Demonstrating what the companies say is the tremendous power of long-term collaboration, RMS Automotive and Mazda Motors UK this year are celebrating a decade-long partnership highlighted by innovation and performance-driven results.
In that time, RMS Automotive has helped Mazda sell more than 14,500 vehicles and reach more than 75 percent of the Mazda Dealer Network through its web-based vehicle portfolio management solution.
“RMS Automotive is a reflection of Mazda remarketing; in fact the two are synonymous,” said Tamara Brown, used car and remarketing manager at Mazda Motors UK. “Our accomplishments during the past decade illustrate the value of our partnership. We’re proud to have reached this important milestone with them and are looking forward to growing and continuing our relationship.”
Executives recounted that the two companies first collaborated in 2007 at a time when Mazda heavily relied on spreadsheets to monitor and administer their inventory. Hindered by this time-consuming process and limited access to its network of dealerships, Mazda tapped RMS Automotive to transform the management of its used vehicle inventory by implementing an online wholesale remarketing platform that would allow them to gain control and visibility over their entire vehicle portfolio for better, more informed decision-making.
Now, 10 years later, RMS Automotive continues to help Mazda enhance the value of its remarketing inventory by delivering faster remarketing time, improved residuals and reduced depreciation costs, all in a reliable, easy-to-use interface.
“We’re proud of our long-term partnership with Mazda Motors UK and of successfully helping them take the guesswork out of managing their vehicle portfolio,” RMS Automotive president Nick Peluso said. “We look forward to continuing to provide first-class remarketing services to Mazda Motors UK for many years to come.”
To commemorate the milestone, Mazda held an online auction hosted by Manheim UK in mid-April, during which RMS Automotive donated £50 (approx. $65) per vehicle sold for a total of £2,750 (approx. $3,600). The donation will be split across three charities — Grief Encounter, Max Appeal and Emilia’s Little Heart Foundation.
Along with some other anecdotes about what’s happening in the lanes, the latest Black Book Market Insights report indicated the truck segment as a whole is remaining fairly stable.
Editors found that three vehicle categories within the truck segment increased their values last week, including the sub-compact crossover, midsize crossover/SUV and full-size pickup.
“Small cars continued to decline in value at a faster clip while large SUV and pickup truck values remained fairly stable last week,” said Anil Goyal, senior vice president of automotive valuation and analytics at Black Book.
Volume-weighted, editors determined overall car segment values declined by 0.46 percent last week. In comparison, the market values had decreased on average by 0.32 percent per week in the previous four weeks.
In car segments, Black Book reported that sub-compact car and compact car segments performed the worst, decreasing by 0.88 percent and 0.97 percent, respectively.
Again analyzing volume-weighted data, editors found that overall truck segment values (including pickups, SUVs and vans) decreased by just 0.08 percent last week, better than the average decrease of 0.21 percent per week during the previous four weeks.
In truck segments, Black Book pointed out sub-compact luxury crossover/SUV and compact luxury crossover/SUV values dropped the most by 0.71 percent and 0.42 percent, respectively.
Turning next to what Black Book collected from its representatives scattered at more than 60 auctions nationwide, an auction general manager in Pennsylvania shared this assessment: “Our business has been good. I wish we had more vehicles to quench the dealer demand, but the positive sales conversions have been the norm, which is good.”
Meanwhile down in Georgia, Black Book’s lane watcher reported this assessment: “Online auctions in Florida (dealer consigned) and Pennsylvania (commercial) showed similar results. There was not a lot of interest in the vehicles, which resulted in more no-sales than usual.”
In nearby North Carolina, the story from the lanes went like this: “Volume was down but the inventory that was here sold well with very few no-sales.”
And finally out West in Washington, the auction beat evidently goes on as this recap indicated: “Normal sale this week with an average number of vehicles. Prices remain steady but dealers seem to be getting more conservative, not only in what they will buy but what they will pay.”
