Just in time for March Madness, Manheim is launching a basketball-themed “Selling in the Zone” promotion.
In a deal that began Monday and goes through March 29, customers are offered five “key plays” to help them market cars better and boost both buyer confidence and conversion rates. Those “plays” are depicted with basketball-themed player cards. They include:
—Condition reports
—Remote seller
—Vehicle pricing
—Setting floors
—Seller-paid post-sale inspections
“We have seen an increase in dealer inventory this year, so our focus is to help customers sell their vehicles effectively,” said Stephen Smith, senior director of customer marketing at Manheim. “As part of this promotion, we share best practices on how to help dealers increase buyer interest and confidence.
“It’s important that we make sure dealers know the right strategies to sell their vehicles. For instance, we know that vehicles with condition reports are three times more likely to be sold at auction than vehicles without CRs,” he added.
Beyond the selling tips, the promotion also includes daily prizes and a grand-prize drawing.
Dealers are encouraged to visit www.manheimzone.com, which includes tips on how to list vehicles more efficiently, utilize CRs and PSIs effectively and additional details on starting bids and other pricing techniques.
Dealers can collect all five cards on that site and enter to win one of the $100 daily prizes and register for the grand prize drawing. Each of the top three customers on the leaderboard at the end of the promotion will win a $1,000 prize.
Dealers buying cars via OVE.com can put in for the daily drawing of a team jersey. Customers who buy 15 or more vehicles consigned by Avis Early Access or US Bank Upstream during the final two weeks of the campaign will receive a big-screen TV.
Manheim Ohio will host its monthly highline auction on Tuesday, featuring consigned vehicles from Jaguar Land Rover for the first time ever.
Branded as “The Highline Collection, Powered by Manheim,” the auction will feature the largest selection of luxury vehicles in the Midwest, according to the company. Showcasing high-value luxury vehicles, the highline event is held once a month during Manheim Ohio’s weekly sale on Tuesdays beginning at 9:30 a.m.
“We’re thrilled to add Land Rover and Jaguar, and rebrand our highline sale, The Highline Collection, Powered by Manheim,” said John Deck, the auction’s general manager. “Our customers count on Manheim Ohio to provide a wide variety of highline vehicles to our normal sales that feature thousands of vehicles.’
The auction event is expecting to feature more than 3,500 vehicles from 50 different brands on Tuesday, including over 100 vehicles in The Highline Collection, Powered by Manheim sale.
In previous Manheim news, Manheim partnered with Make-A-Wish Utah to bring a teen’s wish to fruition. Cameron, a 16-year-old with cancer, told his local Make-A-Wish foundation that his dream was to have his 1986 Chevrolet El Camino refurbished. His wish came true on Feb. 19 when the car was unveiled to him, with the help of Griffin’s Golden Glow and Manheim.
A special presentation was made by Jared Perry, the chief executive officer of Make-A-Wish Utah at Manheim Auto Auction. Cameron was originally under the impression that he was going to the auction to see classic automobiles, with no prior knowledge that his wish was granted. The El Camino was painted green, a color Cameron chose that represents his particular type of cancer.
For more information about Make-A-Wish Utah, visit its website.
During his company’s latest earnings conference call, Jim Hallett said he didn’t have any acquisition news to share, but the KAR Auction Services chief executive officer did hint at what may be in the pipeline.
“So, with that I have nothing to announce today, but I would say that over the coming months you should look for some announcements in the areas of technology acquisitions and brick-and-mortar acquisitions,” Hallett said, according to a transcript of the call posted to the company’s website.
Hallett had been going through the various KAR business units in his opening remarks, eventually touching on the acquisition forefront. In explaining the company’s approach, he honed in on two areas, and in doing so, underscored the emphasis KAR puts on both the in-lane and online.
“In terms of the acquisition pipeline, there's really two areas that I would suggest you focus on, and one is, we are very focused on acquisitions that will involve technology that can be used by our sellers and by our buyers,” Hallett said.
“And then secondly, I would say we're still interested in expanding our footprint through brick-and-mortar. There's no question that dealers and sellers become more and more focused on the use of technology,” he continued. “And we not only want to be able to enhance our technology and grow our technology and acquire new technologies to support our dealers and our sellers, but we also feel there's an opportunity to expand our footprint in brick-and-mortar, as well.
“When you think about brick-and-mortar, you should not just think about the physical cars and ancillary services that we get, but you should think about creating the buyer base and expanding the buyer base in new markets which not only contributes to physical, but certainly supports our online selling as well.”
For more insight on both the online and the in-lane metrics at KAR, consider the fourth-quarter numbers from the ADESA business unit that Hallett shared during the call.
Volumes at the physical auction climbed 7 percent in Q4, with revenue per unit increasing to $700. Within the online business, volume was up 17 percent with revenue per unit up to $106.
