Wholesale prices started falling at a more rapid pace in September, with all segments seeing prices decline except for two: luxury cars and midsize cars.
The Manheim Canada September index was down last month, falling by almost three points from August’s reading of 92.6.
The decline also marks a 1-percent drop from September 2013.
Luxury car saw the strongest price retention, seeing an increase of 2.7 points from August on the index.
Midsize cars were up next with a 1.3-point rise.
On the other hand compact cars saw prices drop significantly in September; this segment’s index reading fell by 7.3 points.
Some of the larger units also saw prices fall last month.
Showing the biggest drop of any segment last month, vans saw a decline of 7.7 points.
Lastly, pickups and SUVs fell by 2.2 and 2.5 points, respectively.
It is apparent auction price declines are speeding up as the weather cools.
According to the latest RVI Market Update, the RVI Used Vehicle Price Index, which measures the wholesale values of used vehicles ages 2 to 5 years old, fell by only 0.2 percent in August.
And the ADESA Canada Used Vehicle Price Index also dropped in August, though just slightly, falling by 0.7 percent from July.
Used supply expansion may have a direct correlation to recent months' price drops in the lanes.
In fact, ALG predicts that between this past July and July 2018, used supply will increase by 178,000 units, putting downward pressure on used values.
And according to a recent RVI Risk Outlook report, as used-car supply increases over the next five years, used-car prices, on a nominal level, are predicted to drop by 4 percent from current levels by 2017.
The Canadian Vehicle Manufacturers' Association (CVMA) as well as the Global Automakers of Canada praised the Canadian government’s latest move to reduce vehicle greenhouse gases and smog causing emissions.
The Environment Minister Leona Aglukkaq announced Monday expected amendments to Canada's greenhouse gas (GHG) and "Tier 3" emissions regulations for new light duty vehicles, as well as new regulations to further reduce vehicle related smog causing emissions to improve air quality.
Here’s a breakdown of the amendments and expanded regulations:
- The new greenhouse gas emissions regulations for light duty trucks for the 2017-2025 model-year vehicles will align with those in the United States over the same period. The proposed new regulations mean vehicles in the 2025 model year will use 50 percent less fuel than those of the 2008 model year vehicles.
"The proposed regulations set a very challenging objective for Canada's vehicle manufacturers," said Mark Nantais, president of the CVMA. "By being part of a robust, aligned standard, new more advanced technologies come to market more quickly with greater choice of products that are more affordable for consumers as manufacturers are to able take advantage of the economies of scale derived from the larger integrated market inherent in the North American automobile industry."
- The new Tier 3 criteria air containment (smog causing) emission standards for new vehicles will work to further reduce those emissions by 80 percent from the existing Tier 2 emissions standards.
"These new regulations will further help reduce the impact of vehicles on regional air quality. In this regard, the on-road light duty vehicle fleet is the only sector to demonstrate continuous year over year reduction in smog-causing emissions since 1985," Naintais said.
- The government also announced it will be aligning to the more extreme U.S. greenhouse gas emissions regulations for heavy duty vehicles and engines for the 2018 model year and beyond. This move will work to reduce truck emissions by up to 23 percent.
"Today's announcement offers much-needed regulatory certainty as automakers develop their medium- and long-term product plans," said David Adams, president of Global Automakers, when the news was announced Monday.
"The forthcoming greenhouse gas emissions regulations for light duty vehicles covering the 2017-2025 period, along with the anticipated introduction of draft "Tier 3" amendments to Canada's vehicle emissions and sulfur in gasoline regulations underscores the reality that vehicles and fuels operate as a tightly integrated system,” he continued.
Adams pointed out that for several years, Global Automakers has encouraged the Canadian government to put into place regulations that push toward cleaner fuels, such as ultra-low sulfur gasoline.
Lower sulfur fuels are “critical” to the successful introductions of several advanced engine and emissions technologies required to meet the government's 2017-25 GHG emissions regulations, the organization stated.
