I have to give kudos to Tony Moorby and his excellent historical perspective during his presentation at CAR. The one key piece I focused on and pondered during the entire conference, because it intrigued me, was when he reminded us all that when we thought the sky was falling when governments outlawed odometer and title "adjustments," the market adjusted — and no one wants to ever go back there.
Now the sky is falling because transparency means data history flows, recall and insurance data, etc., and the "fear" of vehicle devaluation stares us in the face.
Really, it's the right thing to do, and as with all things, the market will adjust. And in the future, we will glad we didn't stay in the dark ages of wholesale versus the brighter light of retail.
Prior to one of the panels, I asked some of the panelists if I could call "BS" if I heard it, and they were kind enough to say, yes. And this is where I think the "BS hit the road."
Everyone speaks to complete transparency to data storage for consignors on recalls and other items, the need for more detailed information on insurance industry hits and related, but the real story is this:
IF everyone truly wanted COMPLETE TRANSPARENCY at the wholesale level, the old story that VHR data is flawed would go to the wayside, because, really, do we truly believe that block issued announcements are less fraught with error then data streams? Do we even work to obtain both VHR major streams at the auction level and mandate their use and under NAAA, arbitrate for errors? Do we actually go to the CFPB and tell them insurance company lobbies are stopping the industry from giving all the information to the ultimate retail consumer?
Clearly the answer is NO, as the CFPB and others push us in other areas. And we comply, don't you think it makes sense that we LEAD, create our own baseline not wait until another directive is mandated to us that we might not appreciate as much as our own?
In this area, I state to IARA and others, that it is both the responsibility of your organization to push your members to provide all of this information on their consignment to the auctions about their consignment and not the auctions responsibility to chase and pay for that information and then get backlash from our buyers when items are not properly disclosed. Transparency should be a consignor driven initiative that creates buyer confidence and ultimate retail crossover.
At DAASW.com, we developed a proprietary program that we call "Carfax Transparent Transactions."
EVERY unit has a green, yellow or red sticker on the windshield and any additional announcements from the consignor. Think about the uptick of a green Carfax to a seller, who announces everything "as is" and the deletion of "BS" to a dealer announcing GUARANTEED on a red sticker and it crosses over to the retail side.
Transparency should not be a "buzzword" in 2016, is should be a reality, let's stop worrying about share, arbitrage, the cheapest fee and stating that everything can sell on the net.
Let's start creating deeper condition reports on all consignment, increased data histories on every car, including recall information, because there are real people that are going to be buying and driving these vehicles we sell each day.
And we all have an ethical and moral responsibility to ensure that each of those individuals has all of the information they need to make an educated purchase, because that person might just be your son, your daughter, your wife.
As always, just one man's opinion.
Editor’s Note: 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.
Mark O’Neil, the newly minted chief operating officer of Cox Automotive, is staying put in Virginia, he tells Auto Remarketing during an on-site interview at the NADA Convention & Expo this past weekend.
He has no plans to move to Atlanta, where Cox Automotive and its parent (Cox Enterprises) are headquartered.
That’s no slight on the city; by all accounts, the company certainly plays an active role in the city’s economy and community.
It’s just a new way of thinking at a company, and within an automotive industry, that’s increasingly global.
While much of Cox Automotive’s leadership certainly still resides in Georgia’s capital, many of its top-line executives are situated throughout the country.
If you think about O’Neil’s direct reports, some are located in Atlanta, yes. But many others are based in places like Carmel, Ind.; Austin, Texas; and Burlington, Vt.
And just as those cities represent various corners and alcoves on the U.S. map, much of Cox Automotive’s business model resembles a cross-section of the retail and wholesale auto industry at large.
Auctions, classifieds listings, vehicle research/pricing guide, inventory management, websites, software, transportation, and so on.
These services, along with senior leadership located throughout the country, reflect Cox Automotive's rapid acquisition expansion in recent years that culminated in perhaps the crown jewel of all the purchases: Dealertrack Technologies, where O’Neil had been chief executive officer.
But it also reflects a changing mindset towards senior leadership and Atlanta: they're “connected, not relocated,” as O’Neil put it.
