August 2012

Primeritus Financial Services Reveals Multiple Management Promotions

NASHVILLE, Tenn. - 

Primeritus Financial Services recently announced several top management promotions at its California location and one promotion at its Tennessee office. 

Among the promoted members of the El Dorado Hills, Calif., office are:

—John Fountaine, vice president and general manager
—Chris Oskiera, vice president of USA Recovery
—Bill Sheehan, vice president of sales, operations and IT
—Brett Whitten, vice president of corporate projects
—Dan Maue, chief financial officer
—Lisa Bear, vice president of human resources
—Vick Kuzmenko, director of transport
—Craig Takett, SkipMasters Operations Manager

 “We knew with our recent business acquisition in California, we were getting a group of great operators.  It didn’t take long for us to promote these top performers from within the company,” said Chuck Tapp, chief executive officer of Primeritus Financial Services, a Gold Level Sponsor of this year’s Re3 Conference that talks places halfway through Used Car Week.

“Their expertise and experience as a team made the transition smooth, and the products we offer our clients stronger and wider in scope,” Tapp added.

In the Nashville, Tenn., office, Keith Baggett was promoted from director to vice president of vendor relations.

“Keith is one of those rare individuals that genuinely wants to help everyone, which is why we chose him to oversee our agent network,” Primeritus president Phil Hanks noted.

“We look for individuals who are here to not only help grow our business, but to help grow our partnerships with agents and clients alike,” Hanks went on to say.

Tapp will be a part of a panel discussion at the Re3 Conference, which delves into the recovery, repossession and remarketing fields and is scheduled for Nov. 14.

The Primeritus executive will be joined by nearly a half dozen other professional for a session titled, “The Evolution, Revolution & Diversification of the Forwarding Model.” Other individuals scheduled to participate are:

—Jerry Kroshus, president, PAR North America
—Jose Mendiola, president, American Lending  Solutions
—Claudia Plascencia, vice president, Repo Remarketing
—Kevin Flynn, CEO, Renovo Services
—Mary Jane Hogan, president, ARMS 

The agenda Re3 Conference presented by PAR North America and Digital Recognition Network can be found at re3.autoremarketing.com.

Re3 takes place in the middle of Used Car Week.

Starting with the CPO Dealer Forum presented by AutoTrader.com, Used Car Week gets underway with an event designed specifically for dealers.

This intensely educational two-day gathering — held Nov. 12–13 — will shine the spotlight on the certified pre-owned industry. The nation’s top dealers will share their on-the-lot experiences with selling, pricing, sourcing and marketing their certified pre-owned vehicles.

Attendees will have opportunities to ask questions, share best practices and start conversations with dealers from across the country, leaving the event with fresh new actionable ideas for maximizing profits in their certified pre-owned sales.

Used Car Week will wrap with the National Remarketing Conference presented by SmartAuction from Nov. 14–16.

NRC — Used Car Week’s flagship event — is now in its 13th year, and it remains at the leading edge of the remarketing industry.

The NRC session is all part of the Used Car Week conferences, which are being held at The Phoenician Resort in Scottsdale, Ariz., from Nov. 12 through 16.

For three days, NRC attendees will be immersed in the big ideas, market insights and in-depth conversations that will shape the future of remarketing.

Whether they happen on the golf course or in the general session room, during a networking event or a small-group discussion, the dialogues sparked during the National Remarketing Conference will lead to solid results for your business.

Plus, an evening networking reception shared between Re3 and National Remarketing Conference attendees will offer an exceptional opportunity to continue discussions and connect with the broader industry.

Attendees can obtain an early-bird discount to all of these events through Oct. 15.

More details about registration and sponsorship opportunities can be found at www.usedcarweek.biz.

Beige Book: Dealers Faring Well; Used-Car Strength Spotted

WASHINGTON, D.C.  - 

The Richmond and San Francisco regions were the only two Federal Reserve Districts said to have had “a bit slower paced” auto sales in the latest Beige Book report, but even these two districts are seeing hefty demand, according to the Fed, particularly on the used-car side.

This was just one of several favorable signs for dealers spotted in the report issued earlier this week, which noted widespread strength in cars sales throughout the country.

Specifically, the Fed noted that its New York, Philadelphia, Atlanta, St. Louis, Minneapolis and Kansas City districts saw car sales climb in the most recent reporting period, while its Cleveland, Chicago and Dallas regions experienced “flat” markets.

And even though sales were “a bit slower paced in Richmond and San Francisco,” the Fed found that “vehicle demand in the latter two districts is still strong, especially for used cars.”

Though most of the analysis centered on new-vehicle sales, the latest Beige Book offered bits of insight on the used-car market throughout various pockets of the country.

For instance, the Fed found a modest uptick in used-vehicle sales in the Cleveland District when comparing July to June, and noted that Richmond saw
continued shortage of used supply, “putting upward pressure on prices and improving trade-in values.”

Officials also reported on used-vehicle activity in the St. Louis District. The Fed reported that 13 percent of responding dealers saw used-vehicle sales increase relative to new-car sales. Meanwhile, a third saw new sales climb against used.

