Auctions

Southeastern AA of Savannah culminates 10-week campaign with gift to Shriners Hospital for Children

SAVANNAH, Ga. - 

Dealers and consignors made plenty of transactions, but the organization that really cashed in recently at Southeastern Auto Auction of Savannah was Shriners Hospital for Children.

Southeastern Auto Auction of Savannah raised more than $10,000 for Shriners Hospital for Children and gave away more than $25,000 in cash and prizes to its dealer clients who participated in the auction’s fourth annual “Cars, Cash & Caring” celebration, a 10-week long event.

Auction management highlighted the Cars, Cash & Caring events were held during the auction’s weekly wholesale sales on Wednesdays and public sales held on Thursdays with the conclusion occurring on March 21 with more than 1,000 units offered. 

“The ‘Cars’ portion of the event features 10 weeks of auction sales featuring thousands of units run through our lanes,” said Bill McCready, vice president of operations.

“The ‘Cash’ refers to the cash and prizes totaling more than $25,000 as a way to thank our loyal customer base,” McCready continued. “The ‘Caring’ is the money we’ve raised from donations and 50/50 drawings throughout the year for Shriners Hospital.”

McCready said the auction was able to raise funds through the generosity of its dealers and vendors, as well as the hard work of the Southeastern team.

“We have made it our goal to blow past $10,000 and raise even more for the hospital in 2018,” he added.

Shriners Hospital for Children is committed to providing the best care for children in the specialty areas of orthopedics, burn care, spinal cord injury and cleft lip and palate, regardless of the family’s ability to pay.

Back in 1987, Wayne DeLoach, Tommy Childs, and Danny Williams purchased what was then a public auction. Today, the four-lane, wholesale auction typically runs 700 units per week with more than 350 dealer attendees. More dealers attend online using Simulcast and Edge Pipeline.

Southeastern also hosts a public sale each Thursday when about 200 units are run.

For more information, visit .


CPS honors 2 Missouri auctions

IRVINE, Calif. - 

Two independent auctions collected accolades from a consignor that specializes in originating contracts within the subprime credit space.

Consumer Portfolio Services announced its 2017 auction award winners during a private ceremony at the CAR Conference earlier this month in Las Vegas.

This year’s CPS Top Gun Award as the finance company’s Auction of the Year was awarded to 166 Auto Auction from Springfield, Mo. To qualify for this award, the finance company indicated the auction must finish the year in the top 5 for large CPS volume sales in retention, then go through the voting process of the entire internal and external CPS remarketing teams.

CPS became partners with 166 AA in late 2014 and since then, 166 AA has gone on to receive the Operational Excellence Award in 2015 and the CPS Heavy Hammer Award in 2016 prior to earning the 2017 CPS Top Gun Award.

Ace Tetlow, assistant general manager at 166 AA, said, “The team at 166 Auto Auction is honored to receive this award and grateful for the partnership we have with CPS, truly a great company to partner with at the auction level.”

The 2017 CPS Heavy Hammer Award for highest sales retention went to KCI-Kansas City Independent Auto Auction of Kansas City, Mo. The Heavy Hammer Award is awarded to one CPS partner auction in the nation who achieved the highest sales retention for the entire year.

This was KCI’s first CPS auction award after coming extremely close on many other occasions.

“It’s an honor for our KCI team to achieve this award from CPS,” said Jennifer Leocardi, who is vice president of national sales for McConkey Auction Group. “All year long, we’re discussing and implementing ways to continue to build the best market for CPS vehicles, and we have obviously set the bar high.”

CPS remarketing manager Mike Scott added, “We are extremely proud to honor our top performing auctions each year through the auction award/recognition program.

“For the 2017 awards, we saw some familiar faces at the ceremony along with many auctions earning their first CPS award,” Scott went on to say. “The competition the program creates for the auctions is terrific and to watch the auctions compete throughout the year, inquiring about how they stack up to their competition, is a testament to the commitment these auctions have to the success of CPS in the remarketing world.”

Manheim’s Johnson receives Barbara Cox Woman of the Year Award

ATLANTA - 

Now 13 years into the award program, this Cox Automotive accolade went to one of its own.