"The consistent availability of ultra-low sulfur gasoline across Canada is essential to support our members' introduction of cutting-edge emissions reduction and fuel-saving technologies. Working together, cleaner fuels and more efficient engines will deliver improved fuel efficiency and markedly improved air quality for all Canadians," added Adams.
This news comes on the heels of the announcement of the Joint Forward Plan, released by the Canada-United States Regulatory Cooperation Council (RCC) earlier this month.
The plan, the next step in cooperation between the two countries set in motion by the 2011 Joint Action Plan, continues the implementation of groundwork to collaborate and streamline joint efforts involving departments and agencies with responsibilities for agriculture and food, transportation, health and personal care products, workplace chemicals, and the environment.
Announced this afternoon another player is entering the online dealer-to-dealer auction ring.
Software company XLane Holdings Inc. revealed today its new product InstantAuction.
Company management says the new tool “puts the dealers in control” and offers a new level of transparency in the online buying and selling environment.
The auction platform is set to launch Oct. 1, and XLane is signing up its current dealer base in the program already. The company anticipates over 100 vehicles to be available on the new site in its first week alone.
How does the new tool work?
It will cost dealers $15 a vehicle to post and sell on InstantAuction, and XLane personally manages all transactions “to ensure sellers get their money when vehicles sell, while also offering arbitration management to protect buyers from foul play,” the company explained.
And users have full control of what they want to see on the site. First, dealers select what kind of vehicles and companies they want to “follow”, and they will be notified by text, email and in-app notifications when fresh inventory is listed.
“We believe this will change the way dealers re-market vehicles in an online auction marketplace” says XLane’s chief executive officer and founder Tave Della Porta. “Sellers will know who is interested in their vehicle and how to contact them. Essentially, they become their own auction ‘ring-man’. In addition, there is a huge benefit for buyers knowing who is behind the vehicle they want, and who is bidding against them.
“For example, some of the most popular dealer-to-dealer platforms, allow the seller to bid on their own vehicle they have listed and buyers do not see who is bidding against them. You can imagine how that plays out. We want to change all that.”
And the key word here is “transparency.”
Sellers using the new tool will be able to track how many dealers have been notified about their vehicles; who has viewed the vehicles; who is bidding on the vehicles; and how to contact those interested in a no-sale scenario.
And buyers are privy to not only details about the vehicles they are interested in, but also will be able to check into who the seller is as well as who they are bidding against.
And this isn’t the first time the company has delved into the online auction space.
Last October, XLane integrated their mobile platform with ADESA Canada, enabling dealers to post inventory live to ADESA.ca directly from the XLane app.
The company is moving even further into the online auction industry with this latest step, and is also in the process of building relationships with syndication partners in an effort to make it easier for dealers to move their aged inventory into XLane for auction.
TRADER Exchange — the company’s new dealer-to-dealer online auction tool — is scheduled to roll out to Ontario dealers by the end of 2014 with a national launch in 2015, and the company is already ramping up the offering to make sure both buyers and sellers are comfortable doing business.
TRADER announced this week partnerships with both CarProof and Apex Inspection Services, in order to ensure TRADER Exchange users are privy to vehicle history reports and reconditioning reports, as well as inspections they can trust.
The new partnership with CarProof enables TRADER Exchange users to directly access CarProof Vehicle History Reports and CarProof's new RECON tool.
CarProof RECON uses the vehicle’s VIN number to determine an estimate of the costs involved with reconditioning a vehicle.
“It was important for us to include ways to protect our users. When making any type of online purchase the fear is always whether or not you’re getting a fair deal. This is why we were excited to partner with CarProof. Their products are well known and they are a trusted source within the automotive industry,” says Robert Rath, vice president of dealership products and business development at TRADER Corp. “We look forward to working with CarProof to continuously provide great products and service offerings to our customers.”
The companies contend integrating the RECON tool into Exchange generates trust between buyer and seller in an online environment.
