Greenlight Remarketing - Inside Lane

GREENLIGHT
ISSUE 21
DRIVING GROWTH FOR THE REMARKETING PROFESSIONAL
EXPORT
EXPERTS
Foreign buyers take
advantage of U.S. prices as
exports of used cars rise. P4
INVENTORY MANAGEMENT
TOOLS TO KEEP YOUR
WHEELS TURNING P9
ADESA’S NEW
PRESIDENT TALKS
MOBILE TECHNOLOGY P8
ON QUALITY SERVICE PRICE VALUE SATISFACTION ADF
ACTION QUALITY PERFORMANCE SERVICE PRICE VALUE
RMANCE SATISFACTION 1. SELECTION QUALITY SERVICE
UE 2. PERFORMANCE SANTANDER 7 SELECTION QUALI
RICE PERFORMANCE SATISFACTION 3. VALUE SELECTIO
Y SERVICE PRICE VALUE PERFORMANCE SATISFACTION
TION QUALITY SERVICE VALUE PRICE PERFORPERFOR
ACTION SELECTION QUALITY VALUE SERVICE QUALITY
ON QUALITY SERVICE PRICE VALUE SATISFACTION ADF
ANCE SATISFACTION PRICE SELECTION QUALITY SERVI
UE PERFORMANCE SELECTION 4. SATISFACTION QUAL
PRICE VALUE PERFORMANCE SANTANDER 7 SELECTIO
SERVICE 5. PRICE VALUE PERFORMANCE SATISFACTIO
TION QUALITY SERVICE VALUE PRICE PERFORMANCE
6. QUALITY
QUALITY VALUE 7. SERVICE QUALITY
ION SELECTION 6.
ON QUALITY SERVICE PRICE VALUE SATISFACTION ADF
ACTION QUALITY PERFORMANCE SERVICE PRICE VALUE
RMANCE
SATISFACTION
SELECTION
QUALITY
SERVICE
As one of the largest remarketers of vehicles in the U.S.,
MORE THAN JUST
ANOTHER BRAND
we are in the business of helping dealers achieve success.
That’s the promise of Santander.
SC-AD_40116-5_031714
SC-AD_40116-5_031714
IN FRONT
FA
E LEADERSHIP
E Recognizing Leaders
ITY
ON
N
Leadership takes many forms.
CONTENTS
9
Santander Consumer USA Inc. (SCUSA), for example, has become a leading name in auto finance
and remarketing through teamwork that includes
our strong relationships in the auction business.
That’s why we hosted the Santander Auction Partner Awards reception for the third consecutive year
on the eve of the recent Conference of Automotive
Remarketing in Las Vegas, NV. The annual gathering of auto remarketing professionals seemed the
right time to recognize our top performers for 2013.
Among the Auction Partner Award winners was Denise Rementer,
SCUSA asset remarketing auction manager, named Auction Representative of the Year at event. Rementer, who has been with SCUSA for more
than six years, received the award based on overall job performance.
FA
ICE
LITY
ON
ON
Y
FA
E
3
Here are more auction award categories and winners:
• Auction Partner of the Year – ABC Auctions of Indianapolis, IN, chosen
for efforts to promote SCUSA’s fourth-quarter charity campaign, not
just funds raised, but spirit and energy.
• Overall Auction of the Year – Manheim Detroit, MI, based on SCUSA
business criteria.
• E-Commerce Auction of the Year – ADESA Concord, NH, for internet
sales activity and results.
• Operational Auction of the Year – ADESA Charlotte, NC, chosen by a
combination of internal and external feedback on operational criteria
from SCUSA’s remarketing team.
• Central Region Best Performer – Brasher’s Salt Lake City, UT
• West Region Best Performer – ADESA Phoenix, AZ
KNOWING YOUR INVENTORY:
Management tools to keep your wheels turning
Active auctions
Buy Santander Consumer USA vehicles
at auctions nationwide
Executive expertise
ADESA’s new president talks operations,
strategy and technology
Friend, follow ... sell?
Dealers and sellers are talking social
media, but seeing little traction
• Northeast Region Best Performer – ABC Lancaster, PA
• Midwest Region Best Performer – Manheim Detroit, MI
SCUSA is pleased to take this opportunity to spotlight these award winners, who set the bar in 2013 and were the embodiment of our annual
Santander Auction Partner Awards.
