Black Book editorial director Ricky Beggs used his weekly online video report to share a recent conversation he conducted with leadership of the International Automobile Remarketers Alliance.
Along with sharing background about their professional careers, IARA president Levi McCoy of LeasePlan and alliance executive director Tony Long discussed a wide array of wholesale market issues. McCoy touched on how both he and Long came into their alliance roles last fall.
“One of the things that was challenging with Tony and I coming in at about the same time was keeping continuity going, keeping our name and brand out there in the industry,” McCoy told Beggs. “I think Tony and I have done a pretty good job with that. We consult often on current issues, things that we need to be involved with.”
With about 18 months left as IARA president, McCoy is looking to build on the alliance’s expanding member base.
“Certainly I would like to make sure our membership stays strong and even grow. We’d like to see more members and to be the first one thought of when there are discussions about the industry,” McCoy said.
Meanwhile, Long emphasized the value of IARA’s Summer Roundtable, an event set for Aug. 19 and Aug. 20 in Chicago.
“We refer to it as kind of boutique-type meeting because it’s just us,” Long said. “We’re not competing with any other entities, and we basically have full control of the schedule. There’s no fluff. It’s just content. Working with Scott Kolb who is the chair of our education committee, Scott and his committee are putting together a bang-up agenda that’s really going to be informative.”
And like McCoy, Long stressed that broadening IARA’s member base is always a priority.
“We’ve enjoyed some growth, particularly in our consignor base, manufacturers and financial institutions,” Long said. “If you want to be around the decision makers, the folks who are guiding this consignment where it’s going into these different channels, you need to be a part of that discussion.”
The complete session Beggs had with McCoy and Long can be viewed through the video available at the top of this webpage.
Black Book Analysis on Wholesale Trending
On the pricing end of the wholesale market, this past week was an interesting divide between car and truck segments, which were moving in opposite directions. Overall, the market seems to be approaching some stability.
In a bit of analysis provided exclusively to Auto Remarketing on Monday, Beggs discussed these changes in more detail.
See our story here for the complete report.
DAA Northwest recently teamed up with fellow independent operation Norwalk Auto Auction as well as ADESA and Manheim in support of Toyota Financial Services’ Boys & Girls Clubs fundraising drive.
Together with DAA Northwest and additional auction contributors, TFS presented a check for $500,000 to 35 Boys & Girls Clubs during the March 17 diplomas 2 Degrees (d2D) event.
“We’re honored to support TFS in this effort,” DAA president Bob McConkey said. “These funds will have a direct, positive impact on young people who might otherwise lose hope and drop out of school.”
Toyota’s recent contribution surpasses last year’s and provides funding for 19 additional new Clubs.
With an emphasis on reducing the national high school dropout rate, Boys & Girls Clubs provide youth with the academic, behavioral and social skills needed to graduate. In a recent survey conducted at local clubs, 28 percent of club alumni said they would have dropped out without the club’s influence.
Toyota Financial Services collaborates with The Darden Restaurants Foundation to support d2D, a college-readiness program. The $500,000 raised will help fund d2D as it offers support for club operations, and increases each club’s ability to serve more youth.
DAA Northwest offers TFS consignment in the lanes and online via EDGE Simulcast and Toyota Financial Services’ weekend events.
Indiana Auto Auction’s Anniversary Sale
Indiana Auto Auction and its customers are looking forward to a race-themed anniversary sale on Thursday. More than 900 units are expected with 200 franchised dealer trades and 200 repo units running in the auction’s eight lanes.
The day will start with free breakfast for all of the dealers in attendance and conclude with a contest where three lucky dealers will have a chance to win $100,000.
“If they avoid the crash, they win the cash,” said Eric Autenrieth, owner and general manager of Indiana Auto Auction, explaining that dealers choose from envelopes containing photos of either a green flag or a car crash as they try to advance to the grand prize.
“We have had a couple of dealers get really close to the big money, and everyone hopes they’ll be the big winner this year,” Autenrieth continued. “Even if they do crash, they still receive $500 for every green flag they draw.”