“By using CarProof RECON, TRADER Exchange users can provide their customers with full transparency — this is crucial because trust is everything when you’re buying or selling,” adds Shawn Vording, director of product management at CarProof. “We’re thrilled to take our already deep integration with TRADER to a new level and we’re proud to be a part of an exciting new platform in the automotive industry.”
Furthering the mission of inspiring trust between buyers and sellers on the new site, TRADER also announced a new partnership with Apex Inspection Solutions this week.
The partnership was formed in order to provide inspection reports and services for TRADER Exchange. Now, users will be privy to a third-party inspection reports for vehicles they are looking to purchase.
The inspection reports will be available for request within TRADER Exchange desktop and mobile applications during the arbitration process.
“We look forward to being a part of the growth of the new TRADER Exchange program and building out custom solutions for users of the system. With TRADER’s existing network reach and Apex’s services, we feel that this will be a highly regarded and successful program for dealer to dealer networking and sales,” says Craig Martin, director of Canadian operations and managing partner at Apex.
These inspection reports are one piece of TRADER Exchange’s arbitration process, which management say includes predefined policies and regulations, as well as a dedicated arbitration support staff.
“The arbitration process is one of the most difficult parts of a wholesale auction, regardless of whether or not it’s live or online. From the get-go we knew we had to find a way to make this process a lot more transparent for dealers. Our partnership with Apex ensures we are providing dealers with a trusted resource should there be a need for arbitration,” adds Robert Rath, vice president of dealership products and business development at TRADER Corporation.
Dealer-auction.ca is ramping up its arbitration policy in an effort to offer more protection for Canadian buyers.
Manheim Canada’s online marketplace recently announced the launch of their new arbitration process for customers buying vehicles on the Web, using the U.S. National Auto Auction Association arbitration policy as a guideline.
The company shared the new policy gives buyers the option to arbitrate a vehicle purchase if an undisclosed problem is discovered following a post-sale inspection.
“We want to give buyers the confidence to buy online, knowing that there is some recourse if there is a problem with the vehicle,” said Gareth Walker, operations manager for Dealer-Auction.ca. “Just because our customers are buying online, they shouldn’t be disadvantaged compared to those people buying in the physical auction. The increase in buyer confidence means that buyers will buy more, and in turn sellers will want to list more. It’s a win-win situation.”
The new policy is all NAAA compliant, and basically “mirrors” the physical auction policies, management said.
If undisclosed problems with vehicles come up after the sale, buyers have the option to return or have the cost or repair covered.
TRADER Corp. is entering the online auction ring with its new product TRADER Exchange.
The new dealer-to-dealer auction tool gives TRADER’s dealer customers a way to wholesale vehicles without leaving the portal they have used to retail units to customers in the past.
In an interview with Auto Remarketing Canada, Gayle Kosokowsky, director of B2B marketing at TRADER, said, “The new tool gives dealers another option to wholesale their vehicles, and it is fully integrated into the TRADER Control Center, which is the same software that they use to get their inventory out on the Web.
“It is the exact same software, so the move to using TRADER Exchange should be seamless and easy for the dealer,” she added.
The tool will be available through the TRADER Dealer app, as well, for dealers to buy and sell on the go through their mobile devices.
Kosokowsky explained the reasoning behind the dealer-to-dealer auction launch is an effort to provide a “one-stop shop” for dealers.
“Right now, the dealers don’t have the opportunity to purchase and sell directly to dealers through our tools, and this tool allows them to do so,” she said.
TRADER Exchange is set to launch in mid- to late September, and will only be available to TRADER customers.
It will be initially available to Ontario dealers only, but Kosokowsky said the auction will be going nationwide in early 2015.
Here’s how it works. Posting vehicles on TRADER Exchange requires dealers to go through four steps.
First, of course, dealers will select vehicles from their inventory list to offer in the dealer-to-dealer auction space.
