CARY, N.C. -

Selling all vehicles digitally is the “ultimate goal” for Manheim, says president Grace Huang, but the company and the industry at-large aren’t quite there yet.

There are steps yet to be taken, and Huang discussed these and more in an online press conference with reporters and in a follow-up interview with Auto Remarketing last week.

“It’s really an aspiration. I don’t have a fixed date,” Huang said when asked when that all-digital goal might be reached.

Auctions were largely forced to go all digital at the outset of the COVID-19, and while many of Manheim’s customers are comfortable with all-digital buying, some are not onboard with going 100% online just yet, Huang said.

Going digital for many clients was a necessity, not necessarily a preference, Huang said.

With that in mind, Manheim has resumed some in-person in-lane sales at some of its auctions. But the company has its eye on a digital future, though, and is putting together the puzzle pieces around processes like condition reports and vehicle imaging in order to meet that goal.

That’s a major reason why parent Cox Automotive purchased Fyusion, a company in the computer vision and vehicle imaging solutions space, to begin the year.

"Until we really get condition reports and vehicle representation online as good as seeing it in person, regardless of the type of vehicle, that's when I feel like we can get to 100% (digital),” Huang said.

Going all-digital will require that clients and dealers have a high level confidence in online buying, she said.

“Personally, if you ask me not (as) president of Manheim, yeah I would love to go 100% — I would love to have stayed 100% (digital). But we're here to serve the entire marketplace,” Huang said. “At some point the client feedback was so clear that we knew we had to bring them along. And so, we're going to continue to invest and we're going to continue to work on improving our inspections, vehicle information and condition reports. That's the Holy Grail.”

The company has invested “hundreds of millions of dollars” in the digitization of Manheim in recent years, Huang said. While that was investment was already important and beneficial prior to COVID-19, the pandemic certainly underscored the necessity of those efforts, to put it mildly.

“We have clear benefits of why we did that back then, but boy it could not have been more clear of why we did that and why we needed to do that when March hit in 2020,” Huang said. “Had we not made that investment; we would have been in a very different situation. Could we have operated 100% digital? Yes. Would it have been very, very difficult to send all of our front office home? Yes. 

“We've had the luxury of being able to invest ahead of time. We've also, in the last year, obviously invested a lot even prior to COVID 19 in Manheim.com, with the new experience and in the new Simulcast, which we launched in the last half of 2019. And again, we knew we had to upgrade the technology. We knew we had to do something. But boy, when March came around, we were glad we had launched the new Simulcast.”

And while Manheim has begun to run cars through lanes again in select spots, digital is the driving force of growth. In fact, digital dealer sales for the auction company climbed 190% last year. And 83% of its transactions were digital.

As 2021 got underway, Huang outlined in an update several product updates, in addition to the Fyusion purchase, that can lend some support in the digital space.

Among those is a Digital Buyer Protection Program described is as an “umbrella” plan that protects digital buyers throughout the Simulcast, OVE and Manheim Express platforms.

The company is also investing specifically in the Manheim Express dealer-to-dealer sales app, including upgrades to the Manheim Express Concierge program, which gives dealers a specialist to take care of listing their on-the-lot vehicles for sale.

The company is adding a Concierge Inspection Guarantee to the tool, whereby Manheim would arbitrate inspection-related claims on the selling dealer’s behalf. The company is also doubling the staff of Concierge.

Additionally, Manheim has partnered with vAuto to create a Manheim Dashboard that helps vAuto Provision customers in buying decision-making within Manheim Marketplace.

Regarding the Concierge staff increase, Huang said in a Q&A with reporters that increased demand for off-site sales amid the pandemic led to that decision.

“And really what's driving it is, back in March of last year, our physical locations weren't able to continue to necessarily operate in the same way. We were running Simulcast sales. Our concierge though was still able to go onto dealer sites. And so increasingly, we're seeing greater adoption of selling cars off-site,” Huang said. “I know we've got lots of competitors — but Manheim brings to the space is that ability for us to do both.

“We can create a cascade for dealers. Listing cars quickly off-site, and if that doesn’t sell, they can then move the cars quickly off to one of our locations to sell on site, whether it's through Simulcast, OVE or through the lanes,” she said. “So, for us, it’s about …creating that omnichannel experience. and what we've learned is that that off-site Manheim Express piece is a critical piece to that.”

It’s a piece of Manheim’s larger overall digital strategy, which includes a host of platforms and methods of online buying and selling. And they’re not alone in the industry, obviously.

KAR Global, the parent company of Manheim’s chief rival ADESA, has not resumed vehicles running in lanes and in November closed a $425 million purchase of BacklotCars, a deal that added to its digital marketplace arsenal that already included the likes of ADESA.com, OPENLANE and TradeRev.

Independents have upped their digital game, as well, including those working with EBlock, which last year began facilitating online dealer-to-dealer sales for independent auctions.

And standalone companies digital wholesale marketplaces, like ACV Auctions, continue to show growth. That includes big news on Thursday when CarGurus completed its acquisition of a majority stake in CarOffer, an automated instant vehicle trade platform.

As online-only channels in the wholesale space continue to grow, Huang said one way Manheim can set itself apart is through the space it can provide.

"At the end of the day, physical space is still really important in our industry,” she said. “We saw that through the peak of COVID-19 when consignors had nowhere to bring their off-lease vehicles. Manheim Pennsylvania hit over 40,000 vehicles, when normally they have about 27,000. 

“We were stuffing cars everywhere, in every nook and cranny back in March and April of last year. And so, it's still a huge benefit and asset that we have,” Huang said.

That benefit is also seen in Manheim’s retail reconditioning service, which “continues to grow,” she said.

“And as we focus more and more on fleets, that space becomes more and more important in our retail recon space,” Huang said.

She points out that dealers don’t necessarily want to have trade-ins sitting on their lots for an extended period of time.

“So, we were able to create a cascade for them. We come out, inspect the vehicle, get it listed online quickly. if it sells, great. If not, we immediately come back, pick up the car, take it and so they never see it again, and take it to one of our physical locations,” Huang said.

"And dealers have told us, they don't want these cars sitting around forever on their lots. At some point they want it gone so that they have space for the next batch of trade-ins,” she said. "So, we see that definitely as a competitive advantage when we couple all of it together."