Cox Automotive presented its annual Barbara Cox Woman of the Year Award to Ellie Johnson, general manager at Manheim Statesville, representing the first time in the history of the award that it has been given to a Cox Automotive team member.

This honor is awarded to women who demonstrate business leadership and community advocacy, as well as a commitment to advancing the automotive industry. The award was presented by Cox Automotive president Sandy Schwartz during the Northwood University Dealer Education Award annual breakfast on Saturday at NADA Show 2018.

The award is named after the late Barbara Cox, a Cox Automotive owner and the mother of chairman Jim Kennedy. Two of Barbara Cox’s grandsons, Henry Parry-Okeden and Andrew Parry-Okeden, were also there as Johnson received the award. Henry is a member of the Cox Enterprises board of directors and Andrew is a member of the Cox Automotive Australia advisory board.

“Ellie is a shining example of this award, our company, and all women that have built their careers in the auto industry,” Schwartz said. “In her 30- years at Manheim, she has grown from working her family’s auctions to becoming a general manager.

“Additionally, Ellie’s involvement with professional organizations, civic groups and charitable organizations is an incredible display of giving back and serving your local communities as a professional in our company. All of us at Cox Automotive are so proud of Ellie and her accomplishments,” Schwartz went on to say.

Johnson has a lifetime of experience in the auction profession, with her father being an auctioneer and founding his own auction facility. After earning an accounting degree and real estate broker’s license, Johnson joined her father’s business which is now known as Manheim North Carolina. She served as general manager of Manheim North Carolina until 2016 when she was named general manager of Manheim Statesville.

Johnson is a former president of the National Auto Auction Association and is a member of the Carolinas Independent Automobile Dealers Association (CIADA) and the National Independent Automobile Dealers Association (NIADA).

Among her many charitable endeavors, Johnson has her auctions sponsor local FHA and 4-H programs and annual food and toy drives. In 2017, the auction gave back over $68,000 to various charity programs.

“This is an incredible honor for myself, my team and Cox Automotive,” Johnson said. “I am so blessed to work for Cox Automotive. It’s a family-owned business with the same values as the one my family started over 30 years ago.

“Growing up and living in the auto industry my entire life, I have had the opportunity to work and interact with incredible individuals and that is what has kept me moving forward throughout my career,” she added. “This award belongs to them as much as it does to me and I am thankful to everyone for it.”

Johnson is a five-time winner of the Santander Consumer USA and Chrysler Capital Asset Remarketing Awards for her work at Manheim North Carolina.

In addition to presenting the award to Johnson, Cox Automotive presented a $10,000 Barbara Cox scholarship to Mollie Arnold, a Northwood University junior studying Automotive Retail Management. Arnold is a Dean’s List student, volunteers in a number of organizations including Habitat for Humanity, St. Jude Up Till’ Dawn, and the Special Olympics, and is a Women’s Retail Network Scholarship recipient.

For more information on the Barbara Cox Woman of the Year Award, .

ADESA brings aboard new executive sales director

CARMEL, Ind. - 

ADESA, a business unit of KAR Auction Services, announced Wednesday that it has brought aboard Gil Hyder to serve as its executive sales director.

Hyder brings more than 15 years of automotive industry experience to the auction company, and most recently served as director of commercial sales for KAR business unit Insurance Auto Auctions (IAA). (KAR Auction Services reported in late February that it is pursuing a spin-off of its Insurance Auto Auctions business unit.)

At IAA, Hyder managed more than 30 national and regional accounts, according to ADESA.

“We didn’t have to search far to find our newest member of the ADESA national sales team. Gil Hyder has been a part of the KAR family of companies for more than a decade,” ADESA vice president of sales John Combs said in a news release. “He brings a wealth of industry knowledge along with many very strong relationships throughout the industry that will result in a smooth transition for our customers.”

In addition to being responsible for managing ADESA commercial client relationships, Hyder will lead commercial client efforts for both physical auction and upstream remarketing services in his new role.

TradeRev brings AI to its online car auctions

CARMEL, Ind.  - 

James Bond has “Q” for intelligence gadgetry.  

TradeRev, as it turns out, has “H.”