Next up is filling in reconditioning details. TRADER is currently working on a partnership with CarProof to integrate its new RECON tool into the Exchange program. Read more about CarProof RECON here.
“The recon portion is just so that dealers are fully aware of what is happening with the vehicle, also the vehicle history report, and that’s just because in a physical auction you can look at the vehicle and see what is happening, but here this is just building an element of trust for us on our online auction customers,” Kosokowsky said.
Next, up dealers will fill out auction details, which includes changes in the inventory information within Control Center. For example, dealers can alter the price from retail to wholesale, and/or make the listing comments more specific for dealer-to-dealer sales, rather than dealer-to-consumer.
Lastly, the dealer must schedule his or her auction. The minimum timeframe for TRADER Exchange auctions is 20 minutes, and auctions can go up to eight hours.
During initial market research and focus groups with dealers, Kosokowsky said dealers said they wanted to keep the auction timelines short.
“The reasoning was a sense of urgency, so they aren’t dragging things out over days and days and take up their time and attention when they may or may not get the vehicle,” she said. “That was one problem cited with online auctions … is you never know if you are going to get the vehicle, even if you have the highest bid, because in the live trade scenario, the dealer may only be considering taking a trade-in. So they don’t actually have the vehicle yet, and it is still with the owner.”
With live trades, dealers are bidding on a vehicle the other dealer may not have his hands on yet, so by making the auction times shorter, dealers are spending less time and investment on individual auctions.
TRADER is only offering the tool to licensed dealers, of course, and is also making it easier for participating dealers to post their registration numbers.
“We have been collecting their registration numbers and including them in the ads for them and their dealer profiles,” said Kosokowsky. “Rather than them having to post them every time, which in some provinces you have to do, we are collecting them so it just happened automatically for the dealers."
Two weeks before launch, participating dealers will be allowed to start posting inventory, as this will give TRADER an idea of the amount of inventory TRADER Exchange will tout when they open the virtual doors and allow for bidding to start.
Manheim announced today it has chosen a new Canadian vice president. Appointed to the position is Danny Fayad, who will serve as vice president of sales and business development for Canada.
In his new position, the VP will lead both the commercial and dealer account teams in Canada, the company said.
He will also be focusing on solutions designed to enhance the Canadian customer experience.
Fayad and his team will also work to better understand customer needs and to create solutions, watch market trends, and track industry updates, Manheim reported.
Fayad will report to Mike McKinney, regional vice president of operations, East.
“We’re excited to have the experience and strong leadership of Danny on our Canadian team,” McKinney said. “Danny’s wealth of knowledge about the market and auction operations along with his dealer background, bring a great perspective as we continue to develop products and bring new tools to the Canadian marketplace.”
Fayad brings with him over 30 years of experience in the automotive industry, with time spend in both retail and wholesale operations.
In 2013, he partnered with Manheim to make Manheim Edmonton and Source Auto Auction the company’s first venture into western Canada.
Previously, Fayad was the executive director of used-vehicle operations of the Priestner Group, also known as Go Auto.
At Go Auto, he was responsible for management of the profitability in the wholesale used-car departments within the group’s structure.
Fayad also is familiar with the dealer side of the business. He previously owned and operates an independent used-vehicle store.
“This is a great opportunity to help build new solutions for both buyers and sellers in Canada,” Fayad said. “Having local market expertise and being backed by the resources of the world’s largest auto remarketer provides a unique advantage, and allows me to drive results for our customers.”
Last summer, Kia Canada Inc. announced a new online tool for dealers, feet and rental partners that has made acquiring used and certified pre-owned vehicles a bit easier.
More specifically, Kia said in July that it had partnered with Web-based auction AutoGavel Exchange — powered by North Toronto Auction — to offer an online inventory option for dealers.
To get a handle on how the site has helped dealers stock their lots over the past 10 months, Auto Remarketing Canada spoke with a few of the leaders at North Toronto Auction.
