Auto Remarketing has learned that the Cox Automotive Software Division will be led by Mark O’Neil, the longtime chief executive officer of Dealertrack Technologies.
O’Neil will report to Cox Automotive president Sandy Schwartz. O’Neil’s position will cover Dealertrack and the former Cox Automotive Software Division.
O’Neil joined the Dealertrack board of directors and became CEO and president in August 2001, according to his bio on the Cox Automotive website. Beginning in May 2005, his title became CEO.
In addition to experience in other industries, O’Neil’s background in the car business includes time as president of Pennsylvania-based dealer group Ertley MotorWorld in the late 1980s. He was also a co-founder of CarMax.
His auto background also includes time with auto sales website Greenlight.com, where he was president and chief operating office from June 2000 through January 2001. O’Neil is also currently a director at DealerTire.
This news follows a series of executive appointments amid Cox Automotive finalizing its purchase of Dealertrack earlier this month.
On Oct. 8, Cox Automotive appointed Brian Geitner as president of financial services and NextGear Capital.
Geitner, who was already president of NextGear, received these expanded duties as Patrick Brennan, who had been group vice president of finance services, became Cox Automotive’s senior vice president of operations and chief integration officer for the recent Dealertrack purchase.
Meanwhile, on Oct. 6, the company named Raj Sundaram chief client success officer. Sundaram had served as co-president at Dealertrack.
A couple weeks before the Dealertrack purchase was finalized, Cox Automotive announced that it brought the Kelley Blue Book and Autotrader properties under one leadership structure headed up by Jared Rowe, who is now president of Cox Automotive Media Division.
Staff Writer Nick Zulovich contributed to this story.
You never know who you might meet in the remarketing industry. You might be at an NAAA Convention, and end up talking baseball with Lou Piniella.
(Wonder if he will cheer for Cubs in the NLCS?)
Or, you might be at that same convention and catch a lively discussion between auction executives and political stalwarts/ D.C. power couple James Carville and Mary Matalin.
Speaking of politics, if you happened to be around Manheim Pennsylvania sometime in the 1960s, you may have run into a young man named Joe Biden, according to a Lancaster Online story.
Yup, that Joe Biden. Mr. Vice President.
As Lancaster Online reports, the then-University of Delaware student would earn a few extra dollars transporting cars from the Manheim, Pa. auction to dealers down in Delaware.
“They’d go up to buy these cars, and they’d pay (me) to go up to Manheim and get those cars down,” Biden is quoted in the story as saying at a 2008 campaign event. “I’d gather up a bunch of guys from my dorm, pay them five bucks and charge 10 bucks to the dealers. That’s how I made my spending money.”
I got the chance to visit Manheim Pennsylvania this summer, one of several of auction visits I’ve made to places like Florida, Arizona and just down the road from my hometown of Raleigh, N.C.
Who knows, maybe I have seen a future U.S. senator or vice president working on the lot?
Given the combination of ingenuity and work ethic I’ve witnessed in the auction lanes, it seems a great place to learn the foundation of business management — and that certainly can foster leadership, be it the corporate world or in the halls of Congress.
Selectbidder, a Canadian auto tech company best known for its auction-centric dealer trade networking platform for trade-in vehicles, launched its product in the United States market last month and officially announced its first American auction partner on Tuesday.
Eighteen-hundred miles away from Selectbidder’s Moncton, New Brunswick home is Melbourne, Fla.-based Space Coast Auto Auction, who will utilize the Selectbidder platform to orchestrate real-time bids for its network of dealers handling trade-ins.
How exactly does it work? To put it simply, the Selectbidder platform takes an auction’s already established network of dealers and connects those with recent or pending trade-ins to other dealers interested in buying them.
Joe Pritchett, Space Coast’s chief executive officer, explains his reaction to the solution, which was recently demonstrated for him at the 2015 NAAA Convention in Orlando, Fla.
“Once we saw how Selectbidder puts our auction into the trade-in process, I knew we needed to start using it,” Pritchett said. “With Selectbidder, our selling dealers are going to deal with us at the point of trade, allowing us to sell more cars straight from their lots. Our dealers and their customers are going to love how quickly and easily they get live offers on their Trade-ins. For our dealer buyers, it’s going to allow them to tap into fresher vehicles earlier in the remarketing process.”
Basing the system around what Selectbidder considers the “original dealer network” – the auction – the company aims to increase transparency for everyone involved, including the customer, who can see for themselves how much the dealer will receive for the trade-in vehicle at the next step in the sale cycle.