Carolina Auto Auction Celebrates 24 Years
Carolina Auto Auction celebrated its past success with even more success at its 24th anniversary sale on April 9. One of the Southeast’s largest independent auto auctions gave away $55,000 in cash and prizes, including $24,000 in cash to Brad Savage of Savage Motors. Other giveaways included a lawn care package, a grill and patio furniture package, and a boating and fishing package.
More than 800 dealers were in attendance as 1,400 vehicles ran through the eight lanes at CAA. All dealers received a complimentary breakfast and all lanes floated.
Carolina also welcomed a new fleet lease company to its lanes as Honda and Acura Remarketing ran 150 vehicles in an introductory sale to Carolina’s dealers. The auction hosted a special preview party for Honda and Acura vehicles the night before the big sales event.
As part of the festivities, Billy Wall from Best Kia was the auction’s Dealer of the Week. Wall won $300, a free buyer protection plan warranty and a free full detail playing the weekly Dealer of the Week game.
Auction management highlighted many of the floor plan companies gave away great prizes.
AFC sponsored a large 24th anniversary cake for the auction and its dealers. The company also offered a 60 days for $60 promotion, and gave away two Sportsman camo coolers.
Auto Use gave away a free Coleman camping grill and chair, and CarBucks gave away four wireless headsets.
The next big sale for Carolina AA is scheduled for April 30 when the auction hosts its Classic Car Sale & Show, as well as its quarterly Toys for Big Boys sale.
By meeting or exceeding remarketing performance goals, eight auto auctions nationwide have earned this year’s Top Auction Awards presented by Donlen.
The company made the award announcement on Tuesday. Each year, the company recognizes top auto auction partners that work closely with the company in its remarketing program.
“The partnership we form with auction partners is a vital component of our remarketing program and its success,” said Dan Powers, Donlen director of vehicle remarketing.
“By consistently meeting, and in many cases exceeding our performance goals, this year’s auction partners have demonstrated their commitment to our customers and to Donlen’s world-class remarketing program,” he said.
This year’s award recipients are:
Auction of the Year: Carolina Auto Auction
Central/Northeast Region: Manheim Milwaukee
South/Southeast Region: ABC Orlando
West Region: Brasher’s Portland Auto Auction
Best Days to Condition Report: ABC Detroit/Toledo
Best Days to Sell: ADESA Austin
Best Expense Control: ABC Bowling Green
Best Retention Dollars: ADESA Golden Gate
As part of its ongoing commitment to deliver the type of auction experience customers expect, Manheim bolstered its support team on Monday with a pair of executives.
Manheim named Tony Drummond as vice president of customer experience and Jim Williams as vice president of operations support. Both executives will report to Ashish Bisaria, senior vice president of customer experience.
“Tony and Jim are both true testaments to Manheim’s goal to put the right leaders in place to drive business growth and expand our customer base,” Bisaria said. “These dynamic leaders will use their expertise and experiences to deliver solutions to help our customers succeed. Our customers will benefit from the leadership and insights of Tony and Jim.”
Drummond joined Manheim on Feb. 17 after serving as an associate partner with IBM’s global business services group since 2011. Drummond’s background includes the many aspects and complexities of customer experience and integrated marketing, including CRM strategy definition, business process reengineering, technology integration and the end-to-end customer engagement lifecycle.
Drummond joined IBM in 2001 and held a variety of roles.
During his career, Drummond created solutions that incorporate all customer information from analytics and data to social, mobile and digital interface with customers. He worked with many organizations to define the “voice of the customer” and translate this into business and organizational strategy to drive new and incremental revenue.
“Tony has a core capability and process strategy for establishing insights through customer data and analytics, and then translating that into business process change,” Bisaria said. “Tony believes that the foundational building blocks of customer value are data, process and CRM tools that bring the insights to life.”
Williams, who joined Manheim on Feb. 24, was responsible for strategic development with premium retail services in his previous role.
Prior to joining premium retail services, Williams served in a variety of roles at Best Buy, including senior director of sales and operations and vice president of sales development.