The website — www.agx-kia.ca — offers Kia dealers exclusive services and access to inventory from Kia Canada, daily rental companies, feet management companies, auctions, other dealers and, in the future, the Kia Canada lease returns, the company explained.
Matt Rispin, general manager and co owner at NTA said that since launching in July, the portal has allowed Kia dealers to source vehicles, maintain inventory, monitor certified pre-owned vehicles and bulletins, and wholesale/ exchange vehicles.
Rispin said the website was largely a result of the auction “being aware of its customers’ needs.”
“The site (AutoGavel Exchange) is very versatile, which allows us to customize it for other OEM’s or fleets,” he said. ”We don’t want to force our customers to conform to our template, we want to build a template for our customers that works within their procedures and processes.”
Gerry Johnson, corporate account manager at NTA, explained the primary goal of the Kia site was to create a “one-stop shop” destination for Kia dealers to buy, sell and ground lease returns and trade Kia product in a closed online environment.
Johnson said one way the site has met this goal is through the ability to trade or exchange CPO vehicles in a controlled environment while supporting Kia Canada’s CPO program, as well. In fact, the AGX-Kia site was integrated as a key component to the Kia Canada CPO program.
It also offers dealers a unique, multiplatform experience with CPO vehicles.
For example, if a vehicle is posted to AGX, it is also “pushed” to major third-party retail sites and to the homepage at Kia.ca.
“AGX offers maximum buyer exposure which transcends to more dollars for the CPO vehicle,” Johnson added.
But NTA and Kia haven’t stopped looking for ways to make the site even more valuable for dealers.
“The AGX tool provides Kia Dealers with a very unique tool and platform that Kia can build upon,” Johnson said, leaving the door open to additional improvements and additions to the site.
The auction will be adding a lease return grounding tool component to the site later this year to “evolve with the industry and the impending Kia lease returns,” Rispin said.
NTA said the program continues to gain popularity as it progresses.
“For those that have engaged in the website, the reaction has been positive. We will continue to enhance and evolve the AGX-Kia website moving forward, which will no doubt provide our dealers with a sound business tool,” Johnson said.
On top of having access to exclusive inventory, Kia dealers can also ramp up their CPO programs by “exchanging” inventory with other dealers.
CPO vehicles are offered in both a retail and wholesale option on the website, allowing for dealers to access other participating dealer’s inventory in order to potentially facilitate a transaction.
Johnson offered the following example: “If a customer asks for a blue Kia Soul specific trim and it does not exist in current dealer’s inventory, participating dealers can access AGX-kia.ca and search other dealer inventory and make a purchase of a blue CPO-ready Soul from another dealer.
“This keeps that retail customer in your dealership while providing exceptional customer satisfaction. We are confident that this program will be a great enhancement,” he added.
When the site was first launched, the tool brought Kia’s remarketing, feet and CPO programs full circle, said Richard Pasta, manager, national feet sales, remarketing and CPO for Kia Canada.
Johnson elaborated on this statement: “The three departments are very closely linked and support each other’s corporate goals. We have ensured that our design of the site has all these areas in mind to allow for optimal functionality.”
As used supply remains tight, the question remains whether other automakers will embrace similar tools.
“I do believe that this is something that most OEM’s will embrace. A site that they design based on their objectives, tying all three areas (fleet-remarketing-CPO) is very unique and beneficial,” Johnson said. “The AGX-kia.ca website provides our dealers a simplified, one stop destination for ease of CPO use.”
Editor's Note: For more stories on the latest technology and new digital products to hit the remarketing industry, see the latest edition of Auto Remarketing Canada Digital Magazine.
As the buying and selling of vehicles becomes more of a digital process, the lines between wholesaler, retailer and consumer continue to blur.
Cheryl Munce, chief executive consultant at ALTESO Inc. and panelist at the 2014 Auto Remarketing Canada conference, goes so far as the ask the industry this question: “Isn’t it time to lead the paradigm shift and ‘blur the lines’ between wholesale and retail?”