The online dealer-to-dealer auction platform said Monday it will launch H — a suite of artificial intelligence capabilities— at the NADA Show 2018 in Las Vegas later this week.

“TradeRev continues to push the boundaries of cloud computing to deliver a better, faster, smarter auction experience for dealers,” said Becca Polak, president of TradeRev and the chief legal officer for parent company KAR Auction Services, in a news release.

“And we’re already teaching H new capabilities, including how to auto-detect vehicle damage and even predict the severity and potential economic impact of that damage from vehicle images alone,” Polak said.

On display at NADA will be H’s automated condition report visualization tool that uses AI, several data and predictive analytics functions.

And the inspiration for the “H” name, you ask? Hopper. Grace Hopper.

A 1991 recipient of the National Medal of Technology, Hopper was a U.S. Navy rear admiral and a “trailblazer” in the world of computer programming.

In fact, she headed up the crew responsible for launching what is credited as the first compiler for computer languages, TradeRev said.

That would eventually lead to the Common Business Oriented Language, also known as “COBOL.”

“In a world of trendy tech-names, we wanted our AI to have meaning for our customers and our employees,” said Polak. “Grace Hopper was a true trailblazer and remains an inspiration for women in computing everywhere. Her drive and innovative spirit are characteristics shared and celebrated by all TradeRev employees.”

‘Auction intelligence’

TradeRev co-founder Mark Endras, who is also the chief innovation officer at KAR, says H is designed to be “hyper-focused ‘auction intelligence’ for dealers.”

This is accomplished via machine learning capabilities.

H was built by the machine learning and data science at TradeRev, and throughout the last few months, condition report data as well as thousands of images from KAR’s various marketplaces and service providers has been pumped into the platform.

“H’s machine learning instantaneously analyzes real-time mobile device camera video frames and systematically classifies them into standard condition report image categories,” Endras said. “In other words, dealers can now get a complete set of images in just seconds with increased accuracy, clarity and reliability of the resulting vehicle condition report.”

He added: “H isn’t some plug-and-play add-on; it’s an organic capability we developed over several years with meaningful input and testing from our dealer customers.”

Continued focus on data science, analytics 

The company also recently released TradeRev 4.0 in North America, providing dealers various data analytic and machine learning tools to make the auction experience easier. Among its capabilities are scheduled events for sellers, vehicle recommendations for buyers based on data and bid assist price predictability.

The launch of H and moves like this are part of a big emphasis the parent company KAR is placing on tech and analytics.

KAR announced in early February that it had purchased STRATIM, a mobility and fleet management software company.

It’s a move that gives KAR a strong foothold in the world of on-demand car- and ride-sharing services, urban commute providers and autonomous vehicles — a world in which many of KAR’s customers already take part.

Through real-time data and predictive analytics, STRATIM’s software digitizes fleet management and helps streamline operations for mobility service providers, KAR said in a news release announcing the purchase.

And last year, KAR purchased DRIVIN, in a move that gave the company a major boost on the data science and analytics front.

Editor's Note: See more from TradeRev at the , where it is a presenting sponsor, and the , where Polak will deliver the opening keynote. 

 

Late-model auction volume slows in February

CARY, N.C. - 

The used-car industry is seeing some easing in the volumes of late-model vehicles at auction, according to the latest Guidelines report from J.D. Power Valuation Services.

Through two months of the year, late-model auction volume is down 5.8 percent, the report said. In February alone, it was down 11.5 percent year-over-year.

Last month’s late-model volume was also down 8.8 percent from January, J.D. Power said.

Many of the late-model vehicles in the used-car ecosystem, at least recently, have been vehicles coming out of leases.

Cox Automotive is anticipating 3.89 million off-lease units in 2018, which would be up from 3.59 million in 2017. While that’s more than an 8-percent hike, the growth in off-lease volume is slowing down a bit.

Off-lease volume in 2017 was up more than 16 percent, following a gain of more than 22 percent in 2016, according to data in a Cox Automotive presentation. Still, 2018 is expected to be a record year for lease returns, according to Edmunds.

It could also be another record year for certified pre-owned sales, helped in good part by that off-lease volume, which tends to be the bread-and-butter of CPO inventory.