At Best Buy, Williams’ operational and sales responsibility included four key businesses: computing, digital imaging, MP3 and services which accounted for $20 billion in revenue during the time he managed it. The primary goal of this function was to develop operational strategies to improve customer experience while driving out cost and optimizing operations.
Before joining the sales development team at Best Buy, Williams was responsible for the Eastern half of Best Buy’s Geek Squad services business where he led an organization of more than 10,000 people.
“Jim is an innovator with the courage and conviction to constantly improve, and he does this in a way that adds value to the business, “Bisaria said. “He has deep experience with building customer relationships and implementing strategies.”
Manheim Detroit to Host Arbor Day Clean Up
In an effort to clean up and preserve the environment around Manheim Detroit, a group of more than 100 employees from the Carlton, Mich., operating location will take part in an Arbor Day cleanup event on Friday from 2 to 5 p.m.
The company highlighted The group will volunteer to collect trash and debris on the grounds of 200-acre Manheim Detroit property, as well as along the property’s fence lines and in the adjacent wetland and farm field areas near the auction, which is located at 600 Will Carlton Road.
“It is always exciting when employees want to do their part to make a difference in the community,” Manheim Detroit general manager JD Daniels said.
An eight-member conservation committee, which includes members from several auction departments, is planning more events for later this year, including a second cleanup of the Civil War cemetery on the grounds of Manheim Detroit and a flower-planting event in May. Employees held a clean-up day at the cemetery last summer.
While Daniels hopes this volunteer event will help his employees build their community spirit, he hopes they have fun as well.
“We have a lot of fence line area to cover here, so we can really have an effect on keeping our community clean,” Daniels said. “Our employees will not only help preserve our environment, but they will have some fun in the process. We will have a friendly competition to see which department can collect the most trash, with the winning team collecting prizes.”
In addition to this conservation effort, Manheim Detroit added energy-efficient lightning throughout its facility last year and plans to add more energy-efficient solutions later this year.
U.S. House Member Coming to Manheim Riverside
U.S. Rep. Mark Takano announced that Manheim Riverside will be the 100th business for his “100 Business” tour, which began last year.
Takano, a California Democrat whose district includes Riverside, Calif., will tour the facility on Tuesday and meet with Scott Hurst, market vice president for Manheim’s southern California market, Christopher Brown, general manager for Manheim Riverside and Karyn Wrye, senior director of Manheim’s government affairs.
“I am proud to announce that Manheim Riverside will be the 100th business that I will visit for my ‘100 Businesses’ tour,” Takano said. “The Inland Empire has been hit particularly hard during The Great Recession, with the unemployment rate peaking at 15% and one in every fourteen homes in the region being foreclosed on. With that said, fixing our local economy is a top priority of mine. This tour allowed me to talk directly with the business owners and their employees and learn what Congress can do to accelerate the recovery.”
“Manheim Riverside is honored and excited to be the 100th Business that Congressman Mark Takano visits, as he completes his ‘100 Business’ tour,” Hurst said. “With our auction operation and our newly-opened service center, we are extremely proud to contribute to the growth of our industry, our local economy and our community.”
Following the success of its 13th Anniversary Sale last month — where a 2014 Nissan Versa was awarded — Dealers Auto Auction of Idaho will be conducting another giveaway at the end of this month.
The auction said it will be giving away a 2014 Mitsubishi Mirage that it purchased from Bronco Motors Mitsubishi at April’s end. Anyone who buys or sells a promotional vehicle this month is entered into the drawing.
The auction is giving out five keys at each week’s sale. The person whose key starts the prize Mirage at the end of the month takes the car.
This follow the auction’s anniversary sale last month, where it gave away a Versa to independent dealer Sandy Beach, owner of Champion Motors in Nampa, Idaho. That sale featured consignment from Westlake Financial, ARI, SRG, Emkay, United Auto Credit, Lobel Financial and others.
Barrett-Jackson posted the strongest sales results in the history of its auctions in Palm Beach, Fla., this past weekend.
Officials highlighted that Ford and General Motors partnered with Barrett-Jackson to bring unique vehicles to the auction. Barrett-Jackson chairman and chief executive officer Craig Jackson noted on Monday that consignments reached a new high, the caliber of vehicles in South Florida was unprecedented and the average price per car grew significantly.
