Auctions

NAAA names chapter auctions of year in Midwest & South

FREDERICK, Md. - 

The National Auto Auction Association recently announced that Clark County Auto Auction and Charleston Auto Auction have both been named Auto Auction of the Year within their respective chapters, following nominations from local school leaders.

The award was established last year to honor the charitable acts auctions perform each year and to encourage volunteer outreach. The two auctions will join other chapter finalists competing to win NAAA's 2017 Auto Auction of the Year Award for Excellence in Community Service.

In November, each finalist will be recognized at the NAAA Convention — which is being held in — with a crystal trophy and a $5,000 prize for a charity of the auction's choice.

The winner receives a large crystal loving cup, a feature story in both NAAA's On The Block magazine and annual Membership Directory, as well as a $20,000 donation to the charity of the auction's choice.

Midwest chapter auction donates $2M real estate

Greater Clark County Schools nominated Clark County Auto Auction, NAAA Midwest Chapter Auto Auction of the Year, following a recent contribution of its property worth more than $2 million.

The auction donated its former 5-acre site and 14,000-square-foot facility to the school system.

The school system named its Mark Fetter Center for Professional Learning after Clark County Auto Auctions late co-founder. Currently, the center has space for training 750 teachers.

"It's with pride that I announce Clark County Auto Auction as the Midwest Chapter's choice for Auto Auction of the Year during our celebration of National Auto Auction Week because they embody the long tradition of our membership's benevolent work and public service," NAAA Midwest chapter president Kristie Goben said in a news release.

Since 1982, the auction has raised more than $2.5 million in support of nonprofit projects, according to NAAA. 

"The compassionate employees who make up Clark County Auto Auction are deeply devoted and enthusiastic to volunteer and make a positive impact in their community each and every day," said Matt Fetter, Clark County Auto Auction president. "From the time we opened our doors, striving to make the world a better place has become our staple, our mission and a large portion of our company DNA."

Southern chapter auction supports homeless teens

Meanwhile, Charleston Auto Auction has been named the NAAA’s 2017 Southern Chapter Auto Auction of the Year following a nomination from the Charleston County School District.

NAAA said the school district nominated the auction for its efforts to help support 21 homeless students at R.B. Stall High School.

"As we celebrate National Auto Auction Week I'm proud to announce Charleston Auto Auction as our candidate for NAAA's Auto Auction of the Year," NAAA Southern chapter president Doug Rodriguez said. "All our entrants deserve recognition for their public service, but none touched us more than Charleston Auto Auction. Their dedication to helping homeless teens, who were couch surfing or sleeping on benches at the mall and had no idea where their next meal would come from, have a safe place to live so they could focus on school was heartwarming."

After seeing a news story on TV about Project H.O.M.E., a proposed project to house several homeless high schoolers with surrogate parents who would provide stability and consistency, Charleston Auto Auction assistant general manager Jason Moritz wanted to help, according to NAAA.

In support of Project H.O.M.E, the auction organized a special month-long sale where it partnered with its dealers to donate a percentage of any vehicle bought or sold to raise money for the construction of a house.

Following the sale, additional fundraising efforts on behalf of the auction garnered more than $26,000 for the project.

Project H.O.M.E now has a goal to begin housing students this fall, according to NAAA.

"They continue to be a driving force behind this project," Project H.O.M.E creator and Charleston County School District secondary education community executive director Kim Wilson. "They've taken an active role in making this home their mission with the auction's General Manager Laura Taylor and Jason joining our board of directors. They also speak to businesses and groups in the community to encourage involvement. It's people like the management and employees at Charleston Auto Auction who see a need and take action that make a difference in this world."

NAAA said other causes the auction supports includes a local food bank, an orphan group, animal shelter and camp program for ill children.



July price movements follow historical trends

McLEAN, Va. - 

Along with looking ahead to how prices might move in August, analysts at J.D. Power Valuation Services determined that July’s wholesale depreciation matched historical trends.