J.D. Power Valuation Services (formerly NADA Used Car Guide) recently rolled out a white paper aimed at tackling two important questions when it comes to the impact off-rental has on the wholesale market.
Analysts explained that the percentage of total new vehicle sales sold to rental companies — what is termed rental fleet penetration (RFP) — generally stands at about 10 percent to 13 percent, representing roughly 1.5 to 2 million vehicles.
“Their entrance into the used market generally occurs within one to two years after being purchased new — or much sooner than the typical retail consumer purchase or lease,” J.D. Power said in the white paper. “In addition, rental fleet companies tend to sell large quantities of off-rental units around the same time. More often than not, the concentrated influx of off-rental supply places negative downward pressure on used vehicle prices.
“A second concern involves the relationship between high RFP and automaker brand value,” analysts continued. “For example, brands or models consistently associated with high RFP frequently exhibit weaker quality or reliability characteristics—or are perceived less favorably by consumers.”
With that set of scenarios as a backdrop, J.D. Power wanted to address a pair of open questions, including:
1. How large is the negative pressure on used vehicle prices from increased supply resulting from new vehicle sales to rental companies?
2. Supply impact aside, do rental fleet sales have a longer-term impact on brand value factors, or is high RFP more a symptom of pre-existing brand weakness?
“This paper explores the relationship of rental fleet sales to used vehicle prices through two conjectural mechanisms: The first is through an increase in supply volume; the second is through damage to brand reputation and brand value,” analysts said in the J.D. Power white paper that can be downloaded here.
Black Book’s Used Vehicle Retention Index for May dipped both on a sequential and year-over-year basis.
With four car segments sustaining drops, the May index reading came in at 112.3, which was down by 0.7 percent from the April mark of 113.1. The May reading also represented a 5.6-percent decline versus the same month last year.
The Black Book Used Vehicle Retention Index is calculated using Black Book’s published wholesale average value on 2- to 6-year-old used vehicles, as percent of original typically-equipped MSRP. Black Book insisted the index offers “an accurate, unbiased view” of the strength of today’s used wholesale market values.
The Index showed a decline as car and truck segments saw increased depreciation in May following a strong spring selling season during April. The Index saw a slight bump from 113.0 in March to 113.1 in April, the first time the Index saw an increase dating back to January 2015.
The firm explained several car segments saw noticeable declines in the Index from the previous month. Sub-compact cars fell 1.6 percent while full-size cars dropped 0.7 percent. Mid-size cars edged 0.6 percent lower while and sporty cars dropped by 1.0 percent.
Conversely, Black Book noticed premium sporty cars rose 0.4 percent.
On the trucks side, Black Book determined small pickups increased 0.5 percent from the previous month. While full-size luxury utilities ticked up just 0.1 percent, full-size pickups held steady, according to Black Book.
“There is not a lot of surprise in the May numbers, particularly after seeing arguably the strongest spring-season lift on record over the last three years in April,” said Anil Goyal, senior vice president of automotive valuation and analytics for Black Book.
“It is expected that we will see more declines in the Index in the months ahead as we move deeper into the year, particularly driven by softness among car segments,” Goyal continued.
The index dates back to January 2005, where Black Book published a benchmark index value of 100.0 for the market. During 2008, the index dropped by 14.1 percent while during 2016, the index by lost 6.4 percent.
During 2011, the index rose strongly from 113.3 to 123.0 by the end of the year as economy picked up steam and used-vehicle values rose higher. It continued to remain relatively stable, rising slightly till May of 2014 when it hit a peak of 128.1.
To obtain a copy of the latest Black Book Wholesale Value Index and chart, click here.
Manheim announced that it recently installed indoor and outdoor LED lighting throughout its Manheim Orlando facility at 11801 West Colonial Drive, saving an estimated 951 tons of carbon per year — the equivalent of over two million miles driven by the average passenger vehicle.
After replacing 7,452 bulbs and 1,311 fixtures, Manheim said the installation will save the 268-acre facility an estimated $133,000 in annual energy costs and require less maintenance.
