John Krafcik is no longer just a board member at TrueCar, he's added the title of President.
John Krafcik, former Hyundai Motor America President and CEO, has been named the President of TrueCar, the automotive sales and data website that is preparing for a stock offering.
The announcement ends speculation about the future of Krafcik, who left Hyundai in December after the South Korean automaker declined to renew his contract. Because of the talent he demonstrated while leading Hyundai’s American operations through a period of rapid growth, speculation about Krafcik’s future has been intense at times.
Krafcik himself told TheDetroitBureau.com that he was considering “a number of opportunities” during a brief conversation at the New York Auto Show in April.
That discussion came just weeks after Krafcik was appointed to TrueCar’s board of directors, a move that brought new credibility tion to the company as it prepared to go public.
“John Krafcik not only has a deep understanding of the automotive industry, but he also knows how to run an organization at scale – and the timing is right for him to join our team,” said Scott Painter, TrueCar’s founder and CEO, who added that Krafcik “brings additional credibility to our commitment to making automotive retailers our partners.”
TrueCar’s Internet-oriented business model offers car buyers not only basic vehicle cost data but also insight into what others actually pay for new vehicles, as well as a network of what TrueCar describes as “Certified Dealers who provide guaranteed savings certificates and seamlessly complete the car purchase.”
TrueCar currently partners with more than 7,500 new car franchises and independent dealers operating in all 50 states and the District of Columbia. But that’s slightly down from the company’s peak as it rebuilds from some legal issues that had threatened its basic concept barely two years ago.
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TrueCar’s model is somewhat different in that it lines up dealer partners who subscribe to the service rather than paying a fee for each potential shopper that’s referred over online. But in 2012, dealers and regulators around the country questioned whether its model ran afoul of strict state franchising regulations. Notably, states like Texas and Virginia bar so-called “bird-dogging,” or auto brokering, where a third party steps in to help a customer get a better price.
The web service was forced to halt operations in several states. But it eventually rejigged its business strategy, in some cases making state-by-state changes. It has since been rebuilding its dealer network.
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“TrueCar is hard at work with our retailer partners, building a bridge of trust with consumers,” noted Krafcik. “I am thrilled to be joining the team and driving this transformation further, in ways that serve consumers, retailers and the industry in new and exciting ways.”
Founded by Painter, who has been involved in a number of earlier automotive-based Internet start-ups, the privately held TrueCar announced plans for an initial public stock offering last month. It is expected to raise as much as $125 million to be used for further expansion of the firm.
For the year that ended December 31, TrueCar reported a $25 million loss. But that was down from a $74.5 million deficit the prior year. And 2013 revenues rose 67%, to $134 million.
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While landing at TrueCar as it prepares for an IPO could prove a financially lucrative move for former Hyundai boss Krafcik, it is nonetheless a surprise to many observers. Various rumors had him returning to Detroit to take a job at General Motors or re-joining Ford, where he held key position before he left for the job at Hyundai.
During his five-year tenure with the Korean carmaker, Krafcik oversaw record sales growth that boosted Hyundai’s U.S. market share by more than 50%.
(Paul A. Eisenstein contributed to this report.)