According to the latest issue of Guidelines, analysts reported that the wholesale prices of used vehicles up to 8 years in age fell by 2 percent in July, mirroring what J.D. Power Valuation Services expected to happen. During the past five years, analysts pointed out that July movements regularly have come in at 2.1 percent, leaving the latest development in line with those historical trends.

As a result of July’s reading, the J.D. Power Valuation Services’ Used Vehicle Price Index dipped slightly by 0.7 percent to land at 110.4. What analysts classified in the report as the “consistent chipping away of prices month-over-month” has pushed the index 7.1 percent lower through July as compared to the first seven months of last year.

For reference, the report noted the index reading in July of last year sat at 119.1.

When it comes to what might happen in August, David Paris, executive analyst at J.D. Power Valuation Services, shared the firm’s projection.

“This August, we forecast wholesale prices of vehicles up to 8 years in age to drop about 2.6 percent, which would be the same as August 2016,” Paris said. “For the year, we believe used prices will decline by 6.5 percent, which is 2.5 points worse than 2016’s 4-percent loss.”

The report added that looking even further down the road, J.D. Power Valuation Services is expecting that wholesale prices should decelerate to about 3 percent in 2018.

More details on July price movements

Drilling down into J.D. Power Valuation Services’ data, the report showed car prices moved most significantly when looking at information at the segment level.

“This is a continuation of the now long-running trend where mainstream car losses outpace those of their truck and SUV counterparts,” analysts said.

Three car segments in particular were among the greatest declines in the report as compact cars, midsize cars and large cars softened by 3.4 percent, 3.1 percent and 2.8 percent, respectively.

Analysts pointed out that subcompact car values performed a bit better than that group (declining by 2.2 percent) in part because of tighter supply of these units. The report indicated supply of late-model subcompact cars is off by 8.1 percent year-to-date.

The report went on to mention losses for large utilities were more pronounced in July (down 1.5 percent) versus the same month in 2015 when the value of these units actually ticked up 0.6 percent, and a year ago when losses only registered in at 0.3 percent. Analysts noted what could be impacted this segment is a surge in late-model supply, which is 11.8 percent higher year-to-date.

Also of note, analysts mentioned prices for large pickups remained strong in July as values for units in this segment haven’t fallen more than 1 percent during a single month since last December.



Late-model auction volume down in July, but still up from 2016

CARY, N.C. - 

There was a double-digit slide in the auction volume of late-model vehicles from June to July — but that’s typical for summer, J.D. Power said in a report this week.

And what’s more, late-model auction volume was up more than 7 percent year-to-date through July.

According to the latest Guidelines report from J.D. Power Valuation Services, auction volume was at 208,736 for vehicles 3 years old or newer in July. That was down 16.4 percent month-over-month, a decline that J.D. Power called “common for this time of year.”

In seven months, late-model auction volume has amassed 1.68 million units, compared to 1.57 million in the same time frame of 2016, J.D. Power shared.

Trucks and SUVs are leading the auction volume gains, with luxury compact utility vehicles climbing 55 percent to top the list and midsize pickups jumping 35.7 percent.

The most significant decreases have been among the luxury midsize cars (down 22.6 percent) and large cars (down 12.5 percent).

Cars have a 54 percent share of auction volume, with trucks at 46 percent. J.D. Power points out this is the opposite of new-car sales, where trucks are dominating.

Looking at the overall auction market, sales were up 2 percent in the first half of the year, according to KAR Auction Services and AuctionNet analysis cited by AuSM correspondent Arlena Sawyers in this story.

National Auto Auction Association chief economist Ira Silver is forecasting more than 10 million auction sales this year, which would be a new record, the same story indicates.

 



4 upgrades made to Manheim Market Report

ATLANTA - 

Cox Automotive said Wednesday that its Manheim Market Report has been upgraded with a “sweeping set of enhancements” designed to streamline remarketing and provide more in-depth information.