“I’ve had long discussions with the senior leadership of Cox Enterprises about the importance of building a global company; that if we are going to be a global company, we cannot be Atlanta-centric. Because the world does not revolve around Atlanta,” he said.
Cox Automotive is introducing a new approach, one that will be a “multi-year effort,” where the line of thinking is, “it’s important to be connected to Atlanta; it’s not necessarily important to live in Atlanta,” O’Neil said.
“It’s not necessarily important to think about your job being there, whether it’s my job or (chief product officer Rick Gibbs’) new job,” he said.
“You can be almost anywhere in today’s environment. But wherever you are, you must be connected to all of those who you work with,” O’Neil said. “And that can be a virtual connection; it doesn’t have to be physical.
“And the ideal is probably a hybrid, right? We’re going to do so many meetings a year in person; we’re going to do so many events in person; and we’re going to do so many virtually,” he said.
“And, oh by the way, in between, we’re all going to be at clients and be distributed around doing other things, where we’ll also connect,” O’Neil said. “So, connected, not relocated. It’s also much more efficient for the company.”
Editor's Note: This is the first in a series of stories about Cox Automotive's leadership stemming from Auto Remarketing's interviews with O'Neil and Cox Automotive president Sandy Schwartz at the NADA Convention.
On Monday, ADESA named Marty Nowlin as vice president of human resources.
In his new role, ADESA said Nowlin will develop and execute all human resources strategies in support of the overall business plan and direction of the company. His key areas of responsibility will include talent management, succession planning and the company’s training and development programs. Nowlin will also lead the company’s team of human resources professionals throughout North America.
“Marty is a veteran leader with a successful track record in the HR field and proven collaboration skills that will help take our company to the next level and ultimately achieve a high level of credibility as an effective and responsive business partner,” said ADESA president and chief executive officer Stéphane St-Hilaire.
“We are excited to welcome Marty to the team, and we are confident that he will be a positive driving force for our ADESA human resources operations throughout the United States,” St-Hilaire added.
Prior to joining ADESA, Nowlin was the vice president of human resources at Sears Holdings Corp. in Indianapolis and Chicago. He has held numerous HR leadership positions during his nearly two decades in the field, including vice president of human resources of Manpower Group and Stanley Black & Decker.
Nowlin has a bachelor’s degree in business from Indiana University.
With a record-breaking 2015 under our belts, and 2016 shaping up to be another strong year for new-car sales, many dealers are feeling confident for the coming months.
If you’re in the used-car business, however, April’s showers may not bring May flowers unless you have the right tools and strategies in hand.
Profitable trade-ins and eager buyers will begin to disappear as the traditional tax return-driven sales cycle comes to a close, while diminished profitability and increased inventory are forecasted.
Proprietary data collected from more than 2,000 dealerships shows that average total gross profitability for used-vehicle sales peaks in March and declines through the remainder of the year — a trend that will be exacerbated by the more than 800,000 lease maturities hitting the market. A prepared dealer will have plans to take advantage of this inventory influx.
As the dealership network weathers this influx of lease maturities, it’s likely that as supply rises and dealers are forced into a period of heightened competition, gross profits will decline.
To best position themselves for success — and, in some instances, survival — dealers must rely on compelling data from their technology partners to shape strategic plans, identify lucrative remarketing opportunities and develop profitable exit strategies for each vehicle they acquire.
Maximize profitability
The key to maintaining front-end gross is to evaluate historic and market data at the point of appraisal. Your priority should be identifying “core” vehicles: the models that sell fastest, most consistently and most profitably. These vehicles are prime remarketing opportunities, ensuring quick and profitable sales and reducing overall risk of wholesale losses.
A top-performing dealership’s inventory is composed of 40 percent to 50 percent “core” vehicles. An average dealership’s inventory hovers around 29 percent and drops lower when accepting non-core trade-ins in exchange for closing new-car sales.
In addition to using technology and data to identify a store’s — or group’s — most lucrative remarketing opportunities, dealers must resist the urge to succumb to tunnel vision. Too often, sellers commit to a one-size-fits-all approach and stock only their store’s brand or only vehicles that have done well in the past.