In addition, Jackson mentioned the benefit to national and local charitable organizations was significant.
“Each year, Palm Beach continues to expand its impact, bringing better cars, more fans and growth. We have enjoyed the years here and this year was a stellar showing, which continues the explosive start we had in Scottsdale,” Jackson said
“This week, we had great entertainment, saw some incredible cars and sold seven special vehicles with all proceeds benefitting the designated charities. We have a strong partnership with Palm Beach and the South Florida Fairgrounds and this week demonstrated that relationship,” he went on to say.
For charity, the company determined more than $2.35 million was raised over the three-day auction.
Ford sold the 2013 Ford Mustang Fastback, which appeared in “Need for Speed,” for $300,000.
GM sold the first retail production vehicles of the 2015 Chevrolet Camaro Z/28 2 Door Coupe for $500,000 and the 2015 Chevrolet Corvette Z06 2 Door Coupe for $1 million.
The charities that benefited from these sales included:
— Rebuilding Together
— The Darrell Gwynn Foundation
— AARP Drive to End Hunger
— Henry Ford Health System
— Karmanos Cancer Institute
— The Cancer Research Fund at TGEN
— Boy Scouts of America Occoneechee Council
“The cars we saw in Palm Beach were unlike any previous year. These cars we are now seeing are truly unique,” Barrett-Jackson president Steve Davis said.
“Through the years, coming to the Fairgrounds, we have seen glimpses of how Palm Beach would grow and evolve. This auction weekend was another example of this special market,” Davis continued.
The opening night gala featured Soul Survivors, with a special appearance by pop sensation, Rob Van Winkle, formerly known as “Vanilla Ice,” who rocked the night and jump-started the auction weekend for the VIPs, media, celebrities and other attendees.
Here are some of the notable bids over the three-day auction. For additional information on these and other vehicles visit the Palm Beach 2014 Car List at www.barrett-jackson.com.
1. Lot No. 3004 – 2015 Chevrolet Corvette Z06 2 Door Coupe: $1 million
2. Lot No. 3002 – 2015 Chevrolet Camaro Z28 2 Door Coupe: $500,000
3. Lot No. 456 – 1935 Packard 1207 V12 Convertible Coupe: $330,000
4. Lot No. 3003 – 2013 Ford Mustang Fastback from Need For Speed: $300,000
5. Lot No. 451 – 2005 Ford GT 2 Door Coupe: $242,000
6. Lot No. 468 – 1946 Ford Sportsman Convertible: $209,000
7. Lot No. 3005 – 1979 Oldsmobile Cutlass Hurst Coupe: $200,000
8. Lot No. 3001 – 1969 Oldsmobile 442 Convertible: $200,000
9. Lot No. 450 – 2010 Lamborghini Gallardo LP560-4 Spyder: $181,500
10. Lot No. 428 – 1968 Shelby GT500 Convertible: $165,000
“Palm Beach 2014 set a new standard and opens a new chapter for Barrett-Jackson, raising the bar on what Barrett-Jackson consignors can expect, which resulted in a great auction weekend for attendees, bidders and consignors,” company officials said.
For more information about Barrett-Jackson, visit www.barrett-jackson.com or call (480) 421-6694.
Greater Milwaukee Auto Auction announced recently that the auction has rolled out a new reconditioning facility.
The on-site recon facility includes three long wash lanes, a five-car service department, a full body shop, auto upholstery services and corporate offices for its fleet consignors.
The auction has now expanded to 35.5 acres.
“We have separate fleet check-in lanes designated for condition report writing, that lead right into our new recon building,” said auction president Kristie Griffin.
Subaru of America recently announced its 2013 Auction of the Year — an award based on sales effectiveness and service quality — and taking this year’s honors is Manheim New Jersey.
Subaru determines the winning auction by tracking and measuring three key components: total sale percentage, retention to goal price and number of unique buyers.
“A numerical score is calculated at the conclusion of every sale at every location on a monthly basis, and the auctions are ranked monthly based on the final score,” said John Manchin, national fleet remarketing manager at Subaru.