The four upgrades to Manheim Market Report include:

  • An adjusted, more specific valuation on vehicles that includes AutoGrade condition and exterior color, vehicle mileage and region. Clients are able to generate the Adjusted MMR by manually punching in the car’s condition, color, mileage and region. Starting in September, the mileage/color/condition will pop up automatically, and clients can select the region. The company said the Adjusted MMR brings more accuracy to the valuation and can boost confidence in online transactions.
     
  • OEM build data. Manheim claims the MMR is the first valuation tool to use OEM build data to decode VINs, which it says “eliminates the guesswork in VIN-decoding” and drives accuracy.
     
  • A more intuitive interface with additional data.
     
  • A new Valuations API, which offers the aforementioned OEM build data and on-demand access to Adjusted MMR values.

“Our recent improvements are receiving rave reviews from both buyers and sellers,” Ed Berkowitz, who is vice president of product management for Cox Automotive Inventory Solutions, said in a news release.  

“With richer data, increased accuracy, and a more insightful view, the enhanced MMR experience helps buyers and sellers better understand a particular vehicle’s value and make faster strategic decisions,” he added.

 

 



ADESA names 2 executive sales directors

CARMEL, Ind. - 

ADESA announced Tuesday that it has brought on two new members to join its sales team.

Angela Williams and Kirk Archer have joined the company as executive sales directors.

Williams most recently served as the business development and marketing manager for Rawls Auto Auction in Leesville, S.C.

“Angela brings more than 20 years of auto auction industry experience to the commercial sales team,” ADESA vice president of commercial sales John Combs said in a news release. “Angela brings a wealth of industry knowledge, auction management experience, and previous work alongside intuitional clients to the position. She’ll hit the ground running to help our commercial customers navigate the changes and challenges of our marketplace.”

Williams joined Rawls AA in 1990 as a part-time block clerk and in 1996, she took on a full-time role within the fleet/lease department.

She was later promoted to fleet/lease manager and then assistant general manager in 2005.

Meanwhile, Archer most recently served as director of commercial sales at Insurance Auto Auctions.

“Kirk’s wide-ranging experience at IAA and the relationships he’s developed over the past decade will be valuable assets to our company and our customers,” Combs said. “He brings a unique view of the remarketing landscape across both the whole car and salvage car marketplaces. We’re extremely pleased to have Kirk join our national sales team and look forward to his many contributions.”

Archer joined IAA as an auction coordinator in 2007 and was later promoted to divisional sales manager, according to ADESA.



IAA expands for severe weather season

CARY, N.C. - 

Insurance Auto Auctions, a business unit of KAR Auction Services, announced Wednesday it has expanded locations in six states to both address clients’ increased inventory needs due to more claims being deemed total losses and to plan for a projected rise in salvage volume following the upcoming weather event season.

The company’s new land additions total 50 acres. Together, the six expanded locations now cover more than 200 acres of land, an increase of more than 30 percent, according to IAA.

This follows IAA's Aug. 7 announcement that it also recently secured 22 real estate locations in 10 states to prepare for potential catastrophic events this year.

The 22 expansions include branches in California, Florida, Georgia, Louisiana, Minnesota, Mississippi, New Jersey, New York, South Carolina and Texas.

IAA said the newly acquired land across the several states amounts to over 500 acres.

'Proactive approach' 

Shortly after that Aug. 7 news was announced, AuSM caught up with IAA chief executive officer and president John Kett.  

"We are taking a very proactive approach to obtaining land in areas that are prone to weather related events, rather than waiting on the event to occur and then having to go out to find additional property," Kett said during a phone interview with AuSM.

In the South, Kett explained, there have recently been storms that have produced modest levels of flood damaged vehicles this year but "so far there’s nothing brewing that we can see right now," he said.

"We are just entering what is referred to as hurricane season, I think technically it starts in June but it’s rare to see anything. August, September and October is the typical time when you would see a hurricane, which is the most prominent manifestation of a catastrophe that we would help deal with," he said.

Following strategic preparation and coordination, IAA acquired the expanded locations to ensure that IAA's catastrophe (CAT) response services team will have the appropriate resources to help clients with weather associated losses, according to the company.

"Strategically expanding our presence helps meet demands for CAT services in areas where our customers will most urgently need it," Kett said in the Aug. 7 news release. 