As the “traditional” customer continues to evolve and has significantly more choice, it’s critical that managers leverage a fully integrated inventory management platform to ensure that science, rather than anecdotes and gut feeling, is driving their vehicle-acquisition strategy.
In today’s fast-changing market, a fully integrated inventory management platform is a requirement. Use a fact-based approach: Analyze purchase behaviors not only at stores, but also across brands, group partners and geographic regions.
Build a data-driven strategy
The average dealership close rate was 49 percent in January, and after rising to 51 percent during tax-refund season, it declined steadily — as was the case with front-end gross — through the end of the year, dropping to 46 percent in December. Often, this close-rate decline is preventable by ensuring vehicle pricing is aligned with market trends.
Many dealerships stocked up for the planned increase in used-car business in February through April. As such, now is the time to consider an exit strategy for those remaining surplus vehicles by building an aggressive plan to divest inventory as sales begin to slow. Data demonstrates that used-vehicle front-end gross and dealership appraisal close rates decline in the second half of the year.
As a means of developing an inventory reduction strategy now, before the inevitable pressure of lower sales volumes hits, dealers should aggressively develop a data-driven plan. Dealers can use technology to determine each vehicle’s profit level per day and then carefully monitor it throughout the month.
To prevent significant wholesale losses, dealers should develop a 30-day strategy for moving inventory and plan to keep vehicles on the lot no longer than 40 days to avoid wholesale losses. If a store typically doesn’t do well with a particular model it acquires, sellers can lean on technology to achieve a balance between discount and profit based on current trends.
As sales begin to decline, aggregated inventory management data demonstrates that reconditioning costs will begin to rise, aside from a dip through the summer. To effectively reallocate assets and make use of free cash flow during that temporary dip, dealers should more actively pursue the use of digital marketing to highlight both core and non-core vehicles that may be approaching that 30-day mark.
By using a data-driven strategy to price vehicles in line with prevailing market trends, sellers protect themselves by increasing vehicle turns, reducing the likelihood of profits eroding from wholesale losses.
As the “perfect storm” of second-half stagnating sales, increased in-market vehicle availability and a slackening in consumer demand hits the market, smart dealers will increasingly look to data to assist in:
a) Monitoring reconditioning costs to keep them down in order to free cash for marketing-related activities
b) Leveraging market data to make solid retail or wholesale decisions at appraisal
As wholesale losses increase in summer months, dealers should rely on data to make smarter inventory decisions and to take in core vehicles or create an exit strategy for newly acquired vehicles, such as transferring them to an affiliated store that sells a particular model more effectively or evaluating those tagged for wholesale accordingly with wholesale pricing in mind.
Leverage technology
Pricing vehicles appropriately — and in line with market, brand and group trends — needn’t carry the same level of “accuracy” as the average five-day weather forecast. The use of inventory management tools creates visibility across dealerships, positioning them to turn vehicles for a profit faster and reducing the likelihood they’ll hold onto vehicles too long, negatively impacting grosses.
Technology is the great enabler: It allows dealers to seamlessly link across departments and empowers them to integrate complex data sets, nurturing customers and prospects throughout the sales process.
Following heightened first-quarter sales, inventory levels rise by a total of 10 percent through year’s end. Use a technology platform to:
a) Decrease the amount of time vehicles remain in inventory
b) Devise an exit strategy for vehicles that are sitting on the lot
c) Maximize front-end gross profits
Careful examination of a vehicle’s daily profitability is a dealer’s secret weapon.
By using technology to seamlessly link and drive profitability across departments, dealers are able to more effectively generate greater revenue on the sales floor and in the sales drive. For example, with a data-mining platform that constantly scans a dealership’s DMS for customers in a position to spend money at that store, a dealer can match a customer interested in a particular make and model and sell the vehicle to him or her prior to making it available to the public. This is an extremely powerful tool that significantly reduces the time and resources expended during the sales process.
To prevent significant wholesale losses, develop a 30-day strategy for releasing inventory. Consider transitioning inventory to a group partner. If a non-core vehicle has lingered too long, parse data to create an exit strategy, achieving a balance between discount and profit based on current trends.