Vehicle-description pages, multiplatform selling, direct-to-retail-customer sales from the auction lanes.
These are all examples of tools, technology and strategies that have become hot-button topics as the sourcing, stocking, and selling vehicles becomes more and more of a digital process — and puts more power into the hands of wholesaler, retailer, and consumer, alike.
Multiplatform selling, in particular, has become a water-cooler topic as of late. In the U.S., Manheim, ADESA and the independent auctions have formed a steering committee to work on a multiplatform bidding solution expected to be ready for a pilot program in the second half of the year, and steps have been made toward standardization of condition reports, as well — an integral part of the potential success of multi-platform selling.
But Munce asks the industry: “Why stop at wholesale?”
“Isn’t it just more of the same? The wholesale concept will simply aggregate all auction listings into a common porthole for ease of access by the wholesale buyers. The same buyers will be bidding on the same inventory, only through one portal,” she said.
Munce contends the industry should consider reaching non-traditional buyers and integrate auction inventory with sites where consumers are shopping directly.
Munce contends all of these factors, starting with “virtual inventory,” or direct-to-retail-customer sales from the auction, will cut down on the definition between buyer and seller, wholesaler and retailer.
“Adding virtual inventory directly on a dealer’s website puts the buying decision in the hands of the consumer and minimizes the financial risk to the dealer. Vehicles can be sold before they are bought!” said Munce.
As consumers demand more value, better service and greater convenience, the entire supply chain must react, she concluded.
When dealers find cars at auction nowadays, they have numerous technology outlets that allow them to easily share vehicle information from the lanes with potential retail buyers, including important sales elements such as prices, history and pictures.
Munce explained virtual inventory can also cut down on days-to-turn for wholesalers, as dealers may already have found retail buyers for vehicles while still at auction.
“A blurring of the lines between manufacturer, wholesaler, distributor and retailer has created a great opportunity for you to optimize relationships with all your suppliers and vendors. The bottom line? Timely new products, streamlined operations — and greater profits for all,” Munce explained.
And in this tight used-supply environment, Munce contends digital sourcing, stocking and selling tools are becoming ever more important.
Industry developments such as direct-to-consumer sales from the wholesale side of the business “can help dealers maximize profit margins, minimize investment risk, sell more cars without buying them first, and allow for early access to inventory,” Munce said.
And today, with consumers visiting less and less dealerships before buying, few would argue it is crucial that dealers present as much product as possible to the shopping consumer in order to capture market share.
Staff Writer Joe Overby contributed to this report.
Editor's Note: For more on the latest technology and innovation in the remarketing industry, see Auto Remarketing Canada Digital Magazine's Technology issue.
ADESA Canada has chosen a new chief operating officer.
Trevor Henderson will fill the COO position, effective June 16.
Henderson, who has worked with ADESA since 2002, will report directly to ADESA president and chief executive officer Stéphane St-Hilaire.
“Our success in this marketplace is a direct result of our experienced leadership team on the ground in Canada,” said St-Hilaire. “This appointment further represents our commitment to our Canadian customers and allows us to build upon an already strong history.”
Since joining ADESA, Henderson has lead operations and technology teams in the creation, implementation and support of both business and online auto remarketing programs, the company shared.
He also played a role in the growth products such as ADESA LiveBlock and ADESA DealerBlock.
In 2008, Henderson was promoted to vice president of e-business and business development for ADESA Canada.
In 2011, he was named managing director of OPENLANE Canada, an ADESA company.
“Trevor has vast institutional knowledge of the auction business. He has proven to be a strong leader and has previously demonstrated his ability to grow our Internet-based remarking platforms. He will play an integral role developing new products and technology initiatives for our customers and our company,” said St-Hilaire.
Editor’s Note: For more information on how digital tools such as ADESA LiveBlock are moving the remarketing business forward, see the new Technology Issue of Auto Remarketing Canada Digital Magazine set to hit inboxes tomorrow.