4
6
8
10
11
Export experts
Relatively cheap U.S. wholesale vehicles find
buyers in foreign countries
Seeds of spring
Weather slowed February retail sales, while
dealers were stocked up for a March push
We hope you find the magazine informative, and again, thank you for
your business.
Brent Huisman
SVP, Asset Remarketing
Santander Consumer USA Inc.
GreenLight Remarketing is published by Royal Media on behalf of Santander
Consumer USA Inc. For more information about Santander Consumer USA or
RoadLoans™ call 888.540.5626 or visit www.santanderconsumerusa.com.
Royal Media can be found at www.royalmedia.com. ©2014 Santander Consumer
USA Inc. Special Photo Credits: Leitr Keiows (Auctions, p3).
4
EXPORT MARKET
EXPORT EXPERTS
Relatively cheap U.S. wholesale vehicles
find buyers in foreign countries
BY PHILIP RYAN
Container ships, like this one in San Francisco Bay, arrive with goods from Asia
but often depart with cars to Hong Kong and other Asian distribution points.
T
HE ECONOMY MAY STILL BE FLAT
in the United States — another dismal
jobs report was delivered in January —
but other countries have fared better, and
one result is that international demand for American used vehicles is on the rise.
A car remains a luxury for the citizens of many
foreign countries, but the appetite for vehicles is
increasing. India has just 12 cars per 1,000 people
compared with 423 for the United States, according to a 2010 World Bank Report. China has 44
per 1,000. It’s clear that these rapidly expanding
economies have a lot of room for growth, and that
growth comes from relatively oversupplied economies such as the U.S., Western Europe and Japan.
As many as half of U.S. vehicles sold to international buyers wind up in Mexico, but the so-called
BRIC countries — Brazil, Russia, India and China
— are taking in a growing share of American vehicles as well. According to the Manheim 2014 Used
Car Market Report, a compound annual growth
rate (CAGR) on used car sales of 22% is expected in India over the next five years. In China, the
CAGR on used cars of 13% over the last five years
is expected to increase to 28% from 2017 to 2020.
Naji Haddad, Manheim’s director of global
export, says that the growing used-vehicle export
business is beginning to make itself felt in domestic inventory and pricing. “With new car manufacturing levels nearing 16 million units in 2013,
the highest since 2008, we expect the used car industry to be saturated in the next few years,” he
tellsGreenlight Remarketing. “Manufacturers have
approached Manheim Export and other avenues
to explore how we could help them move this supply of inventory abroad.”
EXPORT MARKET
EXCHANGE RATE
The Middle East is a particular area of interest to U.S. sellers. Haddad says that the volume
of used vehicles headed to this region is causing
some larger exporters “to explore alternative buying methods in addition to the traditional auction
route.” One alternative method is bulk buying
from fleet companies and manufacturers. Large
purchases from a single seller naturally lead to
better pricing for these buyers.
Scot Hall, EVP of operations at Swapalease, is
less certain the volume of sales abroad is enough
to move the needle on pricing in the U.S., but
he recognizes the rising demand coming from
abroad. “The United States is one of the cheaper
automotive markets out there in terms of new
cars,” he says. “When those things come off
lease or are ready for trade-in, even somebody
buying one of those cars at full retail may be able
to turn around and make a profit on it [by selling
it abroad.]”
Hall says Canada is a much more expensive
car market than the U.S., adding that Canadians
living near the border could potentially buy new
vehicles in the U.S., cross the border and sell them
in Canada for a profit.
Dealers in the U.S., however, are generally constrained by their deals with manufacturers from
selling cars abroad, Hall says. In the unlikely event
those restraints are lifted, he says, “I don’t know
Values of big cars like this 1979
Chevrolet Caprice tumbled in the
U.S. after two oil crises, but these
models became popular as
exports in that era.
ON SALE IN OUT-OFTHE-WAY PLACES
Photo: Art Kanovalov
Manheim ExportTrader is a service that allows international buyers to browse Manheim auctions
and bid on vehicles, and also handles transportation of the vehicles to the buyers.