Effectively engaging a comprehensive analytics suite that leverages technology not only to capture data, but also to make informed decisions is how the best-performing dealerships weather the storm. Inventory management technology should be integrated with CRM to ensure matches are made and potential buyers are engaged before competitors have a chance to engage them (data mining) and also to nurture them through the sales process (CRM).
The storm is predictable
Lease returns are forecast to flood the market in 2016, and used-car sales will be the key to weather the storm. Dealers who effectively use the data and the technology available to them will be better positioned to maintain volume and gross.
The approaching down cycle is predictable, but if a dealer is properly prepared, it can do better than hunker down and ride out the storm. Inventory management, vehicle merchandising and market-facing strategies are all individual aspects of creating a strong and effective strategic plan. By preparing with core modeling, smart inventory purchases, exit strategies and data-driven decisions to maximize profits, your store can emerge stronger than before.
Mike Waterman is DealerSocket’s divisional vice president and can be reached at [email protected]. The full Market Action Guide can be downloaded at dealersocket.com/MAG.
Late on Friday afternoon as much of the industry mingled through the opening day of the NADA Convention & Expo in Las Vegas, KAR Auction Services announced that subsidiary, ADESA, successfully completed the acquisition of eight auctions owned by the Brasher family along with its floor-plan financing business.
In addition to the formal completion of the transaction, the company also shared how the eight locations will be renamed. The rundown includes:
—ADESA Salt Lake
—ADESA Brasher’s (Sacramento)
—ADESA Portland
—ADESA Boise
—ADESA San Jose
—ADESA Northwest (Eugene)
—ADESA Reno
—ADESA Fresno
The company mentioned Brasher’s key corporate and local auction personnel will maintain leadership roles across the Brasher auctions.
“Finalizing the acquisition of these eight auction sites is great for our customers and our employees,” KAR chairman of the board and chief executive officer Jim Hallett said. “It allows us to provide an even wider assortment of services to dealers at these new locations and leverage the strength of the entire KAR group of companies.
“The Brasher family has a long history in our industry as a premier auto auction and is a great fit with our organization,” Hallett continued.
The addition of these auctions now gives ADESA 74 whole car auction locations in the United States, Canada and Mexico.
“I look forward to working with the Brasher’s team to serve all of our customers’ vehicle remarketing needs — in the lanes, online and financing,” said Stéphane St-Hilaire, CEO and president of ADESA. “The Brashers share our strong customer focus and together we will enhance the auction experience with our expanded service offerings.”
Brasher’s president John Brasher added, “On behalf of the Brasher family and Brasher’s Auto Auctions more than 1,300 employees, we are excited to officially become part of the KAR team.”
Along with specific market additions to expand its Retail Solutions operations, Manheim on Friday also shared its four-point plan to continue growing its extensive auction network and inventory services; a strategy the company said is based on how it continuously listens to dealers’ input.
In response to allowing clients to guide the organization’s future investments and offerings, Manheim emphasized that it is “reimagining” the customer experience by broadening its services and strengthening its North American operations, which span 113 physical, digital and mobile sales.
Before delving into four major components, Manheim North America president Janet Barnard explained how the company is bringing its auction network and offerings to more markets and delivering more access to clients than ever before.
“Our growth plan is intentional, providing choices that meet the evolving needs of our national and local clients who require anytime and anywhere access,” Barnard said while making the announcement during the NADA Convention & Expo.
“We believe offering a variety of traditional and new sales opportunities best positions us to support dealers’ growth, as well as serve clients in previously underserved markets,” she added.
Manheim indicated that it is committed to four objectives, including:
• Expanding its auction services, ensuring dealers can quickly buy and sell needed inventory, as well as reduce their risk.
The company insisted its new market structure is sharpening its ability to drive client success. Recent growth activities include transitioning Go Auto Exchange sites to Manheim locations and opening a new Manheim Cleveland site.
• Investing in digital technology, enabling clients to conduct business anytime, anywhere and during any weather conditions.
Manheim acknowledged that dealers increasingly rely on digital and mobile technology. Last year alone, the company pointed out OVE transactions increased more than 20 percent and Manheim Simulcast experienced record growth with 50 percent of attendees now using this channel.
• Reaching local and previously underserved markets in innovative ways.