“So, there’s no question that the increased supply has been a positive outcome for both our physical auctions and for our online auctions, as well,” Hallett said.
Chief financial officer Eric Loughmiller expanded on some of this when addressing a question during the Q&A portion of the call. An analyst wondered if online-only would outpace physical volumes this year or even next.
“While there’ll be growth in online-only as more cars come to market, again we have believed that they will get to physical auction, because there’s not more demand in the online-only venue than what can be met as that market reaches back to its stable levels because it’s a limited number of days that it’s in that venue,” Loughmiller said.
Hallett pointed out how these cars are typically priced at the top of the funnel.
“They normally get priced at a premium,” he said. “And sometimes when you have that much volume coming, the franchise dealer is now taking a look, do I buy this thing at the top of the funnel or do I let it work its way to the physical auction where I might be able to buy the car for considerably less?”
The KAR executives explained it like this: when there’s an abundance of cars, dealers are confident some will make it through the funnel, where they can likely pay less for them. But when supply is tight, the dealers will snatch the car up instead of waiting, because it may not be waiting for them on the other side of that funnel.
“When you have that oversupply … and I go back to my dealer days … you can be more selective,” Hallett said. “The other thing that plays into it a little bit is when the dealer is buying the car at the physical auction, he’s buying the car now fully reconditioned and not having to spend a number of days to turn that car to get it to the front line, and he basically can buy the car and put the car on his lot for sale that same day.
“So there are advantages when you have the oversupply to waiting to buy the car at the physical auction that don’t necessarily happen when you have a tight supply like we saw in ’11 and ’12,” he added.
As Dealers Auto Auction of Oklahoma City celebrated Mardi Gras in February, staff members at Flint Auto Auction — who are no strangers to snow and cold temperatures, being located in Michigan — successfully tackled the latest winter event that impacted much of the U.S.
When Mother Nature drops a lots of snow all at once, ServNet auctions understand that the situation presents a special challenge to prepare for sale day. And Flint AA auction has seen its share of the snow and ice during this year’s winter.
When everyone arrived for work on Feb. 2, Flint AA recapped that the staff had to switch to “special operations” mode in order to clear more than a foot of snow that fell less than 12 hours earlier in order to get the lot — and 1,900 vehicles — ready for the sale just two days later.
"We had expected some snow over the weekend, but we got a lot more than we bargained for,” Flint Auto Auction operations manager Robert Tebo said. “When we got to work on Monday morning, we all put on our snow gear and headed out to the lot to uncover the cars and shovel the snow.”
Tebo highlighted that everyone with an arm and a snow jacket went out to help in the snow removal effort. Owners John Luce and Bill Williams, general manager Lawrence Cubitt and assistant GM Greg Price were joined by members of the office staff, lot operations and the shops to move tons of snow.
“If you live in snow country, you know what a huge job it is to clear the lot,” Tebo said. "You have to push the snow off each of the cars, then move the snow from each of the lanes, moving cars in and out of position in order to clear each lane and make way for the huge gravel trucks that come to take the snow away.
“It’s exhausting work, but we all pulled together and got the job done, and had everything ready to go for the sale on Wednesday morning,” he continued.
Cubitt reported the sale on Feb. 4 was an excellent one, in spite of the fact that consignment was affected due to the weekend storm’s impact on transportation. Dealers from throughout the region braved the elements to attend the sale. By day’s end, the auction reported that 976 vehicles had sold out of a total of 1,935.
“We’re grateful to everyone who pitched in to help us dig out and get all those cars ready to cross the block,” Cubitt said. “We’ve got an amazing team here at Flint Auto Auction, whose dedication is clear even in the most challenging of times.”
DAA/OKC Brings Mardis Gras to the Auction
There’s nothing quite like a Mardi Gras celebration, and Dealers Auto Auction of Oklahoma City (DAA/OKC) brought a festive flair to the auction lanes this past Thursday.
Combining the sights, sounds and tastes of Mardi Gras with the season’s best selection of cars, trucks and SUVs crossing the auction block, DAA/OKC welcomed customers from far and wide to join the staff for the celebration, which combined two auction events on the same day.
The celebration started bright and early at 8:30 a.m. with a sale that included more than 1,000 vehicles. Featured consignors included Ally Financial, ARI, Automotive Solutions, Avis Budget Group, BF Remarketing, Enterprise, FW Remarketing, Hertz, Hertz Carco, RSA, Santander, The Key Financial and Thrifty Car Rental.
The auction also had enthusiastic participation by dealerships throughout the region, including Bob Moore Auto Group, David Stanley Auto Group, Group 1 Automotive, Jaguar Volvo of OKC, Littleton Motor Co., Mercedes-Benz/Jaguar of OKC and Reynolds Auto Group.
DAA/OKC said that no Mardi Gras event would be complete without great food, and there was lots of it.