Lastly, the Fed noted that in the San Francisco District, “Used vehicles have been in short supply, raising their trade-in values and helping to spur sales of new vehicles.”

The analysis comes just as several industry analysts were releasing their projections for August used-vehicle sales. CNW Research, which released its projections last week, is anticipating 3.89 million used sales for the month, while TrueCar.com expects a shade less than 4 million.

Meanwhile, Edmunds.com said on Thursday that there will likely be 3.1 million used sales this month.

Edmunds: August Used Sales to Soften Slightly from July

SANTA MONICA, Calif. - 

A strong month for new-car sales evidently will take a toll on the August used-vehicle sales performance if the projections from Edmunds.com  come to fruition.

The site expects this month’s used sales level to soften slightly from July’s figure, estimating the total amount of transactions at franchised and independent stores as well as private-party deals will total 3.1 million. That amount left Edmunds’ used seasonally adjusted annual rate for August at 36.9 million.

The site indicated there were 3.2 million used sales in July, resulting in a SAAR level of 36.3 million.

During a conference call on Thursday that mainly discussed how new-vehicle sales might land this month, Edmunds.com senior analyst Jessica Caldwell made the connection between strengthening new-car sales and used-vehicle sales that might be off a bit.

“Used sales have obviously been hot over the last few years,” Caldwell began. “Clearly the used market is not as clear, cut and dry as the new market because you have private-party sales and independents. 

“It’s very seasonal. There’s definitely ups and downs,” she continued. “In terms of the softening, whenever there is more opportunity on the new-car side, whether it’s incentives or longer loan rates, there is more flexibility on the new side, and that can hurt used-car sales.”

Edmunds thinks there are going to be 1,287,603 new models sold in August for an estimated SAAR this month of 14.5 million light vehicles. 

If the numbers hold, Caldwell indicated August will be the second-best month of the year in terms of SAAR and the third-best month in terms of unit sales.

“Sales showed signs of flattening out in the first couple months of summer, so August’s sales figures will come as a nice surprise for everyone in the auto industry,” Caldwell highlighted.

“Automakers and dealers have been very creative in packaging hidden incentives in recent weeks, and when you combine that with the sell-down of popular 2012 model year vehicles, there have been some nice deals available to car buyers,” she continued.

Going back to the used-car side, Caldwell pointed out the projected downturn for August likely won’t develop into an extended trend.

“Used sales have been so strong over the past few years that it’s going to slow down at some point, but that’s not necessarily a trend. I think it can bounce back to where it was,” Caldwell stated.

TrueCar's Used-Car Projections

Earlier this week, TrueCar called for 3.99 million used sales this month, which would be a 4.7-percent increase from a year ago.

“It’s mostly an inventory-driven increase,” explained Jesse Toprak, the company’s vice president of market intelligence.

In essence, the increase in new-car sales volumes in recent years has now led to “slightly” greater availability of used units aged three years or newer, Toprak said.  There are simply more of these cars out there.

Also driving the year-over-year increase has been sales of the $10,000-and-under crop of used units, as Toprak noted, “That business remains strong.”

Granted, the nearly 4 million used sales expected industry-wide in August would be down 13.3 percent from July, TrueCar noted. However, Toprak attributes this mostly to “seasonality.”

Manheim Operations Navigate Through Hurricane Isaac

ATLANTA and BATON ROUGE, La. - 

It’s been a busy week for Manheim operations in the path of Hurricane Isaac, as the company began preparing its auction facilities for the storm as early as Monday.

In a message sent to Auto Remarketing late Thursday, Kyle Ohman, Manheim’s market vice president for the Southeast, explained how the company prepared for the storm that state and federal officials said came ashore as a Category 1 hurricane and dumped several inches of rain while leaving more than 900,000 homes and businesses without power in Louisiana alone.

Ohman said, “Our goal was to ensure that our employees were fully aware of the storm and made plans to ensure their safety, the safety and security of our auctions and how to communicate with us through our company alert system.”

Ohman noted that the company’s preparations started in Florida as Manheim Pensacola management closed the facility on Tuesday afternoon.

“As the storm quickly moved past Florida, we resumed operations on Wednesday,” Ohman said. “We reached out to all of our customers who conduct business at these locations, ensuring they knew our plans so they could plan accordingly.”  

Manheim New Orleans and Manheim Mississippi — locations in the more highly affected areas — experienced a bit more of Isaac’s impact. 

At Manheim New Orleans, Ohman said management closed operations on Tuesday afternoon as well as Wednesday “as employee and customer safety were our greatest concerns.”

Manheim New Orleans reopened for business on Thursday.  

At Manheim Mississippi, management modified business hours on Wednesday but full operations came back a day later.

“To support our customers, we ran our regular Thursday sales,” Ohman explained. “They requested that we hold the sale so they could conduct business and we wanted to be there for them.”

As far as Manheim’s Total Resource Auctions sales in Mobile, Ala., and Lafayette, La., Ohman indicated management ran its regular Wednesday sales.

In preparation for possible disaster relief needs for Manheim employees in the area, Ohman mentioned the human resources team at the corporate office in Atlanta shared relief resources and information last week with Gulf-area HR managers. 