For example, Manheim noted the company’s mobile auction sales are growing — with 30 established mobile units and 39 more under development — and some are evolving into regularly scheduled events in response to dealer success.
Manheim stressed that its mobile units bring technology — such as Simulcast — along with staffing and expertise to host an auction on a dealer’s lot, as well as in conference centers, warehouses and open fields.
• Leveraging the power of Manheim and Cox Automotive so that dealers can access vehicle services beyond the auction.
The company mentioned clients can seamlessly get financing, transportation, inspections, imaging, and reconditioning, and also can purchase protection separately or via a bundled solutions approach.
Manheim contends many of these services can produce cost-effective efficiencies and flexibility, freeing up clients’ time for customer-facing priorities. The company added these services can alleviate dealers’ pain points and maximize their revenue and speed to market.
“No matter where or how clients choose to do business with us, we are committed to their success and developing new approaches in anticipation of their future needs,” Barnard said. “We pioneered this industry, and today continue to develop new and better ways to meet dealers’ business needs and help them succeed.”
Manheim expands Retail Solutions adding five new sites
In other company news, Manheim announced on Friday it is expanding its Retail Solutions operations to provide clients greater access to high-quality services that can produce retail-ready vehicles
The company said it is investing $5 million to add five more locations, including:
—Manheim Orlando
—Manheim Houston
—Manheim St. Louis
—Manheim Detroit
—Manheim Darlington in South Carolina
Joining the Manheim Denver and Manheim Chicago sites that launched last year, the company stressed the new locations will serve larger geographical markets.
“Dealer response to Retail Solutions has been overwhelmingly positive,” said Grace Huang, senior vice president of inventory services at Manheim. “Clients tell us that with Manheim handling the time-consuming work associated with inventory readiness and logistics, they can focus on engaging with customers.”
By tapping Manheim’s services, the company said clients can not only reduce vehicle turn time and overhead by lowering personnel and fixed costs, but can invest their resources on customer-facing priorities.
“As our operational processes for reconditioning and inspections have greatly improved by using Retail Solutions, we can spend more time on our guests and associates — two groups critical to our future success,” said Jeff Dyke, senior vice president of operations at Sonic Automotive, which joined with Manheim to launch Retail Solutions in Denver early last year.
“Our partnership with Manheim is generating greater efficiencies and helping us maximize our revenues,” Dyke added.
By partnering with other Cox Automotive brands, Manheim can offer a wide array of diverse services, such as AiM, Ready Logistics and DealShield. Retail Solutions services include acquisitions, inspections, reconditioning, marshaling, title services, merchandising and transportation.
Manheim emphasized Retail Solutions does virtually everything to get vehicles front-line ready for consumers to “kick the tires.”
DriveTime chief executive officer Ray Fidel acknowledged some doubt about what Manheim could do with Retail Solutions.
“When Manheim approached us to offer retail reconditioning, I was skeptical,” Fidel said. “One year later, I am a believer, as they delivered a terrific execution platform. Retail Solutions is now becoming an integral part of DriveTime's supply chain. Our dealerships are very pleased with the vehicles.”
Retail Solutions currently supports 18 diverse clients, representing manufacturers and both franchised and independent dealers.
By the end of 2016, Maheim indicated Retail Solutions services will be available in a total of seven markets across the country. Its expansion creates approximately 275 local jobs, introduces master technicians into the remarketing space and offers employees learning opportunities to diversify and enhance their skills.
“Retail Solutions is a natural extension of the wholesale services we have provided to dealers for more than seven decades,” Huang said.
“Clients know they can count on Manheim to support their inventory needs — every step of the way — from the auction lane to the retail lot,” she went on to say.
Twelve weeks into 2016, it appears a few truck segments a picking up the pace when it comes to depreciation.
That’s according to the latest weekly edition of the Black Book Market Insights report, part of which looked back at the used-car price movements in opening quarter of the year.
In a departure from what has been the typical theme of the auction lanes in the last year — i.e. the downward movement in car prices — the first quarter showed a few truck segments with heftier wholesale value drops.
Among those are the full-size luxury utility segment and the full-size pickup, Black Book said.
