Chip Perry to lead TrueCar
Chip Perry will succeed founder Scott Painter as head of the car-shopping site.
The former longtime head of AutoTrader will become online car-shopping portal TrueCar’s CEO.
TrueCar Inc. believes that it has found a chief executive who can put the brakes on the company’s bumpy ride this year.
The online car-shopping portal said Monday that Chip Perry, the former longtime head of the AutoTrader.com car-selling site, would become TrueCar’s president and chief executive Dec. 15.
Perry, 62, will succeed TrueCar’s founder Scott Painter, who said in August that he would step down as CEO amid the Santa Monica company’s ongoing losses and some dealers’ unhappiness with TrueCar.
Wall Street cheered Perry’s selection, with TrueCar’s battered stock closing at $7.91 a share, up 50 cents or 6.8%.
“It’s a positive for TrueCar to attract someone of that caliber to run their business,” said Ronald Josey, an analyst with JMP Securities in New York.
TrueCar’s website helps consumers shop for cars from about 10,000 participating dealers.
The company takes a $299 cut from each new-car transaction and $399 for used vehicles while allowing consumers to buy without the traditional haggling with dealers.
With 350 employees, the company continues to grow rapidly. In this year’s third quarter, its revenue jumped 28% from a year earlier to $72.4 million and vehicle sales rose 21% to 208,034 units. Both were record highs for a TrueCar quarter.
TrueCar also said its loss for the first nine months of 2015 narrowed slightly from a year earlier, to $37.5 million on revenue of $196.3 million.
But TrueCar also acknowledged that its rate of revenue growth has slowed, although it did not elaborate. One reason: The company’s relationship with some dealers has been strained.
Some dealers have complained, among other things, that TrueCar’s pricing and sales methods drive down their profits, and they objected to some of Painter’s criticism of dealers’ conventional sales tactics.
TrueCar and some of its dealers also have clashed over how they share customer transaction data. Those dealers include AutoNation Inc., America’s largest dealer group, which severed its relationship with TrueCar in July.
In an interview Monday, Perry said, “TrueCar has in the past had a lot of issues with dealers, and I believe those issues are adjustable. You can’t create a fantastic consumer experience ... without the ready, willing and able participation of car dealers.”
Asked if he hoped to renew ties with AutoNation, Perry replied, “Yes, I would love to find a way of bringing them back into the TrueCar fold, and that will be an early priority.”
That would help TrueCar keep increasing its share of the U.S. new-car sales market (excluding rental cars and other fleet sales), which currently totals 4.1%. TrueCar’s share has grown from 3.5% last year and 2.4% in 2013.
Amid the turmoil this year, TrueCar’s stock came under siege. After the company went public in May 2014 at $9 a share, the stock climbed to nearly $25 in late 2014 before starting a steady decline this year.
Perry was chief executive of AutoTrader.com from that company’s inception in 1997 until 2013, guiding the car-shopping site into a company with $1.5 billion in annual revenue.
He also oversaw a series of acquisitions at AutoTrader.com, including the autoresearch and pricing firm Kelley Blue Book.
More recently, Perry has been president and chief executive of RentPath, the Atlanta-based parent of ApartmentGuide.com and Rent.com.
Before joining AutoTrader.com, Perry was a management consultant with McKinsey & Co. He also was a vice president at the Los Angeles Times, where he led the team that launched TimesLink, an early newspaper online service, in the early 1990s.