The CAT team has been in operation for over 30 years, according to IAA.

Last year, the IAA CAT response team was notably active due to a high number of weather related events, according to Kett.

"There were several significant hail storms in Texas, there was a really significant rain storm in Baton Rouge just about a year ago," Kett said in the phone interview. "In early August, 28 inches of rain fell within a very short period of time. There were thousands and thousands of vehicles that were underwater and therefore declared a total loss."

Kett added that Hurricane Matthew, which hit land up in the mid-Atlantic, was specifically memorable because it reached 4 or 5 states.

"It was nowhere near the size or scale of Sandy. 2016 was by far the most active year we saw in terms of weather related events," he said.

KAR Auction Services chief executive officer Jim Hallett said in 2013 that Superstorm Sandy was the most catastrophic event in IAA's history.

The company reported a total-loss of more than 50,000 vehicles following the United States’ second most costly hurricane.

In addition to preparedness, technology is vital to IAA's ability to effectively assist clients on short notice, Kett said.

"We need to do all the things that we do to help when we do process a vehicle for one of our customers," he explained.

The initial step of the processing process includes tracking damaged vehicles, recording them, and taking pictures of them.

"As part of our overall technology investment, we have a view towards making sure that the technology that we do deploy is flexible so that we can implement it in a way that we can use it very quickly because of the time sensitivity of responding to these things," Kett said.

Technology can make delivering support faster, easier and more efficient if it’s properly deployed, according to Kett.

"The combination of our broad physical presence and integrated technology solutions also helps us serve and expand our buyer-base and provide them with greater choice and convenience," added Kett.

Wednesday's addition

Going back to the most recent news, IAA's six expanded facilities announced on Wednesday include IAA Indianapolis (Ind.); IAA Kansas City (Kan.); IAA Salt Lake City (Utah); IAA Minneapolis/St. Paul (Minn.); IAA Fredericksburg-South (Va.); and IAA Dothan (Ala.).

"The forecast for salvage volumes combined with the challenges of supporting our insurance customers during catastrophic events is driving the expansion activities in various Insurance Auto Auction markets," Hallett said during the company’s latest earnings call last week.

For more information about the expanded branches’ hours and locations, visit .



Manheim kicks off its auction week celebration

ATLANTA - 

Manheim locations across the county are currently celebrating National Auto Auction Week.

Throughout the week, the company said it will use Facebook and Twitter to showcase local auction activities.

The week of celebration wraps up on Friday.

“National Auto Auction Week is a great time to reflect on the commitment that our team members and loyal clients exhibit every day in driving this industry forward,” Cox Automotive Inventory Solutions president Janet Barnard said in a news release.

“Our industry continues to thrive, and at Manheim, we’re excited to play a key role in furthering its growth and transformation by delivering an easier and faster experience for our clients.”

In addition to promoting upcoming local auction activities, Manheim’s Facebook and Twitter pages will also feature messages of thanks to Manheim team members and clients, according to the company.

“National Auto Auction Week is a terrific opportunity to recognize the strength of our industry and the immense value auto auctions provide,” added Grace Huang, senior vice president of Inventory Services for Manheim.

“I want to sincerely thank our team members who keep the show running smoothly at Manheim and our clients who enable us to succeed in an industry we truly love.”

National Auto Auction Week is sponsored by the National Auto Auction Association.

for more information about National Auto Auction Week.



Overall wholesale prices sag as truck supply tightens

LAWRENCEVILLE, Ga. - 

While it appears dealers are having trouble fulfilling one specific segment on their inventory shopping lists, Black Book’s latest price update indicated dealers aren’t paying quite as much when they do find the units they want.

The newest Black Book Market Insights report showed an increase in wholesale vehicle depreciation, especially in the car segments. Although cars had a higher depreciation percentage overall, editors noticed the compact van category for trucks saw the highest depreciation out of all vehicle categories with a 1.74 percent decline in value.