Leading the pack in terms of year-to-date depreciation is the compact van, which is down between 6 percent and 7 percent. The prestige luxury car was second, with values down more than 6 percent. The minivan’s prices have dipped just under 6 percent.
The aforementioned full-size luxury crossover/SUV and full-size pickup follow close behind, though, as do the full-size vans, with year-to-date depreciation levels above 5 percent.
Meanwhile, showing the best retention so far this year has been the midsize car, full-size crossover/SUV and subcompact crossover, respectively. Each are down less than 3 percent, according to Black Book.
Tom Kontos called the movement an “anomaly” when ADESA Analytical Services’ monthly analysis of wholesale used-vehicle prices by vehicle model class showed that used values in February softened on sequential basis.
ADESA pinpointed the average at $10,202, representing a 0.5-percent dip compared to January, but just a modest 0.3-percent uptick relative to February of last year.
Kontos mentioned prices for cars and minivans continued to show year-over-year price declines, while SUVs/crossovers and pickups posted gains. He added that ADESA Analytical Services’ Black Book-based segmentation scheme has been revised to combine crossovers into the SUV classes, as the distinction between them has blurred.
“To me, this is another indication that growing supply are causing wholesale prices to soften,” Kontos said in a video commentary accompanying the latest ADESA data.
“February was a departure from the normal seasonal patterns that we usually see where February is a buildup toward the spring tax season in March and April where results generally favorably for wholesale prices and retail sales of used cars,” the ADESA economist continued in the video that can be viewed at the top of this page.
“We’ll be on the lookout to see if these trends reverse,” Kontos went on to say.
Kontos mentioned average wholesale prices for used vehicles remarketed by manufacturers softened by 0.5 percent month-over-month but rose by 1.6 percent year-over-year.
ADESA also noticed prices for fleet/lease consignors dropped 2.0 percent sequentially and 1.8 percent annually “as fleet/lease sales volumes rose significantly versus prior year partly as a result of higher off-lease volumes.”
The latest data also indicated dealer consignors saw a 0.5-percent price decrease versus January but a 3.2-percent increase relative to February of last year.
Kontos closed by noting data from the National Automobile Dealers Association highlighted an 11.9 percent year-over-year increase in retail used vehicle sales by franchised dealers and a 15.5 percent increase for independent dealers in February
“But both were down significantly on a month-over-month basis for the second month in a row,” Kontos said.
He also cited figures from Autodata Corp. that showed February certified pre-owned sales moved higher by 10.8 percent month-over-month and 7.1 percent year-over-year, “more than making up for January’s declines.”
ADESA Wholesale Used-Vehicle Price Trends
| |
Average |
Price |
($/Unit) |
Latest |
Month Versus |
| |
February 2016 |
January 2016 |
February 2015 |
Prior Month |
Prior Year |
| |
|
|
|
|
|
| Total All Vehicles |
$10,202 |
$10,254 |
$10,167 |
–0.5% |
1.1% |
| |
|
|
|
|
|
| Total Cars |
$8,506 |
$8,535 |
$9,074 |
–0.3% |
-6.3% |
| Compact Car |
$6,650 |
$6,531 |
$7,271 |
1.8% |
-8.5% |
| Midsize Car |
$7,667 |
$7,742 |
$8,100 |
-1.0% |
-5.3% |
| Full-size Car |
$7,378 |
$7,485 |
$8,027 |
-1.4% |
-8.1% |
| Luxury Car |
$12,899 |
$12,858 |
$13,493 |
0.3% |
-4.4% |
| Sporty Car |
$12,893 |
$12,730 |
$12,693 |
1.3% |
1.6% |
| |
|
|
|
|
|
| Total Trucks |
$12,030 |
$12,093 |
$11,409 |
-0.5% |
5.4% |
| Minivan |
$7,262 |
$7,141 |
$7,888 |
1.7% |
-7.9% |
| Full-size Van |
$12,429 |
$12,120 |
$12,155 |
2.6% |
2.3% |
| Compact SUV/CUV |
$10,615 |
$10,568 |
$10,542 |
0.4% |
0.7% |
| Midsize SUV/CUV |
$10,663 |
$10,758 |
$10,047 |
-0.9% |
6.1% |
| Full-size SUV/CUV |
$12,107 |
$12,265 |
$11,422 |
-1.3% |
6.0% |
| Luxury SUV/CUV |
$17,758 |
$17,923 |
$17,719 |
-0.9% |
0.2% |
| Compact Pickup |
$8,370 |
$8,268 |
$7,683 |
1.2% |
8.9% |
| Full-size Pickup |
$15,298 |
$15,209 |
$13,777 |
0.6% |
11.0% |
Source: ADESA Analytical Services. January revised.