“As a division of Cox Enterprises, Manheim employees will have access to the Cox Employee Disaster Relief Fund (CEDRF) should the need arise,” Ohman noted. “Our CEDRF team in Atlanta is standing by with immediate assistance for all Manheim employees as needed through the end of the week.

Manheim reiterated CEDRF is a 501(c)(3) charitable organization funded by donations from Cox employees to provide financial assistance to employees with unexpected needs resulting from a disaster.

While the storm did not reach the strength of Hurricane Katrina that ripped the region seven years ago, Hurricane Isaac still left a significant mark.

According to the Louisiana Public Service Commission, 901,000 homes and business — about 47 percent of the entire state — was without electricity.

Gov. Bobby Jindal said much of south Louisiana picked up at least five to seven inches of rain from Isaac, with some places inundated with as much as 12 to 16 inches by Thursday.

Jindal cautioned that a significant portion of the state was going to feel storm effects.

“This is a very slow moving storm which means there will be sustained periods of heavy wind and heavy rain,” Jindal said.

Officials from the National Hurricane Center in Miami indicated Isaac slowly moved more than 160 miles northwest of New Orleans by midday Thursday. However, the storm still packed sustained winds of 40 miles per hour along with torrential downpours as it slogged toward Arkansas.

“Isaac is expected to produce total rainfall accumulations of seven to 14 inches with isolated maximum amounts of 25 inches possible over northern and eastern Louisiana, much of Mississippi, southwestern Alabama, Arkansas and into southern Missouri through Friday,” center forecasters said.

“These rains could result in significant lowland flooding,” they emphasized. “The heavy rain potential will be spreading eastward this weekend into portions of the Midwest and Ohio Valley regions.”

Once the storm finally passes, the wholesale industry likely will be bracing for another influx of flood-damaged units.

When vehicles are flooded, unscrupulous individuals may try to take a title to another state and get it washed. Each state tends to brand vehicles differently. This can be a big challenge for the used-car industry that must keep on the lookout for such units.

“Once owners of damaged cars settle up with their insurance companies, vehicles are sometimes refurbished and resold, usually to an unsuspecting buyer in a state unaffected by the disaster,” stated Ron Montoya, consumer advice associate with Edmunds.com. “Electrical and mechanical problems can then surface long after the seller is gone, leaving the new owner with an unreliable car and no recourse against the seller.”

Isaac’s impact on the region might not be as much as what happened here seven years ago.

Carfax’s Chris Basso estimated that Hurricanes Katrina, Rita and Wilma combined damaged 600,000 vehicles when these storms all pounded the U.S. in 2005.

Basso told Auto Remarketing last September about the long-time ramifications on the wholesale market from those storms.

“We’re still seeing reports of those cars coming out,” Basso noted. “Even six years later, people are still feeling the effects of Katrina cars.”

Brasher: Repos & Lease Returns Strong; Rentals Struggling

SACRAMENTO, Calif. - 

Repossessions and lease returns are very strong in the auction lane, while rentals are struggling, said John Brasher of Brasher’s Sacramento Auto Auction in the facility's post-sale video report this week.

Also strong in the lanes, Brasher noted, were most dealer trades.

“Our closed Ford factory sale was the strongest we’ve had in many months,” Brasher added. “But in our open sale, both in the Ford lanes and in some other lanes, the rentals seemed to be struggling a little bit.

“Buyers and sellers don’t quite seem to have a meeting of the minds yet, but that will definitely come around in the fall,” he said.

On the low end, Brasher noted that many of the new-car store trades struggled somewhat in the lanes.

“There have been a lot of trades generated by a lot of new-car sales; I think that’s affected that lower end,” he said. “Overall, it was a very good sale. Dealers needed inventory, and they competed head to head for the right cars.”

To view the entire post-sale report, see www.brasherssacramento.com.
 

Former Volvo CPO Leader Moves to Remarketing Post at Hyundai Capital

ATLANTA and IRVINE, Calif.  - 

A former leader of Volvo’s certified pre-owned program now has a remarketing post with Hyundai Capital America.

Auto Remarketing learned this week that Johnny Lee is now the manager of remarketing planning with the Irvine, Calif.-based company.

Lee was with Volvo Finance from 1997 to 2002, then Volvo Cars from 2002 to 2009.

His time with Volvo Cars included a post as retained value & remarketing manager from 2002 to 2005 and time as CPO, remarketing & rental fleet manager from 2005 to 2009.

Stay tuned to Auto Remarketing for more details on Lee’s new position as well as another U.S. used-vehicle leadership announcement involving a different import automaker.

More on Lender

Hyundai Capital America had one of the highest lease penetration rates spotted by Experian Automotive in a first-quarter 2012 analysis released this spring.

As reported in Auto Remarketing’s "Used-Car Market Intelligence Report," nearly 53 percent of its first-quarter new-vehicle financing was comprised of leases. This put the lender third among 10 ranked by Experian, as Hyundai Capital trailed only Mercedes-Benz Financial (76.21 percent) and BMW Bank of North America (56.92 percent).