In a previous interview with Auto Remarketing, Selectbidder chief executive officer Sean Liptay said he hopes this is just the beginning of his tech-company’s growth in the U.S.
“The beauty of the product is that it can be up and running within a week in any location in North America, based around surrounding independent auctions,” Liptay said. “So it doesn’t matter if it’s the local auction in Florida versus the local auction in Louisiana, they can be up and running because they already have the relationship network built.”
Interested in reading more about Selectbidder and other companies making noise in the auction industry? Stay tuned for our Oct. 15 issue of Auto Remarketing, both in print and online, where we delve further into the topics of digital trends, tools and strategies for the wholesale market.
Editor Joe Overby contributed to the reporting for this story.
On Wednesday, the Twitter feed of the South Carolina Emergency Management Division was filled with retweets, photos and other messages informing Palmetto State residents of deceptively deep waters behind road barricades, curfews, water distribution centers and ways to help victims of the flooding that has devastated the Carolinas in recent days.
No doubt the devastation brought on by storms and record rainfall has left state agencies likes these and their federal counterparts — not to mention the business and residents of the Carolinas — with their hands full of challenges.
Property damage certainly would be one of those. And given the high-dollar assets on hands at dealerships and auto auctions, flooding and natural disasters can be particularly concerning for businesses in the used-car market.
In the town of Moncks Corner, S.C., Laura Taylor and the team at Charleston Auto Auction just finished a drainage project at their facility at the end of last year. So, thankfully, the auction was spared any damage.
“We probably would have lost everything … it definitely saved us,” Taylor told Auto Remarketing on Wednesday afternoon.
She and her team have spent the past three days calling in to check on customers. They make about 150 to 200 calls a day, and about every 10 calls, they will reach a customer who has experienced some of the disaster’s wrath, Taylor said.
She said Charleston still managed to have its sale Tuesday, but customers from Columbia, S.C., had to find alternate routes to the auction.
Taylor, who is the president of NAAA’s Southern Chapter, emailed fellow auctions in this area of the Southeast to check in on them. Their facilities didn’t experience damage, she said, but there were customers and employees who were impacted.
She is taking a group of her employees and dealers up to Columbia to help with the cleanup. There is also a link on the auction’s Facebook page where those interested can donate to the American Red Cross.
Elsewhere, Kyle Ohman, who is the market vice president for Manheim’s Southeast market said the company’s auctions in the region didn’t see any impact from the flooding. But the company has offered assistance to its customers in need, he said.
“During severe weather conditions, Manheim proactively plans and prepares to protect the safety of our employees, customers and locations,” Ohman said in a statement. “Fortunately, Manheim operations in the Carolinas were not affected by the recent flooding. However, as many of our customers were impacted, we will do what we can to help, such as offer available lot storage to those waiting for insurance claims to be completed.”
Up at ADESA, a spokesperson indicated that none of the company’s auctions were impacted by the storms, either.
But beyond property damage, one of the concerns for the auction industry, of course, is flooded vehicles.
Auto Remarketing asked Manheim’s Matt Arias, who is co-chair of NAAA’s Auction Standards Committee, what impact this particular batch of flooding will have on auctions in terms of vehicles being brought in with flood damage — and what can auctions do about it.
He said via email that the flooded vehicles are “going to be a big issue.”
Arias, who leads a class that actually delves into such topics, said he has already warned Manheim’s auctions about it while also giving them the basics on flooding and inspection tips. Arias mentioned that NAAA is doing the same with its member-auctions via email.
To learn more, visit the NAAA links Arias provided:
http://www.naaa.com/standards/Flood_Damage_Basics.pdf
http://www.naaa.com/pdfs/NAAA_Flood_Damage_Supplement.pdf
While Volkswagen’s TDI models carry a higher initial price tag and historically tend to hold their values longer than their gasoline-powered counterparts, it appears as though that price gap is closing as the seemingly perpetual flow of news involving the company’s diesel emissions scandal continues to circulate.
That certainly appears to be what's happening in the auction lanes, according to data provided by Kelley Blue Book.
Tim Fleming, analyst for KBB, explains.
“Early indications from auctions are that dealers are more hesitant to buy the VW diesel units, with sale prices falling 13 percent in the two weeks following VW’s announcement, compared to a 2-percent drop for the comparable gas-powered models,” Fleming said. “Used-car values typically decline at this time of year, but the large price drop on the VW diesels certainly stands out. The gas-powered units haven’t seen the same declines, but these units could take a bigger hit should the negative response toward VW extend beyond their diesel models. As it stands now, the price difference between the diesel and gas-powered VW model has fallen from around $2,700 to just $1,300.”