Note: Black Book revised segmentation to combine crossovers into the SUV classes as the distinction between them has blurred.
Two auto auctions are getting close to driving age and celebrating their respective 15th anniversaries this month.
Starting out West, Dealers Auto Auction of Idaho is hosting an anniversary event on March 30. The theme centered on college basketball’s big month, with giveaways of big-screen TVs, basketball hoops and living room furniture.
Owner Russ Smith said in a news release: “I’m proud to be celebrating our 15th anniversary. Without amazing customers and employees we wouldn’t be where we are today. It seems like yesterday when we were selling cars out of the Fleetwood Homes Manufacturing plant. Our average sales for the first month only resulted in 40 sold units a week. Today we are selling well over 250 a week and growing stronger each month.”
Several of DAA Idaho’s employees have been around since Day 1, and there are also family members working at the auction. One of those is Britney Smith-Egbert.
“We are proud to be family owned and run since 2001,” she said. “It definitely gives us an advantage and really makes our customer service stand out. All of our employees are truly invested in the success of the company, and our customers can see that."
Meanwhile, on the East Coast, Charleston Auto Auction held its 15th anniversary event Friday, with about 1,300 cars and 700 dealers on site.
It included live music, a Southern breakfast, the sale and a then cash/prize drawings of $50,000 to close the day.
“We are honored to be part of our dealers’ successes over the last 15 years,” Laura Taylor, general manager of Charleston Auto Auction, said in a news release. “We look forward to continuing to provide premier auction services for many more years to come.”
Perhaps spring isn’t ready to bloom just yet in the auction lanes.
In this week’s Black Book Market Insights report, analysts acknowledged “no spring market lift so far,” as data from the month of February showed most car segment retention has generally continued to perform weaker than that of trucks.
Interestingly enough, Anil Goyal pointed out this pattern has not been entirely consistent across the board with a few truck segments showing great weakness and some cars showing strength.
“With high supply and low demand of small cars, we are not seeing the typical seasonality lift in values. On the other hand, crossover/SUV segments continue to get more interest from the buyers,” said Goyal, who is vice president of automotive valuation and analytics.
Looking at volume-weighted prices, Black Book reported overall car values decreased by 0.31 percent last week. The report indicated this figure is close to the average depreciation rate of 0.36 percent seen in the previous eight weeks.
Analysts mentioned prices in the full-size car, midsize car and near-luxury car segments performed the best among cars segments, changing in value by 0 percent, -0.2 percent and -0.2 percent, respectively.
Again based on volume-weighted prices, Black Book noticed overall truck values decreased by 0.26 percent last week. This reading is better than the average depreciation rate of 0.36 percent seen in the previous eight weeks.
Black Book went on to highlight all non-luxury crossover/SUV segments performed well, declining less than 0.22 percent last week. Full-size vans values rose a little, ticking up by 0.12 percent.
Black Book representatives in the lanes last week gathered comments from dealers that reflected the sentiment that perhaps the spring market is yet to bloom.
In Florida, the chatter was “Buyers said they paid up for good cars today but only a little more than they expected.” Meanwhile in Michigan, the summation was “Tough sale today with 12 inches of fresh snow but the market trend in this area is up from last week.”
Over in California, “Utilities, 4x4s and high-end vehicles are in most demand at this location, while in Texas, “No bargains today. It seemed that most all segments were in demand.”
A Tennessee observer described the scene as “A good sale all around today with trucks and SUV’s continuing to lead the way.”
Finally, what happened in Arizona might summarize last week’s activity as the lane talk was, “The market trend in this area is still a bit slow but is showing signs of a possible uptick.”
