Kelley Blue Book, which has stopped providing vehicle values on two consumer-oriented Internet shopping sites, is reinforcing its brand among business clients, Jared Rowe, Kelley’s president, said.
Those business clients include companies and government agencies that use its values to calculate loans, residual risk and sales taxes.
Rowe said Kelley is not backing off from providing values to consumers. It dropped its relationships with Cars.com and AOL Autos because Kelley’s brand is well-established and does not need exposure on those sites, he said.
Kelley’s new strategy calls for it to rebalance its resources to give as much attention to the financial and insurance companies and government agency side of its business as it spends on providing values to consumers, dealers and auto companies, Rowe said.
“Our strategy is to be focused on the Kelley brand and what it means, not just to consumers, but what it means to dealers, to OEMs, to finance and insurance companies and to government institutions,” Rowe said. “We’re focused there.”
Black Book, known for its wholesale values, is now the official valuation service for Cars.com, a third-party Internet shopping site for consumers that provides vehicles’ trade-in value, retail sale value and private-party sale value.
Kelley is a unit of the AutoTrader Group, which owns Cars.com competitor AutoTrader.com and auction outfit Manheim. Rowe said those relationships didn’t play into Kelley’s decision to part ways with Cars.com, in April and with AOL Autos “a couple of months ago.”
As proof of Kelley’s brand strength among consumers, Rowe said its kbb.com Web site attracted 19 million unique visitors a month in the first quarter of 2014, a 20 percent increase over the same quarter last year.
Rowe said Kelley has had direct and indirect relationships with financial companies, insurance companies and government agencies “forever.” But, he admits, “it’s a part of the business we underinvested in over the last several years.”
He said the company is reallocating internal resources to align with industry customers’ particular needs. For example, financial institutions need help making retail loans and managing assets and risk, Rowe said.
Kelley can help those institutions structure loans when trade-ins are involved and its expertise in forecasting vehicle values also can help lenders manage their portfolios, he said. Kelley’s residual value unit provides residual values to the auto companies and captive finance companies, an area of continued focus, he said.
Rowe said Kelley’s new strategy will help to align buyer and seller expectations better. Buyers and sellers don’t have to have the same price information but both want prices that are reasonable, he said.
Range of prices
That’s why a search for values on kbb.com provides a range of prices rather than a single price. The company introduced range-based pricing for new cars last October and for used vehicles on Tuesday, May 20.
Rowe said Kelley’s research shows that a range of prices reflects how both buyers and sellers want to see price data.
“When you think about car sales,” he said, “when these two ranges overlap is when the magic occurs.”
Rowe said Kelley is re-evaluating the relationships it has with various companies and will determine whether they fit the company’s new strategy.
David Barkholz contributed to this report.
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