While February falls short, March wholesale price forecast reflects uptick

McLEAN, Va. - 

February wholesale prices didn’t hold up quite as much as the analyst team at J.D. Power Valuation Services expected. But the group thinks March performance will fall in line with what the firm typically has seen during the third month of a year.

According to the latest installment of Guidelines, March wholesale prices for vehicles up to 8 years old are projected to increase by 1.2 percent. Should that forecast hold, it would be nearly identical to the 1.6-percent lift analyst recorded during March of last year.

J.D. Power Valuation Services also is standing pat on its full-year price prediction, saying the prices are likely to dip by 1.5 percent by the time 2018 concludes.

Meanwhile, in February, analysts indicated February wholesale prices “weren’t quite as strong as originally anticipated,” as they edged 0.2 percent lower year-over-year. The February figure still was an improvement over what J.D. Power Valuation Services spotted in February 2017 when analysts recorded a 0.9 percent softening.

The latest price movement left the J.D. Power Valuation Services Seasonally Adjusted Used Vehicle Price Index at 114.5 in February, representing an uptick of 0.2 percent.

For the second month in a row, analysts discovered that the large utility segment experienced the largest wholesale price drop within the mainstream side of the market. J.D. Power Valuation Services pegged the February decline at 2.1 percent. Last February, this segment sustained a 1.6 percent decrease. Driving the recent drop is a 26.7-percent jump in auction volume for these units.

J.D. Power Valuation Services also mentioned large pickup prices now have declined for five consecutive months courtesy of a 0.6-percent softening in February.

Conversely within the mainstream side, analysts noted compact car prices ticked up by 0.8 percent as prices stayed strong for midsize cars “because of federal tax returns.”

Per the Internal Revenue Service, J.D. Power Valuation Services relayed that the total number of federal tax refunds issued through mid-February sat 2.9 percent lower than at the same juncture last year. But the IRS noted that the average refund of $3,169 is 1 percent higher year-over-year.

“As a result, there were likely fewer of these shoppers in the marketplace last month armed with down payments,” analysts said in the latest Guidelines.

Moving over the premium side of the wholesale space, J.D. Power Valuation Services indicated that segment losses were led by luxury compact utilities, which suffered a 2.4-percent price reduction in February.

While analyst spotted other luxury segment with roughly a 2-percent price decline in February, they also pointed out that luxury large car prices actually rose 1 percent.

“Over the past five Februarys, prices for the segment have decline by about 5 percent,” J.D. Power Valuation Services said. “It’s important to remember this is an extremely low-volume segment so any significant price movement from month-to-month on any model can have a powerful impact on the group’s overall price movement.

“An example of this would be the 3.7-percent increase in 2014 and 2015 Hyundai Equus wholesale prices observed over the period,” the firm added.

David Paris, executive analyst at J.D. Power Valuation Services, discussed market trends in as well as at the top of the page.

 

A closer look at KAR’s proposed IAA spin-off

CARMEL, Ind.  - 

In many ways, the spin-off of Insurance Auto Auctions that KAR Auction Services is pursuing comes down to simplifying things.

That is, for both investors and the entities themselves.

KAR made the announcement in late February, explaining that the proposed tax-free spin-off is designed to “increase shareholder value and focus each company’s strategic priorities on its respective marketplace and unique customers.”

KAR said in the February announcement that it would likely close within 12 months.

The proposed separation would result in two independent, publicly traded companies: KAR Auction Services and Insurance Auto Auctions.

IAA would retain its North American salvage operations and the UK’s HBC Vehicle Services business. The remainder of the KAR portfolio would stay within KAR.

The day after the announcement, KAR chief executive officer Jim Hallett and chief financial officer Eric Loughmiller held an investor conference call to explain more details about the separation.

Reasons behind move

Both KAR and IAA have “grown to levels that will allow them to succeed independently,” Hallett said when looking at the rationale behind the move.

“Both have sufficient size and resources,” he said. “We believe that each entity will be able to have an independent capital allocation priority, and the respective businesses will operate in independent markets, with minimum overlap.

“The separation will simplify what investors have told us is a very complex business model, and investors can now choose to invest in both companies or focus on one or the other,” Hallett said.

