ADESA’s recent footprint growth in the Sunshine State is now finalized.
The business unit of KAR Auction Services announced on Tuesday that it has successfully completed the acquisition of Sanford Auto Dealers Exchange (SADE) in Sanford, Fla.
This location expands the ADESA’s presence in the Florida market and joins four other ADESA auctions in the region: ADESA Sarasota, ADESA Tampa, ADESA Jacksonville and ADESA Ocala.
The auction will be renamed ADESA Orlando, and Mike Tumminello, former president of SADE, will remain as general manager.
“We are pleased to officially welcome Mike and his knowledgeable team to ADESA, and look forward to working with them to bring our entire suite of remarketing services to customers throughout central Florida," ADESA president and chief executive officer Stéphane St-Hilaire said in a news release.
ADESA Orlando has six fully automated auction lanes, along with full-service reconditioning facilities, including a body shop and mechanic shop. It is a modern facility with 70 acres, conveniently located just north of Orlando, near the Interstate 4 and 417 Greenway.
This transaction includes The Ocala Auto Dealers Exchange (OADE) in Ocala, Fla. ADESA indicated this auction's operations will be combined with and moved to the ADESA Ocala location.
Manheim on Tuesday announced it is teaming up with Alliance Inspection Management to enhance its vehicle inspection capabilities at auction sites and dealerships throughout the U.S.
More than ever, dealers are relying on inspection reports to aid the sales process and make buying decisions. Last year, Manheim conducted 3.5 million vehicle inspections, and the company expects that figure to top 4.2 million this year.
“Our condition reports help clients gain a better understanding of their vehicles’ market value, which, in turn, enables them to manage their inventory as profitably as possible,” Shane O’Dell, senior vice president for Manheim Vehicle solutions, said in a news release.
Used vehicles with condition reports are about four times more likely to sell than cars without them. Online and in-lane buyers tend to look first at listings with condition reports to identify vehicles they want to target. Additionally, inspection results cut down on arbitration; Manheim’s and AiM’s arbitration rate for cars with condition reports is less than 1 percent.
The volume of vehicle condition reports has increased greatly since 2014, averaging 20 percent year-over-year growth. More than 70 percent of large dealers and 46 percent of small to midsize dealers are using real-time data about a vehicle’s current condition to make better decisions and make it easier to conduct business. Another driver of condition report volume is the growing need for mobile inspections, as buyers and sellers evolve their strategies to add more digital environments to their sourcing and sales networks.
Manheim and AiM first formed an alliance last March to examine best practices and standardize new inspection technologies across live and online auctions to create greater consistency in the inspection process.
The XLerate Group announced Monday afternoon that it has purchased the Grand Rapids Auto Auction.
“With the addition of GRAA, XLerate continues to execute on its plan to grow our business and its service offering by acquiring quality independent sales. GRAA is highly respected and will be a phenomenal complement to XLerate’s Greater Kalamazoo Auto Auction,” XLerate chief executive officer Cam Hitchcock said in a news release.
“This acquisition bolsters XLerate’s presence in the critical Midwestern market and our capabilities to service fleet/lease and financial institution customers. We are honored that Mark Capel and his staff will join XLerate’s highly talented management team, and XLerate’s team will benefit from Mark’s deep experience in compliance and best auction practices for the fleet/lease and institutional markets,” he said.
GRAA holds sales each Tuesday at the five-lane arena. The auction, located on approximately 30 acres, also includes a reconditioning facility and a mechanical shop. Mark Capel has been GRAA’s principal owner since 2001.
“Joining the XLerate group is a great thing for GRAA’s customers and employees. The support and resources that the XLerate Group offers to its auction family allow me to better focus on building my business and serving GRAA’s customers,” Capel said. “My family and I are excited to join a high quality, high integrity group of operators who share our commitment to providing a superior customer experience.”
Northern California auto dealers are meeting in a new, high-tech venue for weekly United Vehicle Auction events: the UVA Center at ADESA Brasher’s in Sacramento.