Customers enjoyed Cajun-style cuisine topped off by three King Cakes. Adding to the fun, several consignors held prize drawings in their lanes, including
— Avis Budget Group for a restaurant card
— FW Remarketing for Redhawks Tickets
— Key Financial for a Visa gift card.
In addition, Littleton Motor Co. drew for $100 after every fifth vehicle sold.
At the end of the sale, all buyers qualified for drawings for six $100 gift cards to the area’s own taste of New Orleans: The Bourbon Street Café in Oklahoma City’s Bricktown.
With a Mardi Gras celebration in full swing, management said one sale is never enough. So DAA/OKC conducted its second sale of the day starting at 12:30 p.m. The session was a GM open sale event, which included more than 400 units.
Leading up to the Mardis Gras celebration, DAA/OKC opened its doors to the public, holding a GSA sale on Feb. 12. The auction also hosted two closed GM factory sales this month on Feb. 3 and Feb. 17.
More than 500 vehicles crossed the block at each of the closed sales, and drawings were held for four $50 Outback Gift Cards to complete the days' activities.
XLerate Group — which rebranded itself from American Auto Auction Group during last fall’s Used Car Week — brought on a new chief financial officer on Monday.
Joining XLerate after holding posts at organizations such as Auction Broadcasting Co. is Tom Schuler, who now is CFO for the dealer-centric auctions with physical and satellite sale operations in California, Texas, Florida, South Carolina, Mississippi and Wisconsin.
“We are very excited to have Tom Schuler join our team as CFO,” XLerate chief executive officer Cam Hitchcock said. “Tom has 15 years’ experience as a financial executive for both publicly traded and privately-held companies.
“His extensive experience with corporate finance and strategic acquisitions will be extremely helpful as we look to expand XLerate in the coming years,” Hitchcock continued.
“Tom and his financial team will work closely with senior management and the auctions to build on the continued success of the organization,” Hitchcock went on to say.
Prior to joining XLerate, Schuler held CFO positions at Wright Implement, Diversified Vehicle Services, Auction Broadcasting Co. and Braun Consulting.
“I am fortunate to be joining XLerate at this time as the company has an outstanding senior leadership team in place, a strong financial foundation and a group of auctions that are widely recognized for superior customer service,” Schuler said.
“These ingredients will allow us to continue to provide the highest level of service to our customers as we grow the business,” he added.
Against comparable weeks of 2014, overall auction volume was up 10.7 percent in January, according to the latest Economic Dashboard compiled by NAAA economist Ira Silver.
And when drilling down into the group of vehicles up to eight years old — whose volumes were up 8 percent year-over-year on a like-age basis, according to NADA Used Car Guide — there’s an interesting segment trend that surfaces.
In its latest Guidelines report, NADA said much of that increase was due to spiking volumes of 1-year-old vehicles, most of which were off-rental cars.
In fact, auction volume of 1-year-old vehicles (2014 model-year vehicles) in January was roughly 23 percent higher than the number of 1-year-old cars (so, 2013 model-year) in the same month last year.
“The group’s total volume of 71,000 was also the highest among its model year peers,” NADA Used Car Guide’s Jonathan Banks added in the report.
As part of the Ford Auction Service Award Program, facilities operated by ADESA, Brasher’s and Manheim all recently earned accolades from Blue Oval remarketing officials.
Manheim collected the most honors as operating locations in Chicago, Manheim, Pa., New York and St. Louis were selected as recipients of a 2014 Ford Auction Recognition Award. As part of the Ford Auction Service Award Program, these locations were honored for their performance against key service level criteria.
Additionally, Manheim Pittsburgh won the Ford ASAP Second Half Sprint Closed Sale Award, and Manheim Mississippi claimed the Ford ASAP Second Half Sprint Open Sale Award as the auctions with the greatest improvement in the second half versus the first half of 2014 in their categories.
“We are extremely happy to see these six locations honored for their great accomplishments in 2014,” said Rich Coutu, vice president of commercial sales for Manheim. “Ford has asked our auctions to deliver results, and these auctions have shown what a great partnership Manheim and Ford have. Our company values this partnership with Ford, and we appreciate this terrific recognition.”
Ford recognized winners in four groups: GT, Mach 1, Cobra and Boss. In the Mach 1 category, Manheim auctions were selected as winners in both the closed and open sale categories.
Other honorees included:
— GT Group: Closed sale winner was ADESA Buffalo.
— Cobra Group: Open sale winner was Brasher’s Sacramento.
— Boss Group: Open and closed sale winner was Brasher’s Salt Lake.
Meanwhile, Manheim Chicago and Manheim Pennsylvania were selected best for open and closed sales, respectively, in the Mach 1 group, a grouping of the highest-volume auctions. Manheim St. Louis earned the award for best in the open-sale GT group, while Manheim New York took first place in closed-sale Cobra group. Both the GT and Cobra groups are smaller-volume auction groups than the Mach 1 group.