Looking at overall wholesale price changes (provided in the chart below) from Sept. 1, before the VW scandal’s announcement, to Oct. 2, about a month later, you’ll notice a marked difference between the normalized average auction sale price changes between gasoline and diesel variants of the affected VW and Audi models.
Diesel Models (MY 2009 – 2015)
| |
Pre-Announcement |
Post-Announcement |
Percent Change |
| Audi |
$16,075 |
$16,085 |
0.1% |
| A3 |
$16,075 |
$16,085 |
0.1% |
| Volkswagen |
$12,822 |
$11,146 |
-13.1% |
| Beetle |
$16,197 |
$13,852 |
-14.5% |
| Golf |
$13,551 |
$12,069 |
-10.9% |
| Jetta |
$11,901 |
$10,248 |
-13.9% |
| Passat |
$16,586 |
$15,253 |
-8.0% |
| Grand Total |
$12,830 |
$11,160 |
-13.0% |
Gasoline Models (MY 2009 – 2015)
| |
Pre-Announcement |
Post-Announcement |
Percent Change |
| Audi |
$21,842 |
$24,148 |
10.6% |
| A3 |
$21,842 |
$24,148 |
10.6% |
| Volkswagen |
$10,095 |
$9,873 |
-2.2% |
| Beetle |
$11,548 |
$11,102 |
-3.9% |
| Golf |
$12,628 |
$11,067 |
-12.4% |
| Jetta |
$9,573 |
$9,354 |
-2.3% |
| Passat |
$12,140 |
$11,815 |
-2.7% |
| Grand Total |
$10,184 |
$10,002 |
-1.8% |
Fleming specifically noted that the data on the diesel Audi A3, Beetle and Golf, as well as the gasoline A3, is fairly limited, so take those percent changes with a grain of salt.
The auction lanes weren’t the only area that VW has seen a recent hit in sales. To see how VW’s CPO sales faired by the end of last month, check out our story here.
Eric Ibara, KBB’s director of residual value consulting, believes that, if VW handles the situation correctly, it shouldn’t take too long for them to clean up their reputation and get their vehicles’ prices back on track.
“While early readings suggest that TDI vehicles are being affected by the news, it is possible that they could return to normal levels within a year,” Ibara said. “This will depend on how Volkswagen handles this crisis and what they announce the fix will be for the U.S. market.”
The National Auto Auction Association has elected its vice president for 2015-2016, finalizing its executive board for the term. Chosen for the position is Warren Clauss, who has been general manager at ADESA Buffalo since 1996.
Clauss, who was elected at the association’s convention last month, serves along president Mike Browning and president-elect Jerry Hinton.
He has been involved in NAAA executive leadership positions since 2004, most recently serving as a member of the association’s Legislative, Membership and Convention committees.
Clauss was president of what’s called the Eastern Chapter during the 2004-2005 term and was on NAAA’s board of directors from 2006 to 2008 and from 2013 to 2014.
He joined the auction industry in 1992 as controller at ADESA Buffalo, before moving up to the assistant general manager role in 1994 and the GM role in 1996.
DealersLink released the newest iteration of its live online auction platform, AuctionLink 1.4, on Tuesday, highlighting the solution’s features that culminate in what the company claims is the one of the “most convenient, efficient and easy to use” online auction platforms.
As listed by the company, the key features of AuctionLink include:
- Access to upstream vehicles that never go to traditional auctions
- No buy or sell fees ever
- Clean, low miles vehicles run first
- Condition reports on all units
- Reserve prices guaranteed below wholesale book
- Last second bids reset the clock for 10 seconds
- Automated preset bidding – set it and forget it
The company aims for the platform to appeal to those familiar with the features of traditional brick and mortar auctions.
“We pioneered the first dealer direct platform in 2005,” said Mike Goicoechea, DealersLink’s chief executive officer. “Now we are excited to host the most efficient and robust online auction platform.”
Available only to DealersLink members, AuctionLink runs on the DealersLink website every Tuesday afternoon.
There is a lot of buzz out there that many companies, including the auction giants with their subsidiaries, are looking at ways to “go around” auctions and lower prices to almost ludicrous value levels.
The true buzz should not be discussing “going around” today’s technologically enhanced auctions, but rather seeing them as the core around which mobile technologies branch out to create value in the remarketing of today’s diverse portfolios.