“The wholesale vehicle market experienced broad declines last week across most vehicle segments,” said Anil Goyal, Black Book’s senior vice president of automotive valuation and analytics, one of the many experts set to be a part of this year’s , which runs from Nov. 13 through 17 in Palm Springs, Calif.

According to volume-weighted data, editors determined overall car segment values decreased by 0.58 percent last week, higher than the average weekly decrease of 0.43 percent in values spotted during the previous four weeks.

Black Book found that the prestige luxury car, sporty car and sub-compact car segments declined the most by 1.03 percent, 0.89 percent and 0.78 percent, respectively.

Again considering volume-weighted information, editors reported that overall truck segment values — including pickups, SUVs and vans — softened by 0.40 percent last week; a figure more than than the average weekly decrease of 0.28 percent in values registered in the previous four weeks.

As previously noted, compact vans declined the most at 1.74 percent, while the small pickup segment wasn’t far off with a drop of 1.46 percent.

So now that we know the movements associated with what dealers are paying, what about what they’re seeing coming down the lanes and how they want to stock their lots? The anecdotes Black Book’s representatives at the auctions provided gave a pretty clear picture of what’s happening nowadays.

Starting in Tennessee, Black Book’s observer said, “Used-vehicle retail remains OK, but dealers are struggling to get nice trades. They are all in need of quality used pickup trucks, which are especially difficult to find.”

Down in Florida, the truck story continued with the lane watcher saying, “We had a good auction this week. There were more no-sales on trucks as consignors were holding out for ‘home run’ money due to the low supply.”

While not specifically mentioning trucks, Black Book’s personnel stationed in Colorado reported, “Inventory is low at the auctions so, in turn, the conversion percentages are good.”

Continuing out West, the story in California was, “The no-sales here were mostly due to over-valued higher mileage units.”

Wrapping up in Michigan, lane observers heard from dealers about another segment in the sales calendar as the recap indicated, “We are starting to see the annual back-to-school activity in the lower-priced units. This typically lasts for three or four weeks here.”



Role of auctions in Penske’s standalone store strategy

BLOOMFIELD HILLS, Mich. - 

The method Penske Automotive Group plans to continue using to fill inventories at CarSense — its standalone used-vehicle retail locations primarily in the Northeast with intensions on expanding — should delight auction general managers who see buyers for this dealer group mingle in their lanes.

Chairman Roger Penske said during the company’s latest conference call that about 80 percent of the vehicles CarSense stocks comes from auctions.

Penske also pointed to expected lifts in off-lease volume coming in 2018, 2019 and 2020 to help these CarSense locations that depend on Penske buyers with specific instructions on how to procure inventory, which currently sits at about 45 days’ supply.

“Well, I think we have to say that auction prices on a daily basis demonstrate the real value of the vehicles,” Penske told conference call participants. “So, we have a number of buyers and they’re out there looking at the marketplace.

“They have metrics that they’re looking at certain models, certain colors and markets that have been selling. So they have a past history. So they’re prepared to pay a particular price for these vehicles, and I think that we only buy the car if we want to fill in certain types of cars,” he said.

“In fact, I looked at some metrics during the week and it showed certain models that they were long on and certain models they were short,” Penske continued.

“So, they actually just don’t buy just cars. They buy specific models, and obviously we have a mix of SUVs and trucks along with cars,” he said. “Our customer is looking for a vehicle that’s probably 1 to 4 years old. The average selling price in the U.S. is $20,000. So we have a pretty good mix of vehicles. To me, we’re in a position to purchase many of these off-lease vehicles that come in, and the auctions today are ones that they offer this opportunity.

“There are some closed auctions for dealerships, and then obviously after that, we have the open auction opportunity to buy those vehicles, and then this helps us as we go forward. We manage our variable costs associated with these purchases,” he added.

The company reported that CarSense locations and CarShop operations — a similar standalone concept in the United Kingdom — retailed 11,125 vehicles during the second quarter, generating $193 million in revenue and $33 million in gross profit for Penske.