Ever wonder how an auction views the CFPB guidelines for its consigning partners? It’s simple: government regulations need to be followed, and auctions need to comply to insure both its partners and the consumers it represents have adequate protections.
However, let’s also not assume that the auctions should be dictated to on how to run their businesses nor have specific recommendations passed down under the guise of a white paper. Auctions have a long history of both serving their customers and their communities and following all city, state and federal guidelines that apply to its businesses, and its employees, and should not let the CFPB — under the guise of consumer protections — insert themselves into that process.
As consumers, all of us believe our personal information should be secure, and as business people we create the safeguards, both internal with our staffs and external with our software firewalls, to insure this process occurs. As a result, giving away our privacy rights in blanket contracts related to audits and record keeping beyond the scope of specific repossession customer information complaints, shows disrespect for the incredible job that this industry does for our consigning partners.
What I recommend is that our industry associations, such as IARA and NAAA, along with others related to the finance industry, take a unified and proactive stance toward Congress through our PAC’s (political action committees) or other avenues, to show this industry in a positive light and to make it clear that we will support the rights of all consumers that we are engaged with — without violating any of the rights inherent to our own businesses and that of our own employees.
It’s time for partnerships and driving respect for our industry and its value to this country, and it is also time that our partners realize these controls to help them run their businesses have costs that need to be addressed and are not just a series of rules that need to be complied with and do not reflect that side of the issue.
Jim DesRochers is vice president at Dealers Auto Auction of the Southwest.
Editor’s Note: 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.
Insurance Auto Auctions made its third growth move in the past two months; this time expanding its services at a pair of Ohio facilities.
To respond to the demands of the winter season, IAA expanded its Buckeye State branches in Columbus and Cleveland.
The Cleveland branch, located on 7437 Deer Trail Lane in Lorain, Ohio, has added 9.5 acres as an overflow site. It is scheduled to open on Sunday. IAA has also increased its capacity to service the Columbus area, opening 420 Stimmel Road as an expansion of the existing branch.
"Our goal is to provide the best service to our customers,” IAA chief executive officer and president John Kett said. “The increased capacity in our facilities provides us the ability to serve our customers more quickly and efficiently, particularly during these difficult winter months.”
The newest announcement comes on the heels of Insurance Auto Auctions broadening its footprint into Iowa and Oklahoma as well as reopening of facilities in Rhode Island and Pennsylvania.
Officials pointed out preview and auction times vary for each of IAA’s facilities. For more information on the two newest expansions, call the IAA Columbus branch at (614) 875-7484 or the Cleveland branch at (877) 917-6877, or go to IAA's branch information page at www.iaai.com.
Perhaps spending more than 30 minutes talking about how potential losses in new-vehicle lease business were going to hurt the company’s performance provided the kindling that was lit when an investment analyst asked Ally Financial chief executive officer Michael Carpenter if he would sell off SmartAuction to General Motors or another potential buyer of the wholesale service provider.
Carpenter fervently brushed off the inkling that SmartAuction would be owned by anyone other than Ally when the company conducted its quarterly conference call to report fourth-quarter and full-year results.
At the beginning of the session, Ally explained how the company managed to generate a total originations figure ($41 billion) that came in as the highest level since 2007. And Ally leaders mentioned how the company achieved that figure even as General Motors enhanced its relationship with GM Financial and Fiat-Chrysler shifted its captive finance company allegiance to Chrysler Capital.
Still, Eric Beardsley of Goldman Sachs asked Carpenter near the end of the conference call that could softening lease originations prompt Ally to liquidate SmartAuction to GM or another company.
“Absolutely not. It is a huge competitive advantage,” Carpenter said according to the transcript of the call posted by SeekingAlpha.com.
“We have probably a $500 per car advantage for us as a non-physical auction. And so on even-up basis in the leasing business, we are a substantially cost advantage,” he continued. “We have the superior information advantage because we really know what the hell is going on in used market. We don't just use ALG data like everybody else does.
“We have a very good system for tracking supply demand of the level of individual vehicles that enables us to manage risks in times better. It's a huge strategic asset in the leasing business,” Carpenter went on to say.
Carpenter closed his response to Beardsley’s question by touching on off-lease volume sent down the lanes by U.S. Bancorp.
“What did U.S. Bancorp used to do with their off-lease vehicles? Answer, they came to our auction,” Carpenter said. “So that’s a huge competitive advantage in the business, and I would never dream of selling it to GM or anybody else for that matter.”
According to the latest information from the National Auto Auction Association, online-only sales — which SmartAuction operates — has grown steadily between 2009 and 2013, climbing from a market-share level of 2.7 percent to 4.7 percent during that span.