“Going around” technology is simple when you are selling “cookie-cutter” low-mileage off-lease or RAC units that are easily integrated into Auto Grade and other evaluation methods, but not as effective in remarketing today’s average 11-year-old on the road trade. And at some point when the volume of off-lease and RAC turn-ins goes viral, the “going around” methods lose the ability to handle short-term high volumes, and that is a key variable in the traditional brick-and-mortar auction process.
One thing that continually amazes me is that with all these competitive challenges we see, it’s assumed that their technologies are non-existent, at or superior to those currently being used by NAAA member auctions.
The hubris in that contention can clearly be discarded by some simple examples, even from a small independent auction like mine.
— All lanes 100 percent simulcasted.
— All vehicles have condition reports and multiple images and some have video presentations.
— Carfax and Mexico Ready information are tied into the fabric of the run lists to maximize the two items listed above.
— Everything is available on our websites and everything is scaled to any mobile device, including Simulcast.
So, the products that compete with us are just part of the fabric of who we are. And the niche products narrow the focus of the buyers as they assume that all buyers will go online to purchase every year, make, model and mileage vehicle, which is far from reality and thus narrows their bidder/buyer base.
What these companies are selling are low price, not great service or maximum value for the products they try to remarket.
What I enjoy and know is that my partnerships with companies like WTG and The Web Guys, has allowed us to create mobile tools both in our website and in our app that creates a seamless integration with our consigning partners and makes us multi-dimensional, and thus not a one-venue-focused remarketing company.
Better to be online and in-lane and widen the base of consigners exposure while you still avail yourself of fixed platforms like SmartAuction, then narrow your model to the narrowest possible exposure.
As I said, mobile + auctions = remarketing success. Mobile only = limited exposure and lowered returns, but I guess you get what you pay for.
Editor's Note: This column was written in April. Jim DesRochers is vice president at Dealers Auto Auction of the Southwest. As with any contributed content, the opinions expressed in this and other editorial columns are solely that of the author's and do not necessarily reflect those of Auto Remarketing or its parent company.
It wasn’t the first question Auto Remarketing asked Sandy Schwartz in a one-on-one phone interview Thursday afternoon, but it figures to be on the minds of many: What’s next for Cox Automotive?
“I’m trying to catch my breath. I want to get a nap this afternoon,” said Schwartz.
Given all the projects in which his company has its hands, who knows if there was even time for that.
It has been a whirlwind of activity for Cox Automotive and its president lately, with the company's purchase of Dealertrack Technologies finally becoming official on Thursday.
“I will tell you,” Schwartz said, “we have our hands full in a very positive way. One of the great things is, we’ve gotten to know Dealertrack even better and especially doing the things we’ve been allowed to do over the last few months; our values are the same, our culture’s the same and our mission’s the same. And we believe that we can help dealers — and OEMs — but help dealers be more efficient. And so there are so many things on our plate; we’re not out shopping for new things.
“Now, look, we’re going to look at every opportunity as it comes up. But just so you know, you can come on down to Atlanta and you won’t see a big whiteboard that says ‘Next thing, we go do this,’” he said. “Our focus is going to be on taking care of our clients, taking care of our team members and most importantly, doing integration in places where we need to do integration. And we have our work cut out for us, just like everyone else does.”
But keep this in mind, as Schwartz points out: “This is a fast-changing world.”
Given that, the company has to be prepared, ready to adapt and focused on its dealers.
“The world’s changing so fast out there, we want to make sure we’re ahead of the curve. We’re doing the design work we need to do, and that we can be very, very much needed by all of our dealers. And that’s where our focus is. We are dealer advocates. We are open-source advocates. Technology has changed the world; closed systems, I don’t think, pay dividends for anybody,” Schwartz added. “So we’re really committed to that … one of the great things that I tell our people — they don’t like hearing this, and it sounds even crass at times — but our dealers can fire us every day. And we have to produce for our dealers every single day.
“We have great relationships and great partnerships. And so we have to keep our eye on the ball.”
Chrome stipulation
In an announcement first released late on Tuesday (before the deal closed) Justice Department officials said Cox Automotive “must undertake various obligations to prevent Cox from using Dealertrack’s interest in Chrome Data Solutions LP, a company that compiles and licenses vehicle information data for use in inventory systems and other automated solutions and services for the automotive industry.”
As a Cox Automotive spokesperson noted, it is a “joint venture between Dealertrack and Autodata that provides vehicle information data utilized in the industry, including for inventory management applications.”
Auto Remarketing asked Schwartz what his understanding of this stipulation from DOJ means and how Cox planned on remaining compliant.
“It’s not only planning on it, we will be (compliant),” Schwartz said, later adding: “Chrome plays an important role for the industry, so we’re excited to have a part of the Cox Automotive family delivering this.
