The Journal Gazette
Sunday, June 16, 2019 1:00 am

Kelley's future: $80 million, 50 acres

Adds brands as market transforms

Kevin Leininger |

The nation's largest used-car dealer, CarMax, is building a store near Glenbrook Square. But thanks to the internet, shoppers won't even have to visit the place. And Arizona-based Carvana doesn't have dealerships at all; its customers get their cars from a huge vending machine.

The art of the auto deal, clearly, has evolved dramatically since the late Jim Kelley founded Kelley Automotive Group on Aug. 21, 1952. Son Tom Kelley, who was born that very day, is confident the company is positioned to prosper in an ever-changing marketplace.

The $80 million auto mall Kelley is building on 50 acres at Interstate 69 and Illinois Road, a high-visibility location that 114,000 potential customers pass daily, is a big reason for that optimism. But not the only reason.

“We started with Buick in Fort Wayne, and life was great. But we've added brands, and thank God we did, because we used to sell 95% cars and now it's 70% trucks,” said Kelley, whose company now also sells such brands as GMC, Chevrolet, Cadillac, Ford and Volvo at six dealerships in Fort Wayne and Decatur and this year announced plans to add BMW's sub-compact Mini to the list.

That large-to-small product diversity, the ability to maintain a healthy inventory and a more-visible location for most of his dealerships, Kelley said, should allow him to adapt in ways smaller competitors can't.

“It's getting harder and harder for single-point operations. We'll have more brand in one location,” said Kelley, who announced in 2017 plans to vacate the 35-year-old 14/69 Auto Mall just to the east of his new location – but out of sight from I-69.

“Visibility is important because people move to Fort Wayne every day who don't know who we are,” he added. “I can't tell you what the business will be like in 10 years – I know everyone will be offering electric vehicles – but we have a good, young management group that keeps up with things. This is the most transparent the market has ever been.”

That's a reference to the internet, which allows prospective customers to not only locate available vehicles but also to know what is being paid for them and, as a result, how much to offer.

Kelley knows some people prefer to shop and buy online without ever talking to a sales representative, but he knows others still want to talk to a real person and test-drive a car before buying it. With 700 employees and a normal inventory of about 1,700 new and used vehicles, Kelley can accommodate both. With about 9,000 sales annually, more than half of them used, the formula seems to be working.

In addition to his used-car Superstore, car wash and body shop, the new mall will feature such brands as Volvo, BMW/Mini, Buick/GMC and Cadillac with room for additional dealerships or tenants.

Unlike the rented facilities Kelley Automotive now occupies in the 14/69 mall, the new buildings will be designed with an eye to customers' ever-changing automotive needs but to their personal comfort as well.

Kelley expects to open new Volvo and BMW/Mini dealerships this year, with the rest of his operations relocated in 2020.

In one sense, however, Kelley Automotive has not merely kept up with the those changes; it has anticipated them. Long before the internet offered shoppers a firm no-dicker price – or even existed, for that matter – Kelley was advertising its “only price” so customers knew exactly what to expect.

“I started (with the company) in 1974, and Dad always had a philosophy: 'We'll sell a lot more cars if we treat everybody fairly,'” Kelley said. That pricing and service philosophy hasn't changed, Kelley said, even though so many other things have.

“As buying habits change, we need to be prepared,” he said. “But at the end of the day, there's a lot computers can't do. People need service and they need to talk to human beings. The more competition, the better because it creates more activity.

“If it brings people to Fort Wayne, we'll get a shot at them.”

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