CARY, N.C. -

For Manheim, 2020 began as an anniversary year, its 75th. And, of course, it still is.

But for the auction company and wholesale auto industry at large, it has evolved into a milestone year in and of itself.

What started as a year to commemorate a landmark from the past will arguably be looked upon in the future as a year that perhaps changed the auction industry forever.

At Manheim, the largest of the corporately owned auto auction chains, it has been quite a saga since COVID-19 began impacting the U.S. en masse in mid-March.

Manheim had gone simulcast-only starting in March, then began allowing inventory previews on May 1. On June 8, sellers were allowed to return to rep vehicles. The week of June 22, the pilot return of in-lane bidders began at five locations.

That pilot, where vehicles are sold via Digital Block and do not move through lanes, has steadily expanded over the summer, and as of mid-September, more than 50 Manheim locations were participating.

Dealers at these 50-plus pilot locations are able to bid in-lane through Digital Block sales, which include in-lane bidding on site at Manheim auctions with a live auctioneer and simulcast. Vehicles remain stationary and can be viewed on screens. They do not move through lanes.

This new, pandemic-pushed digital way of doing business has led to a subtle, yet noticeable shift in auction sales for Manheim.

In an August interview for this story, Manheim president Grace Huang said that prior to COVID-19, about 50% of the company’s buyers were online, but activity tended to move “back and forth” from in-lane bidding to Simulcast bidding.

“And right now, the majority of the bidding is happening on Simulcast, obviously, with fewer people in lane. And you can see the dynamics shift. Simulcast is moving so fast, that the in-lane bidders, frankly … they get in and then the next bid is a Simulcast bid and then before you know it, there are 20 Simulcast bids piled on top of each other,” Huang said.

“And you can see the dynamic shift. It’s subtle, right. It used to be a much more back-and-forth between the in-lane and Simulcast. And now it’s the in-lane is participating in a Simulcast sale versus the other way around, Simulcast participating in an in-lane sale. It’s kind of reversed,” she said. “Subtle. But again, it speaks to how things have changed.”

Many if not most of the independents are running vehicles through the lanes again. ADESA, another corporately owned chain, is not.

Will Manheim, eventually? Perhaps.

In answering a question about 2020 being a milestone year, Huang said: “When COVID-19 goes away and our life can go back to the way it was, we know that our operations won’t all just go back exactly the way it was. We’ve learned too much, our dealers have learned too much, that we wouldn’t want to go back.

“Now, the question we always get is, will we ever run cars through the lane? Right now, we’re still listening to our clients every day and we know that there’s probably some segment of cars that will go back in to the lanes,” she said. “But we know that a lot of behaviors have also changed, as well, during this. I think dealers have figured out they can save a lot of time buying online and buying remotely. They can be at their store, doing retail business and continue to be ‘at the auction’ while at the retail store.”

Huang added: “As time goes on, people are finding new ways of working that are more efficient for them. And I think a lot of those habits will stay. Post-COVID-19, we know it’s still going to be a new day.

“Wherever we end up and whether some things go back to ‘the old way,’ I think it’s going to still be the exception, not the rule.”

On the retail side of the auto industry, the digitization of car sales is almost like a hybrid model, where certain elements still take place in person, based on consumer preferences.

To an extent, that may be the case in digital wholesale, an asset-heavy business where you quite literally have many moving parts that require physical maneuvering, storage and so forth.

“We always will have that physical car … in the post-COVID-19 world, Hopefully we’ll be welcoming a lot of our clients back inside our building,” Huang said. “And so, we will still have a lot of face-to-face interactions and the cars will physically still be at the locations. And we still physically do a lot of work to it through reconditioning.

“I tell the team, when I think about digital-first, it’s more of a paradigm shift — that nuance of today, the in-lane bidders are participating in an online sale; versus prior to COVID-19, the online bidders are participating in an in-lane sale,” she said.

“It’s that nuance of how to think about what takes the lead in your mind. And in the past, all of our auctions operated independently as physical locations. And we have found that in this increasingly digital world … where the car sits is less important to the buyer in the future. Because they just want the inventory,” Huang said.

“With that said, that location still plays an important role and that vehicle still has to sit somewhere. But buyers today, we can see, even now, on Simulcast, people are buying cars that are further (away) than what they used to buy.”

Buyers are no longer just going to one or two physical auction locations, she said.

“Now they can attend as many locations as they want in a given week,” Huang said. “So that notion of distance is increasingly disappearing in this digital realm.”

And that digital realm, or as Manheim has called it, a “digital first” strategy, will continue to be an emphasis for the company going forward.

“And when we say digital first, we’re not talking about necessarily just cars being sold online. But again, it’s about making sure that all of our tools and processes and that entire client experience is about this idea that cars will continue to transact digitally into the future. And making sure all the ways our systems have supported locations in the past will now support a digital-first mindset in the future,” Huang said.

“And look, I think we’re probably going to be in a recession as a country, as we get out of this and who knows how long it will be. But we also know that in a recession, it’s really when the auction industry shines. I know it’s counter-intuitive. But it’s really when our big partners need us, (and) we’ll be here, as Manheim and as an entire industry,” she said. “When we go through these transitions, that’s really when we shine. And I’m ready to be there alongside all of our partners, our clients and again show what the auction really is about through the tough times.”