“We’re totally open, I think as much as anyone could be, for open integration among all of our combined solutions and other third-party providers and assuring the data is available for all customers. This isn’t about us getting data ourselves; we believe this is for the industry,” he continued. “So, we’ve put in place arrangements; the DOJ helped us facilitate data access for all the customers of Chrome, and allowing Chrome and Cox Automotive to deliver the value and the efficiency to everybody.
“But, I’ve got to tell you, we are a user of Chrome, also. So, in my mind … it sets some rules in place, but it really isn’t going to change the way we act,” he added.
Schwartz notes there is an inference that Cox would “want to use this to our advantage.” That is not the case, he says.
“This is a competitive world for everybody. And we’re all in this together. And so this data is shared by the industry, and I don’t see any changes in how that happens,” Schwartz noted.
‘Two growth companies coming together’
Auto Remarketing also posed this question to Schwartz: Beyond the much-talked-about inventory side, what other areas of the company might be impacted by bringing Dealertrack into the fold?
Schwartz began by giving the example of transportation/logistics. Both Cox and Dealertrack have solutions in that space.
“We have a transportation company in Ready (Auto Transport), and they have a transportation company. That’s one of our integration work streams. It’s not proposed because we think … we might have some services that overlap, so we’ll be able to cut some people. That’s not what this is about. These are two growth companies coming together,” he explained. “We want to come up with the absolute best transportation solution for OEMs, dealers and others who transport cars, so I think that that will be one that’s on the front burner.”
Looking forward
For those who may believe Cox Automotive is “taking competition out of the market,” as he put it, Schwartz points to something he learned during the DOJ process.
He found “there’s more competition out there than even I’d thought. There are people who haven’t even thought that they’re our competitors who are working in a garage and a month from now will be.
“Every single one of our products, every single service we offer, they’ve got competitive solutions out there,” Schwartz added. “So we have to be the best at every one of those. And our competitors do, too. We know that.”
Turning to the remarketing arena in particular, he continued: “Look, I think that every day we do a better job than our competitors in the remarketing area, but we don’t have 100-percent penetration. Not close to it. So we’ve got to be at the top of our game in each of these work streams we look at. The goal is, how do we make this product even better?”
Furthermore, Schwartz emphasized that it’s just not about the short-term, particularly given how the business is changing. The thought it is to be ready for the next two, five, even 10 years, he said.
While it may not be exactly clear what the auto market will look like a decade from now, Schwartz finds his company in a strong position.
“I think that today, with this deal,” he said, “we’ve ended up in a really good place to help the industry, and help our dealers going forward.”
Insurance Auto Auctions recently launched what the company dubbed the IAA Total Loss Solutions, a suite of products that executives highlighted can directly impact the opportunities to improve customer satisfaction and more effectively manage costs during the total loss claims process.
The first two product lines the company rolled out are IAA Inspection Services and IAA Title Services.
The company indicated IAA Inspection Services was developed to reduce the cycle time from date-of-loss to total loss determination. Three components are included:
— Enhanced images
— Condition report
— Appraisal
The company explained these offerings are designed to allow direct towing to the salvage auction, where high-resolution imagery can support virtual inspection of vehicles, resulting in faster cycle time and reduced claims cost.
Efficiencies within the inspection process can be further leveraged by IAA providing a pre-loss vehicle condition and option report, and a vehicle valuation to provide a comprehensive solution to the total loss claims process.
Executives highlighted IAA Title Services includes three components, too, all designed to suit the specific needs of the customer. The segment rundown includes:
—Title Procurement
—Title Solutions
—Title Direct
Title Procurement is geared to be a seamless offering that can be used by carriers to manage the document procurement process on all total loss claims.
Title Solutions can be utilized on those complex claims with unresolved title and document issues.
Title Direct is a service that can allow documents from multiple sources, typically the insured and lienholder, to be sent directly to an IAA branch, reducing cycle time and cost for the carrier.
“Our customers are consistently focused on providing the best possible experience for their insureds while increasing the efficiency of their claims process,” Insurance Auto Auctions chief executive officer and president John Kett said.
“The total loss claims process has become a more important success factor for our property and casualty carrier clients, as well as a primary influencer of customer satisfaction and retention,” Kett continued.
IAA senior vice president of business development Pat Walsh added, “These are the first products IAA is bringing to market within our Total Loss Solutions strategy.
“We completed extensive research on the total loss claims process and our results clearly indicate that opportunity exists to help our clients improve customer satisfaction and gain economic benefits,” Walsh went on to say.
