After listening to customers, and losing some business to competitors, KAR Global has reversed course on keeping cars out of auction lanes.
The company said it is piloting in-lane sales at 11 ADESA locations in the U.S. for select vehicles and sellers.
CEO Peter Kelly told Automotive News Wednesday after the company reported second quarter results that KAR remains committed to a digital future, and sees its long-term model as one of digital marketplaces supported by physical infrastructure and services.
"It's also important in business to listen to your customers," Kelly said.
The company switched to all-digital sales in March 2020 in the wake of the coronavirus pandemic. Later, even as competitors once again began running vehicles down auction lanes, KAR indicated it had no immediate plans to follow suit. KAR chairman Jim Hallett has been a vocal advocate of all-digital sales, citing safety concerns with physical ones.
Kelly said most customers have embraced digital sales, but a "minority" of them "have expressed a preference to see their vehicles run in lane."
He said ADESA has lost volume to competitors that are running vehicles in-lane. "That's been evident in our numbers," he said. "We've known that for well over a year."
Now, the in-lane vehicle pilot will help determine whether there is some space to run vehicles within a broader digital marketplace model, while also gathering data on whether running cars physically through lanes truly improves the outcome for customers, he said.
"The data that we've had up to this point where we're comparing our data with our competitors' data, doesn't reveal that," he said, adding, "this will give us a true ADESA-only comparison of that data."
The in-lane sales will be limited to older, higher mileage vehicles, and will run for about 90 days.