KAR Keeping Up With Mobility Trends
Hallett says KAR and STRATIM's platforms will complement each other as the way people get around evolves.
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowCarmel-based KAR Auction Services Inc. says its acquisition of a San Francisco company is a move to keep up with the evolving mobility space, which Chief Executive Officer Jim Hallett says is moving "very, very quickly in North America."
In February, KAR announced the acquisition of STRATIM, which develops fleet management software for the on-demand car, ride sharing and autonomous vehicle markets. KAR, which sells millions of vehicles in more than 100 countries throughout the world, says the deal strengthens its position as a tech leader as the company adapts to the changing habits of consumers.
As car sharing becomes more popular and continues to grow, says Chief Commercial Officer Richard Howse, “we want to participate in that.” STRATIM, founded by tech leaders from companies including Google, eBay and Trulia, uses real-time data and predictive analytics to help service providers oversee their operations.
Hallett says KAR and STRATIM’s platforms will complement each other as the way people get around evolves. Some Millennials in urban areas choose not to own a car but may need them by the hour or the day. He says KAR customers that provide temporary vehicle services have large fleets that need to be maintained, and the acquisition will allow them to more seamlessly do that.
Another growing trend that the acquisition helps KAR address is interest and investment in autonomous vehicles.
"If you look at all the predictions, it’s going to happen sooner or later, but everybody has a little different timeframe," says Howse. "So what we’re trying to do is set ourselves up for that future, knowing that time is coming, and we want to get in and make sure we fine tune what we’re doing and we have all the right pieces in place, because it’s going to grow and it’s going to grow rapidly at some point in time."
The STRATIM acquisition will also put KAR in a stronger position in the electric vehicle sector. KAR estimates original equipment manufacturers are investing more than $80 billion in electrification. That leaves service providers the task of providing the technological infrastructure to keep that market growing.
“It’s changing,” says Howse. "It’s changing by the minute, changing by the week, and every day there’s a new innovation and a there’s new investment. It’s something that we’ve just got to keep our eye on because it’s changing so quickly."
KAR says investing in these growing trends shows its commitment to being a technology company. In September, the company announced plans for a new $80 million global headquarters in Carmel in a move expected to result in about 400 new jobs by 2020. KAR plans to move into the 13-acre site in the second half of 2019.
"I’m glad that our company is open to look at all these different trends and investing and looking where is necessary, because we want to be able to disrupt ourselves, we don’t anybody to disrupt us," Howse says. "We want to make sure we’re on the forefront and the leading edge."
Hallett says the acquisition positions KAR to provide more services to customers it already serves in these growing areas.
Howse says electric vehicles will only continue to become a bigger part of KAR’s business.