According to Haddad, about 2 million used
cars are exported from the U.S. every year, and
this number is expected to grow. “With a surplus
in inventory, we expect pricing to be much more
competitive, particularly among international ‘export’ markets, thereby driving prices downward,”
he says.
5
if there would be enough volume [of U.S. vehicles
sold] to flood a market, but there might be enough
volume to change that pricing in the country importing the vehicle.”
Ricky Beggs, editorial director of Black Book, says
that some dealers manage to sell vehicles abroad,
and that being able to do so is largely a matter of
having access to a safe and reliable network.
“Exporting vehicles outside the United States is
nothing new,” Beggs says. “It’s been going on for
years and years and years. You get a dealer who’s a
great entrepreneur, who talks to somebody, knows
somebody, has a connection, and they work some
deal out.”
Beggs also mentioned the Middle East as a
popular destination for U.S. vehicles.
“Back in the late 1970s, the Chevrolet Caprice
was a vehicle that got exported tremendously to
the Middle East,” he says. “The Middle East was
looking for V8, rear-wheel drive, light-colored cars.
I noticed that at some auctions [some cars] would
bring a little bit stronger money for the overall
condition of the cars, and that’s what was happening.”
“The Middle East was looking for V8,
rear-wheel drive, light-colored cars.
I noticed that at some auctions [some
cars] would bring a little bit stronger
money for the overall condition of the
cars, and that’s what was happening.”
—R
icky Beggs, editorial director, Black Book, on the beginnings
of the Middle East export market in the 1970s
This Audi A6 and Hummer
H2 are parked in the forecourt
of a used car dealer in Ufa,
Russia, about 800 miles east
of Moscow. Russia’s appetite
for cars isn’t growing as fast
as India’s or China’s, but Russia
is still a popular destination for
former American-market cars.
Western Russia’s proximity to
Europe also makes it a popular
destination for cars originally
sold in Western Europe.
But Beggs agreed with Hall that the volume
is not sufficient to influence domestic pricing.
“There’s not enough of a huge supply in the marketplace right now to say, ‘Hey, let’s dump it somewhere else.’” He says. “It’s not a case of that. It’s
just an opportunity for somebody to make a little
money to remarket the car and also for the company that’s buying it, to get inventory in their particular market.”
And selling to international buyers involves significant risk, Beggs added. “It’s not easy. You’ve got
to have the right contacts. You’ve got to know what
the laws are, what the shipping requirements are.”
That’s where services like Manheim ExportTrader come in. Haddad described how foreign
dealers, far from using self-service channels, are
relying on full service to have their needs met.
“Some foreign-based buyers are moving from a
‘do-it-myself’ to a ‘do-it-for-me’ procurement strategy,” Haddad says. “They are now submitting
shopping lists and expect various sources to find
the cars for them. For example, a foreign-based
dealer may request 200 Toyota Camrys, 2012 or
2013 year, all white, with automatic transmissions
and zero paint on panels.”
Haddad cautioned that dealers selling abroad
in low volumes could face difficulties in negotiating contract pricing, dealing with freight forwarders and general logistics, threatening the profitability of the venture. That might be expected from
someone representing a venture like Manheim’s,
yet, as Beggs and Hall indicated, with the right
know-how (and know-who,) it can be done.
The scale of foreign sales of U.S. vehicles may
be small at the moment. But with attractive U.S.
prices and hungry foreign buyers, used-vehicle
prices could get a lift from across the ocean.