“Upgrading to LED has greatly improved the quality of our lighting in and around each of our 19 buildings, not only saving energy but increasing safety for our team members and clients,” Manheim Orlando general manager Butch Herdegen said in a news release.
This LED project supports Cox Automotive’s sustainability goal to be carbon neutral by 2044, according to Manheim. Cox Conserves, Cox Enterprises' national sustainability program, funded the project.
“Cox proactively identifies opportunities to leverage alternative energy, conserve energy and modify fleet operations across its 127 traditional and mobile auction sites nationwide,” Manheim said.
Additionally, Manheim Orlando recycles an average of 262 tons of waste each year, according to the company.
Going into Memorial Day weekend, Black Book learned dealers weren’t overly eager to spend their floor plan funds as vehicle depreciation trends told editors “that summer is fast approaching.”
According to the latest Black Book Market Insights report, editors found that car segments are picking up more weekly depreciation compared with trucks, “signaling that summer is fast approaching.” The report also touched on midsize cars, which have been experiencing some of the highest depreciation among all car segments as of late.
“Midsize cars depreciated at a higher rate than other car segments for the second week in a row. Dealers are reporting slow retail and tightening in subprime credit,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics.
Volume-weighted, Black Book indicated overall car segment values decreased by 0.41 percent last week, worse than the average weekly decrease of 0.31 percent in values over the previous two weeks.
Editors determined the midsize car, full-size car, sub-compact car and luxury car segments declined the most by 0.64 percent, 0.60 percent, 0.50 percent and 0.49 percent, respectively.
Again looking at volume-weighted information, Black Book noticed overall truck segment (values including pickups, SUVs and vans) decreased by 0.28 percent last week, slightly better than the average weekly decrease of 0.34 percent in values over the previous two weeks.
Editors found midsize crossover/SUV and compact van segments declined the most by 0.58 percent and 0.54 percent, respectively.
Representatives in lanes noticed dealers watched scores of vehicles roll over the block without adding them to their inventory. The first two reports conveying this trend came out of the Southeast.
Black Book’s lane watcher in Georgia reported, “Dealers were not in a rush to buy here today. Two dealers that I check in with routinely had extremely low numbers of purchased units.”
And out of Florida, a similar chorus: “Lots of no-sales today but the biggest surprise was that a lot of trucks struggled to get to the money or didn’t sell at all.”
And in Michigan, Black Book uncovered at least one reason why dealers might not be so ready to add lots of vehicles into inventory.
“The market is rather flat here. Retail remains sluggish and customers with challenged credit are having a really tough time purchasing transportation,” Black Book personnel reported from a Michigan sale.
Elsewhere around the country, the story wasn’t quite so bleak in the lanes where Black Book attends about 60 auctions on a regular basis. An upbeat assessment come from Indiana.
“Pretty good sale here today,” Black Book’s lane watcher in the Hoosier State said. “Retail has been a little slow due to lots of rain but the nice weather seems to have brought out the buyers.”
Down in Texas, some positive assessments there, too, with the Black Book representative stating, “We had a good sale today, which was good to see. Buyers were engaged and the values were holding steady. The rental vehicles performed better than they have the last couple of weeks.”
And finally, the sentiment out of Colorado might have just summed up the entire wholesale situation when the watcher said, “Just an average sale this week although it was better than last week. The market here is definitely settling down for the summer months.”
XLerate Group recently announced that it has brought on Tom Francois as the new general manager of the group’s Badger State Auto Auction in Fond du Lac, Wis.
Francois succeeds Tim Netz, who is retiring after 18 years of service at the auction.
“We are grateful to Tim Netz for his leadership, service and dedication to Badger State Auto Auction and wish Tim the best in retirement. At the same time, we are excited to have Tom Francois join the XLerate Group Auction family,” XLerate chief executive officer Cam Hitchcock said in a news release. “Tom brings over 30 years in sales and auto auction management, plus extensive experience in the automotive remarketing industry, serving as the past president of the Midwest Chapter and long-standing board member at both the regional and national levels of the National Auto Auction Association.”