A slide presentation that Hallett and Loughmiller went through during the call included key investment highlights for KAR (which was also referred to as “RemainCo” in that presentation and call; IAA was also referred to as “SpinCo.”)

Those highlights emphasized KAR’s position as a “Pure-play wholesale service provider with a leading market position in the U.S. and Canada,” while also touching on the company’s growth potential in both digital and data analytics as well as global and market expansion.

It also touched on what KAR described as an “attractive financial profile with revenue growth and EBITDA margin expansion opportunity” — and a management team with experience.

“The separation will simplify our story and allow clarity around our strategy and future growth opportunities,” Hallett said. “The key elements of KAR’s current strategy are focused on RemainCo, in particular data and analytics, as well as the digital transformation of the auction industry, (which) is most impactful on our whole-car business.

“RemainCo will focus on growth outside of North America, and RemainCo will generate significant cash flows with strong top line and bottom line growth attributes,” Hallett said.

IAA in good shape

As for IAA, Hallett emphasized the company is “well-positioned.”

There has been an increase in miles driven, Hallett said. This can push the need for companies like IAA, which provide the salvage car services needed when auto accidents increase amid such a boost in mileage.

“Insurance industries are focusing on reducing net claims costs, which leads to more total losses,” Hallett said. “And an aging car park, improving commodity prices and a weakening U.S. dollar all favor the Insurance Auto Auctions business.”

Additionally, Loughmiller said the IAA spinoff “will allow investors to focus on a less complex business model that has a clear capital allocation plan to support its growth and create shareholder value.”

Turning to the investment highlights of IAA, Hallett noted: “The separation will create a pure-play salvage auction business with a direct comp. The salvage industry has strong business fundamentals with several tailwinds.

“We have key relationships in place, and the salvage industry continues to consolidate into two major players. Insurance Auto Auctions has an excellent track record, and we have a management team in place and ready to lead SpinCo,” he said. “We have a few holes to fill as an independent publicly traded company.”

One of those would be the need to bring in CFO with public company experience for IAA.

“Other than that, I think (IAA president and CEO) John (Kett) would tell you he’s ready to roll,” Hallett said.

Kett will remain president and CEO of IAA, and KAR’s management team will remain intact following the spinoff.

Why now?

During the Q&A portion of the call, one of the questions the KAR executives received related to the timing of the spinoff.

“As we look at these businesses, we’re very, very pleased with the way we’ve managed this business over the past 11 years. Proud of the way we’ve built the business,” Hallett said. “And it’s just the case where we feel, No. 1, that both businesses have grown to a size and a strength that we think they can stand alone.

“And we think that we have a management team that is very much in a position to take the lead as we separate these companies,” he said.

Overlap with ADESA, IAA, etc.

Another question posed to KAR management dealt with potential overlap between the shared infrastructure, technology and costs of the ADESA auctions and the IAA auctions.

Loughmiller emphasized the “minimal overlap” that Hallett had referred to earlier in the call.

“Where we have provided a shared services type of environment tends to be in HR, some finance functions,” Loughmiller said. “And the truth is, we operate separate accounting systems for the two businesses, with separate customer bases and separate operations, so I don’t view that as a complexity. But in the admin area, there will be a few things, and we think those will be easy to deal with.”

Along similar lines, they addressed KAR’s Automotive Finance Corp., where the salvage side has a “relatively small” piece of the pie, Hallett said. He mentioned that AFC plans to continue providing its services to the IAA entity.

Make it six straight weeks of car prices outperforming truck values

LAWRENCEVILLE, Ga. - 

As you know if you’ve filled out a bracket for the NCAA tournament, basketball teams such as Villanova, Duke and Kentucky will need six victories in a row to claim a national championship.

Or a similar streak that Black Book has seen involving wholesale prices of cars versus trucks.

The latest Black Book Market Insights report highlighted that cars have outperformed trucks in price changes for six straight weeks. The report illustrated the continued strength displayed by a handful of car segments such as subcompact, compact and sporty cars.

“The spring market continues, especially for small cars and older units. Sporty cars are also starting to experience a seasonal lift in demand as warmer weather arrives,” said Anil Goyal, executive vice president of operations at Black Book.

