There is no question that, over the last few years, the ranks of the independent auctions in the National Auto Auction Association are shrinking.

We have observed the buying sprees by digital platforms like EBlock (three U.S. acquisitions) and ACV (10 U.S. acquisitions, including long time iconic auctions like Dealers of Oklahoma City, 166 Auto Auction, and Indiana Auto Auction).

And we have witnessed the driven expansion of private equity-backed America’s Auto Auction, which is deemed the third industry “chain” now, with nearly 50 locations coast to coast and a strong digital (outside the gate) presence.

In the face of this consolidation, we are still seeing expansion and acquisitions by existing true independents. McConkey Auction Group continues to dominate the Pacific Northwest with new greenfield operations in Alaska and Portland, Ore., adding to its very successful auctions in Spokane, Wash., and Seattle. The Dealers Auto Auction Group, led by David Andrews, has a solid 10 auctions located predominantly across the Southeast and continues to seek out acquisitions in new markets.

For decades, this independent auction community has positioned a value proposition of speedy responsiveness to the marketplace and its customers. Not hamstrung by layers of multi-tiered corporate managers to approve even the smallest of decisions or expenditures, these independent auctions are owned by families that guarantee continuity and consistency.

All of this was well-witnessed and documented in the post-COVID period, when independent auctions moved swiftly to reinstate “run & drive” live auctions — that became key to reopening the marketplace with vigor.

It is evident that the dealer community (both franchise stores and independent car lots) has embraced its relationship with the independents, while the large publicly owned dealer groups (both franchise and independent) have gravitated to the three chains.

Darrin Aiken, former long-time remarketing head of Wheels, Inc. maintained for years that independent auctions were absolutely critical in providing a check-and-balance system within the remarketing community, barring any one entity from “running the table,” and possibly imposing process, service, and pricing mandates on the industry.

That being said, however, Darrin was also one of the first commercial consignors to himself move almost exclusively to the chain  auctions, driven by the opportunity to turn remarketing into a profit center by means of substantial and powerful rebate programs. Those rebate programs put independent single-point auction operators at a marked disadvantage, despite their proven ability to provide award winning service in their local markets.

In recent years, Manheim has emerged as the 800-pound gorilla. And while 73-plus locations in the United States certainly constitutes a formidable competitor, I have to ask: “Is Manheim/Cox a corporate ‘chain’ … or just a very large ‘Independent’?”

I would argue the latter, as the Cox family has consistently, over the span of multiple decades and the tenure of several senior executives, proven to genuinely care about the industry and all its constituents, customers and competitors alike. In fact, Manheim/Cox is neither publicly traded nor private equity backed. The Cox family owns Manheim (and its parent, Cox Automotive) lock, stock and barrel. At what point or location size have we determined that Manheim has too many dots on the map to not be deemed an independent?

My point is not a lengthy discourse on what constitutes “independent” in our industry. Rather, it is to validate Darrin Aiken’s premise that the independent auctions provide an important measure of balance in the remarketing ecosystem.

Any industry is better and healthier when there is competition from independent companies, whose owners risk their personal capital day in and day out, running businesses that strive to be viable, relevant, and profitable.

These owners care about the well-being and development of their teams and staffs, about continuity and generational longevity, not just about stock prices or quarterly earnings, or at what multiple the financial masters can exit and push the enterprise to the next owner.

Today’s auction marketplace includes independent auctions that are every bit as large, data driven, savvy, and technology laden as any within the three chains … and are likely better capitalized than some of the digital players.

You need only look at auctions like Southern Auto Auction, Auto Auction of New England, Bel Air Auto Auction, Carolina Auto Auction, the McConkey Auctions, Dealers Auction Group, Greater Rockford Auto Auction, Great Lakes Auto Auction, Expressway Auto Auction, Norwalk Auto Auction, Big Valley Auto Auction, Akron Auto Auction and Value Auction, to name just a few of the independents that are in every way on the cutting edge of automotive remarketing..

Auto dealers and commercial accounts alike can attest to the service level, buying power and agility in the marketplace of independent auctions (in which I include Manheim/Cox). The independents consistently demonstrate creativity, passion, integrity, and yes … just plain caring.

Our firm knows all too well that, as with any industry in the current economic cycle, there will be businesses whose owners look to exit. This should not be considered a negative. Auto auctions get sold for a variety of reasons, just like businesses in every other industry.

Conversely, it is heartening to see that at every NAAA meeting there are new auctions seeking admittance to the national trade association, ensuring the continuity of privately owned independents around the country.

I don’t see our industry going the way of hardware stores just yet. In that industry, which has been swept up by behemoths like Lowe’s and Home Depot, you can barely find an independent hardware store anywhere. But when you do, you’ll find an absolute gem.

The gems in the remarketing industry are more prominent and easier to find. They are the independently owned auto auctions. Much like privately owned dealerships (both franchise and independent) these businesses are often multi-generational, well-capitalized, well-respected in their communities, and incredibly well-run. They bring excitement and vitality to the industry and possess the true grit to succeed against the larger chains through all economic conditions.

I would encourage auto dealers (the vast majority of which are ALSO privately owned and often multi-generational) to meet and support their local independent auto auction. Likewise, I encourage commercial accounts to maintain a diversified mix of independent auctions in their portfolio disposition processes.

Independent auctions bring vitality and balance to the remarketing industry. I agree with Darrin Aiken that they are vital to any successful vehicle remarketing program.

 

Pierre Pons is the CEO of TPC Management Company. For nearly 30 years TPC Management been involved in all facets of automotive remarketing, working with independent auto auctions across the United States in addition to various Canadian entities.