead for auto wholesaling. Here are some highlights.
His departure will allow Pons to focus on his work as president of TPC Management Co., which provides consulting and recruiting services to auctions, including 18 ServNet companies.
"It's time for me to go back to our core business," he said.
As CEO of ServNet, Pons said he wanted the 22 auctions to compete "fiercely" with everyone else, including the industry's two big players, Manheim and ADESA. "But the reality is, in certain markets our biggest competitor is another independent," he said. That has limited which companies Pons could do consulting work for, but his potential client base will be broader after the change.
If industry executives don't recognize the challenges facing the wholesale sector, "you're asleep at the wheel," Pons said.
A big one, and not exclusive to auctions, is the digital transformation, he said. While Manheim and ADESA parent KAR Auction Services are ahead, Pons said, independent auctions are also keeping an eye on "disrupters" such as online auction ACV Auctions.
Pons, though, takes umbrage with the term "disrupters."
"I tend to feel that us old-economy, brick-and-mortar entities can be every bit as disruptive as some app," he said.
He noted that some upstart companies throughout the digital space — Uber, for instance — have grown rapidly but continue to report losses.
Traditional auction companies generally have to be profitable or they go out of business.
"The brick-and-mortar auctions are not putting their head in the sand about technology," Pons said. "It's no longer physical or digital. ... It's brick-and-mortar and digital. Every auction in the country, if you're going to be viable, if you're going to play on a big scale, you've got to be able to have those technologies."
Other key factors Pons sees facing the sector are maintaining safety standards and the development of people. His TPC Management Co. started its Auction Academy training unit several years ago.
Pons will look for more development of talent at the 194 independent auctions through mentoring programs.
If the next generation of talent isn't developed, "That will be our Achilles' heel going forward," he said.
The good news for the wholesale sector is that independent auctions have generally been able to maintain profitability amid lagging volume thanks to higher conversion rates, Pons said. It all comes down to supply and demand. New-vehicle sales have slid, but used-vehicle sales are picking up.
"And so that has a positive impact on auction activity because we're in the auctioning-used-cars business," he said. "Dealers need used cars. They will get a good number of them back on trade or off-lease, but that won't even be enough to satisfy the used-car demand."
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