Volume-weighted, editors determined overall car segment values declined by only 0.14 percent last week. In comparison, the market values had decreased on average by 0.18 percent per week in the previous four weeks.

Within cars, Black Book reiterated the sporty car and sub-compact car segments performed the best, with values increasing by 0.20 percent and 0.08 percent, respectively, last week.

Again examining volume-weighted data, editors found that overall truck segment values — including pickups, SUVs and vans — softened by 0.22 percent last week; an improvement compared to the average decrease of 0.30 percent per week during the previous four weeks.

Among trucks, Black Book found that the full-size luxury crossover/SUV and compact van segments performed the worst with values declining by 0.66 percent and 0.47 percent, respectively, last week.

Turning next to what Black Book editors and personnel who attended about 60 sales throughout the country, anecdotes showed a wide array of activity — sort of how your bracket might look after the opening weekend of the NCAA tournament.

“The sale started off really well with a high percentage of sold units. Full-size trucks and midsize SUVs were the best sellers,” Black Book’s lane watcher in Illinois shared.

Not far away in Michigan, the story was a bit different.

“The market is still lagging here. It was a little bit better today, but customer traffic at the dealerships is below normal. We also can’t seem to get a break with the cold, wet weather,” the representative stationed in Michigan said.

Down in Georgia, the recap was: “Subcompacts and small SUVs performed much better than last week. Buyers complained that prices are too high on older units.”

Sliding out West, the upbeat mood was more evident.

“Best sale here in some time,” Black Book’s lane watcher in Colorado said. “The attendance was good as were the sales percentages. We are seeing a spring market turn for the better.”

Finally out in California, the observer noted, “We had a really strong sale despite the presence of poor weather. The retail demand is back as witnessed by the active bidding.”

Roundup: SGS previews new self-inspection app at CAR; Central AA holds 12-year anniversary sale

CINCINNATI and HAMDEN, Conn. - 

SGS recently previewed its new self-inspection mobile application — INSPEC — at the Conference of Automotive Remarketing (CAR) in Las Vegas.

The INSPEC app allows the capture of specific data, such as mileage and vehicle modifications ahead of vehicle turn-in and is now being offered as a pilot, hybrid or standalone solution.

When a vehicle lease nears its end, the app provides step-by-step instructions for the lessee to perform a self-inspection.

To note any damage or level of wear and use, the app allows lessees to take photos of the exterior, interior and tires that is pushed to the lessee and finance company.

“Our inspectors are performing full remarketing inspections prior to lease maturity when a third to half of these cars are either traded in early or bought outright prior to the turn-in date,” SGS operations vice president Tony Perkins said in a news release.

“This means our customers are wasting a lot of money on an expensive remarketing inspection that isn’t needed. By providing a more consumer-friendly inspection option, we believe INSPEC will help our customers drastically increase pre-term inspection rates, replacing the number of costly in-person inspections with an affordable alternative, all while lowering the overall cost of their program, improving the lease-end experience, and increasing brand loyalty,” he continued.

Along with producing a summary of self-inspection results, the app also provides an estimated range for how much might be owed for a vehicle at turn-in.

Estimates are calculated based on a proprietary algorithm from SGS, and the inspection can be completed in less than 20 minutes, according to the company.

Key benefits the app can provide finance companies, dealers and OEMs include reduced inspection costs, increased percentage of fleet inspected and retention of key insights and actionable data.

Central AA celebrates 12 years

In other news from the used-car market, Central Auto Auction held a 12-year anniversary sale last month where it also celebrated the opening of a brand-new fourth lane that is expected to be ready later this year.

The sale brought in 366 buyers and offered around 450 units across the auction’s three lanes.

“We are very much hands-on with our consignors and buyers. We are an extension of their team; their staff essentially,” Central AA owner Peter Saldamarco said in a news release. “We have the best auction employees in the business, and with our new full-service vehicle evaluation and enhancement center, there’s nothing we can’t handle for our customers.”

Central AA held its first sale in February of 2006. Located in Hamden, Conn., the auction offers weekly sales Tuesday mornings at 10:15 a.m., and all lanes are available for online participation via simulcast.

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