“We believe these used-vehicle supercenters further diversify Penske Automotive Group’s business and provide an opportunity to capitalize on the highly fragmented used-vehicle market,” the chairman said.

“We also believe these businesses provide an unlimited white space for scalable expansion. We have plans to expand into several new markets and continue to expect to double the number of locations within 24 months,” Penske added.

Penske also addressed a question about whether the company would establish its own finance company to serve as a captive-like provider for CarSense and CarShop locations; similar to what CarMax has in place.

“Well, I think if you look at CarMax, bottom line, they have a big impact with their financing,” Penske said. “They’ve done a terrific job. Right now, we’re using third-party financing and third party for the products that we sell.

“I don't know that at the moment that we have the capital available to start a finance company,” he continued. “It’s something we can look at once we have a history and maybe we get a partner to do something like that. But the good news is it’s an opportunity because we’ve seen the success that CarMax has.

“We just have to assess the risk on that if we go into that area, but I wouldn’t say that’s top of the list right now,” Penske added.

Online sales activities

With consumer trends pointing to more potential buyers wanting to complete deliveries mostly or even completely online, Penske shared an update about the company’s platform designed to do that. For the past 12 months, Penske has developed what it has been dubbed Preferred Purchase.  

Penske highlighted Preferred Purchase is now available at all of the dealer group’s stores.

“We think that this is an opportunity to reduce the cycle time for customers to buy a vehicle,” he told conference call participants. “I think that the closing rate as we look at this probably is three times higher than a normal purchase.

“And you, as a customer, can pick the vehicle, you can also supply your trade information, we'll give you a purchase price on your trade, you can look at a lease, you can look at a finance transaction and then you can call us obviously to complete it,” Penske continued.

Penske also highlighted that the closing rate for group customers using Preferred Purchase hit 24 percent in June. The chairman assured investors that Preferred Purchase can give the company the tool to compete with new industry participants such as Carvana and Shift.

“So when we look at it overall, this is the same thing that people are talking about, and we have it in place for every one of our dealerships,” Penske said. “I think that this will give us the ability to do this across all of our businesses and there’s no question that we continue to enhance this to make it quicker and more transparent to the customer.”



Cox Automotive confirms workforce reduction

CARY, N.C. - 

AuSM confirmed multiple online reports from Atlanta-area media outlets that Cox Automotive is reducing its global workforce by nearly 1,000 employees, but the company said it does not “anticipate any additional large-scale reductions.”

The reports first surfaced late on Friday afternoon, and Cox Automotive corporate spokesperson Lou Laste replied to a Monday morning inquiry that the company would cut its staff by approximately 950 team members, which is about 3 percent of Cox Automotive’s total workforce. 

“These changes, while difficult, will help us fuel more innovation, drive more growth and deliver the elegant, connected experience we’ve promised to our clients and the industry,” Laste said in the message. “We do not take these decisions about job impacts lightly and will remain true to our values, treating everyone with dignity, fairness and respect throughout this process. 

“We are committed to moving quickly to build a stronger and more agile organization that gives us the best chance to succeed well into the future,” he continued.

As was the case in reports published by the — part of Cox Media — as well as the , Cox Automotive did not specify which segments of its businesses will endure reductions. Cox Automotive’s global presence includes:

—Alliance Inspection Management (AIM)
—AutoSt
—Autotrader
—BitAuto
—Cars Guide
—CentralDispatch
—Dealer-Auction.com
—Dealer.com
—Dealertrack
—DealShield
—HomeNet Automotive
—Incadea
—Jingzhengu
—Kelley Blue Book
—Mahindra First Choice
—Manheim
—Modix
—Motors.co.uk
—NextGear Capital
—Ready Logistics
—RMS Automotive
—vAuto
—VinSolutions
—xtime

“We have been very thoughtful and strategic in identifying the roles across all departments that need to be reduced along while making sure we have the capabilities to best serve our clients for the future,” Laste said.

“At this time, we do not anticipate any additional large-scale reductions. That said, our business and the market continue to evolve, and therefore we are never able to guarantee that a role will not change or be eliminated in the future,” he went on to say.



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