Manheim New Jersey is among several facilities hosting combined Subaru factory sales, featuring company, promotional and program vehicles; and Subaru Motors Finance sales, featuring consumer off-lease vehicles.
ADESA Golden Gate has been recognized by six different consignors for superior performance.
Most recently, the auction was named the Top Retention Auction of the Year by Donlen.
In addition, ADESA Golden Gate also received recognition from these consignors for their performance in 2013:
• Customer Service Award from LeasePlan USA
• Auction Performance Award (Best Local Market) from Avis Budget Group
• High Performance Auction Award from Kia Motors
• Regional Auction of the Year for Region 6 from ARI
• Overall Achievement Award (December and January) from GM Remarketing
“Nothing is more important to us than providing the best service possible to our customers,” ADESA Golden Gate general manager Jeff Hoyt said. “We take great efforts to not only meet, but to exceed the standards set by our consigners. I appreciate that our customers recognize the hard work and dedication of our entire team.”
Used prices are spiking as of late due in part to the regular surge in demand during tax season. However, as supply continues to expand this year, prices are expected to continue the annual decline from post-recession highs.
According to NADA Used Car Guide’s 2014 Used Vehicle Price Forecast report, average wholesale prices of used cars and light trucks up to 8 years old will fall by a range of 0.5 percent to 1 percent this year.
The drop is due primarily to an increase in used supply, but the rate of decline will stay modest, says NADA UCG, due to a few macroeconomic factors.
"Economic growth is expected to accelerate to its fastest pace since 2005, keeping demand for new and used autos high," said Jonathan Banks, executive automotive analyst for NADA UCG. "A strong economy, combined with other positive factors, leads to a more positive outlook for used-vehicle prices in 2014."
Auto loan interest rates for new vehicles were at their lowest level in at least 40 years in 2013, while lender willingness to extend credit was also very high, he added.
"We expect credit to have a slightly less positive effect on used prices as they begin to normalize, but the credit environment will still remain very strong," Banks said.
As always, supply trends will play a large role in how used price changes pan out this year.
According to the report, the supply of units up to five model years in age will grow by 8 percent to 9.6 million units in 2014.
And off-lease volume is expected to continue spiking — and these cars are typically a direct feed to many manufacturers’ CPO programs.
Off-lease volume is estimated to have grown by nearly 15 percent in 2013, and is expected to increase by an additional 18 percent — or 300,000 units — this year, while rental supply is expected to rise by 6.6 percent or 104,000 units, according to NADA UCG data.
The report says late-model used vehicles will be in higher supply, but rates will still stay below pre-recession levels this year.
“Last year's 15.4-percent rise in manufacturer certified pre-owned vehicle sales, predominantly derived from this age group, indicates there will be a strong appetite for these units,” Banks said.
Factors like these will serve to cut down on the level of downward price pressure normally associated with higher supply.
"A decline in the supply of older models along with greater demand for older used vehicles in recent years will keep prices high," Banks said.
Overall, NADA expects that new market pressure and a higher supply of used vehicles will lead to a more substantial 1- to 2-percent decrease in prices for 1- to 5-year-old vehicles.
On the other hand, the report states that tight supply of 6- to 8-year-old units will result in prices being flat or rising slightly. For these older models, NADA expects supply will fall by 11 percent this year.
As far as segment change goes, NADA said annual changes in price will remain largely influenced by supply levels.
Subcompact, compact and luxury midsize cars — segments which tout historically higher supply of late-model vehicles — will see the largest price slides this year, NADA predicts.
Trends on the new-car side of the business aren’t expected to have much impact on used prices in 2014.
Though NADA is predicting that incentives for new vehicles will rise slightly this year, manufactures “more discrete” use of cash incentives and higher all around new-vehicle prices will cut down on potential downward pressure on used prices.
However, Banks cautioned that attractive lease and finance promotions combined with an improving economy may guide more consumers toward new purchases rather than used.
Editor’s Note: For more insight from NADA Used Car Guide’s “2014 Used Vehicle Price Forecast report,” stay tuned to Auto Remarketing Today.