In a news release announcing this week’s grand opening, John Brasher, general manager at ADESA Brasher’s, described it as a “high-octane event” that set a new standard for weekly auctions.
“We ran 223 vehicles in two virtual auction lanes and fielded bids from a standing-room-only crowd,” he said. “The dealers participating in the sale in the UVA Center were joined by online bidders from all over the West.
“Since its launch in 2007, UVA has changed the way new-car dealers buy and sell vehicles, and our new UVA Center has taken the sale experience to a whole new level, in an environment that combines ease, comfort and very latest in technology,” Brasher continued.
UVA recorded the sale of 5,900 vehicles last year, and is on track to sell 7,200 this year.
In other auction news, KCI Kansas City recently hosted a U.S. Marshals Service (USMS) sale that featured 25 high-end, exotic vehicles. Registered dealers and members of the general public selected from a variety of vehicles including a Ford Mustang Cobra Jet, a Ferrari 430 Scuderia, a Ford GT, a Mosler MT900S, a McLaren 12C and 12 Ducati motorcycles.
“Our KCI team worked tirelessly to conduct one of the best auction events I have ever been involved with,” Doug Doll, KCI Kansas City’s general manager, said in a news release. “In short order, they accurately processed several thousand new registrations. Bidders from 30 states joined us, and the media attention here in Kansas City was incredible.”
Competition was intense, with more than 725 in-lane and online bidders vying for 25 vehicles. In the end, 22 sold, with a 2006 Ford GT fetching the highest price at $285,000.
Flynn Jensen Co. partners with KCI to service this USMS contract.
Whether the cars were being sold online or in the auction lane, first-quarter volume climbed double digits for the ADESA auction business unit of KAR Auction Services.
The auction chain lifted its overall volume by 17 percent year-over-year, with physical auction volume climbing 12 percent, according to earnings results released by the parent company.
Meanwhile, online-only volume for ADESA was up 33 percent, compared to a 10-percent gain in Q1 of last year.
Likewise, the overall volume gain (17 percent) compares to an 8-percent increase a year ago, and the 12-percent growth in volume at physical auction locations is up from 7-percent growth last year.
The 17-percent hike in overall volume — along with a 5-percent gain in revenue per unit and a positive impact of $16.6 million from acquisitions — helped drive ADESA’s revenue to $401.5 million, which compares to $328 million in revenue last year.
EBITDA came in at $97.1 million, up from $70.5 million a year ago.
Adjusted EBITDA was $104.2 million, compared to $77.0 million in Q1 2015.
Online volume
Online sales, including online buyers at physical auction, comprised 43 percent of ADESA’s volume in the quarter, compared to 40 percent a year ago.
The online-only volume was at 188,000 units, versus 141,000 a year ago. Total revenue per unit on these cars was $116, up from $107.
Physical volume
Conversion rates at the ADESA physical auctions were at 61 percent, down from 62.8 percent. Revenue per vehicle on these cars was $737, up from $681.
Overall KAR Results
As far as the parent company, overall revenue climbed 18 percent to $745 million. Net income was up 11 percent at $60.7 million. Adjusted EBITDA climbed 17 percent to $189.5 million.
Children with life-threatening illnesses will see some of their wishes come true thanks to the generosity of Texas dealers who attended a gala hosted by Texas Lone Star Auto Auction.
The fundraising sale, which featured vehicles from TLSAA’s local dealerships, raised nearly $16,000 for Make-A-Wish North Texas, which will use the money to help make dreams come true for seriously ill children.
“We hosted this special event sale to give back to a very deserving charity that offers support within our community,” said Jeff Dunning, general manager for TLSAA, an XLerate Group auction. “Because of our dealers’ overwhelming generosity and support, the lives of the children in the Make-A-Wish community will benefit.”
“Our dealers were out in full force for this sale,” added Paula McKinney, TLSAA sales manager, “and I am proud to say that our employees put many hours of their own time to make this a successful event.”