Francois said his ability to build and maintain strong client relationships has attributed to his success as a leader, according to XLerate.
“I look forward to linking clients with XLerate’s innovative solutions,” Francois said. “My priority is to ensure every dealer receives top-notch service and great execution.”
Francois holds a B.A. degree in business administration from the University of Wisconsin – Lacrosse.
GEAA celebrates 13 years
In other auction news, Greater Erie Auto Auction recently celebrated its 13th anniversary with over 500 cars in the lanes and $10,000 in prizes for dealers during its latest sales event held this month.
“I want to thank all of our dealers and our great employees for 13 wonderful years. Without their daily and weekly support, this would not be possible,” GEAA managing partner Todd Briggs said.
On May 9, AFC and NextGear ran special floor plan promos which drew dealers from 14 states, either in-lane or via simulcast.
Dave Warren of Dave Warren Chrysler Dodge Jeep won the auction’s grand prize, a John Deere riding lawnmower.
“Everyone at GEAA strives to do what is right for our customers daily, and our staff has worked diligently to make Greater Erie a great place to be each week for dealers to buy and sell inventory,” Briggs added.
The National Auto Auction Association said Wednesday that its campaign with the Massachusetts Independent Automobile Dealers Association to raise $100,000 for the victims of the fatal crash at Lynnway Auto Auction earlier this month has almost reached its goal.
NAAA, which said $76,775 has been raised so far, urged people to make donations. The association said it donated $27,500 and its Eastern chapter donated $10,000.
The Southern, Midwest and Western chapters each donated $5,000.
Donations can be made at www.gofundme.com/lynnway-tragedy.
"Remember, all proceeds go to benefit the crash victims and their families," NAAA said in an emailed message.
"And please share the Go Fund Me link with others through your social media. We appreciate all your efforts to aid and comfort those involved in this tragic incident. Thank you."
Insurance Auto Auctions recently announced the expansion of both its Savannah and Tifton facilities in Georgia, two of its seven locations in the state.
"The Savannah and Tifton expansions advance our pace of proactive operational growth in this important marketplace to better serve our loyal base of buyers and sellers," IAA chief executive officer and president John Kett said in a news release.
"Our ability to provide day-to-day storage and services, and additional capacity as needed due to severe weather events, provides unmatched value to our customers."
The Savannah facility is adding approximately 30 acres and the Tifton site is adding approximately 19 acres to accommodate additional volume due to customer needs as well as potential volume resulting from catastrophe responses.
The Tifton facilities proximity to the Florida Panhandle allows for a quick response when severe weather incidents occur in the area.
Both locations are currently open for business. The Savannah location holds its weekly auctions on Fridays at 9:30 a.m. and at Tifton auctions take place weekly on Mondays at 9:30 a.m.
The owner of a South Dakota auction dubbed the “classic car graveyard” is currently selling his 40-plus-year-old collection of over 300 collector vehicles from the 1920s to 1990s.
Kerry Droog, owner of K&K Auto and the son of an auctioneer, has been buying from auctions and picking out finds from local farms for most of his life.
“It's the type of auction that keeps classic car enthusiasts up at night,” K-BID.com, the online auction venue hosting the sale, said in a news release. “Many buyers from throughout the United States are expected to participate in this once-in-a-lifetime auction.”
Droog has made the difficult decision to sell much of his unique collection after 40 years because he can’t fix them all, according to K-BID.
“I'm not going to lie; it's going to be difficult to see some of these vehicles go down the road,” Droog said. “I finally got to a point where I realized that I could not fix them all. It's time to pass the torch and let someone else pick up the dream of fixing them up.”
Though his collection is shrinking, Droog said for future projects he is holding on to some of his favorites such as a few trucks from his assortment of 1968 Chevy pickups.
The auction is currently live on K-BID.com and open for online bidding until June 24.