The gala featured post-sale giveaways including a 65-inch Sony 4K Ultra HD television and two $500 cash drawings, as well as a raffle for a 2016 Toyota Tacoma truck.
National Auto Auction Association members responding to the trade group’s annual survey reported $90.6 billion in sales in 2015, an increase of nearly 11 percent over the prior year. The number of units sold, 9.2 million, was an increase of 6.5 percent, while the number of vehicles entering auction rose by 5.7 percent, coming in at 16.6 million.
The average sale price per vehicle was $9,748, up slightly from the previous year.
NAAA chief executive officer Frank Hackett said the news was encouraging.
“The survey results show the strength and depth of a mature industry that has demonstrated its resiliency. I am confident we'll continue to be a vital and growing part of our nation's economy for years to come," he said.
Dealer consignment vehicles represented the largest number of units sold, with a 57.1-percent share. Next up was finance and fleet (lease, fleet, repo) at 35.1 percent, followed by manufacturer vehicles at 6.9 percent. NAAA said 0.9 percent came from other sources.
The 19th annual survey, conducted for the NAAA by CliftonLarsonAllen, LLP of Arlington, Va., had 76-percent response rate representing 255 NAAA North American member auctions.
The average NAAA auction member operates an eight-lane facility on 78 acres, employs 137 people with a payroll of $3.8 million, and contributes $17,000 annually to charity.
Change has been good for auction owner Wade Walker and his wholesale operation along the Gulf Coast.
With a new name and a new general manager at the helm, the Walker Group’s Corpus Christi Auto Auction has recorded steady increases in consignment and sales since the beginning of the year.
When 2016 began, Walker named Hunter Dunn as general manager at Corpus Christi AA, previously known as Sparkling City Auto Auction until February when it was renamed.
The ServNet Auction group member highlighted Dunn’s efforts have resulted in sizeable increases in weekly consignment and record-breaking sales. Walker also noted that the added consignment has also sparked an expansion project at the Corpus Christi facility, which will add five acres of parking.
“Hunter has been an outstanding member of our auction team since coming to work for us in 2010 as our sales manager,” Walker said. "He worked hard from the moment he came on board, 'learning the ropes' of the auction business and really focusing on building strong relationships with the car dealers in our market area.
“When he stepped into the role of general manager in January, he was off and running, and, as a result, the auction has experienced more vigorous growth than ever before,” Walker continued.
Hunter was no stranger to the automotive industry when he came to work for the Walker family. He was well acquainted with the car business, having learned it from his father who owned a dealership in nearby Falfurrias for many years.
Drawing on relationships he had already developed with other dealers in the region, Dunn brought new business to the auction and set a high standard for customer care and personal service.
“From the moment he came on board with us, Hunter showed that he was both a leader and a team player, attributes that make him an excellent general manager,” Walker said. “He values his coworkers and encourages them always, working alongside them to get the job done. He rarely accepts a compliment without giving the lion's share of the credit to the employees who work with him.”
Corpus Christi AA has been operating under the Walker family banner since 2000. With Dunn at the helm as general manager since the beginning of the year, the auction has recorded steady growth.
“As busy as he is with the responsibilities of a general manager, Hunter is committed to maintaining strong relationships with his new car dealer customers,” Walker said. “With the help of his assistant Paul Beuno, he continues to round up cars for the sale each week. If there is a problem, no matter the size, he works on it until he has a satisfied customer.
“Every time I attend the sale in Corpus Christi, a customer makes a point of telling me how much they like Hunter and what a fine job he does for them,” Walker went on to say.
Dunn described what it’s been like to be leading the auction’s team.
“I’m thrilled to be working for the Walker family, and am really proud of the team at Corpus Christi Auto Auction,” Dunn said. “From the day I started working here, I’ve heard over and over that our focus on the individual customer really sets us apart from the competition.
“We work hard to make sure that we know everyone who walks through our front door, and if we don't, we make sure that they know they've found a friend and partner at Corpus Christi Auto Auction before they leave,” Dunn added.
Located in in the Corpus Christi suburb of Robstown, Texas, Corpus Christi AA serves southeastern Texas and Louisiana. Dealer auctions are held each Friday at its new, modern four-lane facility, where consignments from dealers, fleet and lease companies and financial institutions are offered each week.
Reinforcing its commitment to bring the remarketing industry together, AutoIMS on Thursday announced an expansion of its client services team through the hiring of an industry veteran and the naming of a new vice president.
Joining the AutoIMS staff as Director of Client Support after 20 years of service leadership most recently with AutoVIN and DataScan is Ann Cammarata.
“Ann’s many years of well-regarded client advocacy in the auto remarketing industry make her a perfect fit for AutoIMS,” said Mike Broe, president of AutoIMS (Auto Auction Services Corp.).
Simultaneously, Joe Miller was promoted to the role of vice president of client experience.
“Joe’s customer focus and deep understanding of how AutoIMS can positively impact client workflows, efficiency and return in the remarketing process make him a natural fit to address the growing expectations of our clients,” Broe said.
Miller has spent six years as the director of customer service at AutoIMS, supporting clients on all sides of the remarketing industry. Miller was part of Auto Remarketing’s inaugural group of Remarketing & Used-Car Industry’s 40 Under 40.
“Our clients and partners continue to increase their trust and investment with us, and with these changes at AutoIMS, we hope there is no doubt of our commitment to providing extraordinary service to the industry in return,” Miller said.
“Ann’s energy, relationships, and proven leadership skills will help us take client service to a new level,” Miller went on to say.
Manheim declared on Thursday that wholesale inventory management just became a whole lot more convenient with a pair of enhancement to its digital offerings.
With the introduction of OVE Text Notifications, dealers can fully negotiate transactions via text. Buyers and sellers are now able to accept, decline or counter an offer by text message, in addition to replying via the OVE online platform or Manheim mobile app.
Manheim insisted it is the first company in the industry to offer a two-way text feature.
The company highlighted dealer clients already have shown enthusiasm for the new two-way text feature, which allows them to make inventory transactions at anytime from anywhere, allowing them more time to focus on their customers. Since the launch of two-way text in January, more than 5,000 dealers have signed up and more than 2,800 vehicles have been sold via text.
“It is much easier for me. I am on the road a lot and always had to log into the site from my phone to counter or accept offers, now all I have to do is answer by text,” said Jacob Kern of Kern Automotive Group in Marietta, Ga.
Manheim mentioned a second enhancement offering greater convenience and more competitive bidding is OVE Daily Sales.
Dealer vehicles now run for 24 hours from 4 p.m. to 4 p.m. ET, seven days a week. All Daily Sales vehicle listings start and expire together each day. At 4 p.m., the vehicle sells, is relisted or comes down from the site, based on the seller’s specifications. Live inventory is now relisted in minutes versus hours.
Added in March, Daily Sales are expected to increase competition and make it easier to make the right inventory choices, as buyers and sellers gain a clear view of their cash flow and inventory on a daily basis.
“This approach offers a more aggressive bidding environment and provides greater urgency for sellers to price right and for buyers to buy right away,” said Stephen Smith, vice president of product management at Manheim. “Daily Sales benefits all clients, with the ability to track cash flow for bought and sold vehicles each day, allowing greater confidence in bid activity.”
OVE is one of the industry’s largest digital marketplaces, with more than 7,500 dealers participating and more than 240,000 vehicle listings a month. Manheim noted OVE transactions are up 21 percent over last year’s performance and March was the highest month on record.
“We’ve been on the cutting edge of selling cars online since the late 90s, and we continue to define and deliver a trusted digital marketplace that makes it easy for our clients to manage inventory,” said Grace Huang, Manheim’s senior vice president of inventory solutions.