6
AUCTIONS
ACTIVE AUCTIONS
Brasher’s
Northwest*
Manh
Minne
Thurs
Brasher’s Idaho
Thursdays
Brasher’s
Salt Lake City
Tuesdays
Brasher’s Reno
Wednesdays
Brasher’s
Sacramento
ADESA Golden Gate
Tuesdays
Manheim Denver
ADESA Colorado Springs
Manheim Southern California
Thursdays
ADESA Los Angeles
Fridays
ADESA San Diego
Thursdays
DAA
Oklaho
Thursd
ADESA Phoenix
Wednesdays
Manheim Tucson
ADESA Dallas
Thursdays
M
Manheim Hawaii
Wednesdays*
Americas Auto Auction
Tuesdays
Manheim
San Antonio
Wednesdays
Auto Auction
RV Auction (please contact auction for dates)
Boat Auction (please contact auction for dates)
Ma
We
Dealers AA
of Alaska
Wednesdays
AUCTIONS
heim NorthStar
esota
sdays
Manheim
Minneapolis
Manheim Detroit
Thursdays
Americas Auto
Auction - Chicago Manheim Ohio
Wednesdays
Tuesdays
Manheim
Arena
Tuesdays
ADESA Cincinnati
Tuesdays
ABC St. Louis
Thursdays
Manheim
Kansas City
Wednesdays
ABC Bowling
Green
Fridays
Manheim
Louisville
Thursdays
Manheim Nashville
Tuesdays
oma City
days
ABC Birmingham
Wednesday specialty
anheim Dallas
ednesdays
Manheim
Mississippi
Manheim DFW Thursdays
ADESA
Birmingham
Wednesdays
ADESA Houston
Wednesdays
ADESA Atlanta
Wednesdays
Manheim Georgia
Tuesdays
Manheim Lakeland
ABC Baton Rouge
Thursdays
ADESA Concord
Wednesdays
ABC Lancaster
Wednesdays
Manheim New York
Wednesdays
ADESA New Jersey
Thursdays
Manheim New Jersey
Wednesdays
Bel Air Auto Auction
Tuesday specialty; Thursday Auto
Manheim BaltimoreWashington
Tuesdays
Manheim North Carolina
Mondays
ADESA Charlotte
Thursdays
Americas AA - Greenville
Manheim Central Florida
Wednesdays
Manheim Tampa
Thursdays
ADESA Tampa
Mondays
Weekly weekend online events are available through OVE and ADESA Dealer Block. Contact your favorite auction or go online to ADESA.com, Manheim.
com or OVE.com for listings. Copart and IAAI auction sites are available across the country. Please visit www.copart.com and www.iaai.com for details.
*Contact auction for exact sale date
7
8
Q&A
EXECUTIVE EXPERTISE
ADESA’s new president
talks operations, strategy
and technology
BY BEN GEIER
The new president & chief marketing officer
at ADESA has much to say about the future of
remarketing, in particular its technology. Stéphane St-Hilaire took the helm at ADESA on Jan.
6. Previously, he served as president and chief
executive officer of ADESA Canada for five years.
St-Hilaire joined ADESA Canada in 1998 and
played an important role in building the unit, according to ADESA parent company KAR Auction
Services.
GreenLight Remarketing caught up with StHilaire last February to find out what he has
planned for the coming year at ADESA.
Greenlight Remarketing: What do you expect
in the world of auto auctions and remarketing
for 2014?
Stéphane St-Hilaire: New- and used-vehicle
sales were strong in 2013. About 1 million more
new and used vehicles were retailed last year
than in 2012. Incidentally, the used-vehicle supply is rising mostly from off-lease volume. This
all equals more business for auto auctions and
remarketing for 2014.
It is definitely a time of change in our industry,
with many new prospects in the areas of technology and integration.
GLR: What are ADESA’s plans in terms of new
technology for the coming year?
SSH: We will continue to invest heavily in technology. We set a new standard when we acquired
OPENLANE, and we continue to build on that
success. This acquisition and successful integration has truly elevated our vision in the area of
technology and pushed us to continue to capture transactions that currently take place outside the traditional wholesale auction channels.
Dealers have made it pretty clear they want
choices with their business, and we are committed to providing them with the tools to be successful in this online marketplace. We currently
have initiatives in the works with a high emphasis
on technology, including continuing to develop
mobile apps that provide access to ADESA.com
from anywhere. We will also continue to invest in
and expand our physical auction footprint.
GLR: What are ADESA’s plans to expand its client base?
SSH: Investing in new technology, new products and new services will organically grow our
client base. In terms of our dealer client base,
we were ahead of the game on this. Four years
ago when we knew lease volumes were going
away, we put a heavy emphasis on dealer consignment customers and vehicles. Our dealer
consignment business remains the highest in
the industry today, even when vehicle volumes
returned in 2013.
As part of the KAR Auction Services group of
companies, we will also expand our client base by
cross-marketing to many of the same customers
and utilizing many pieces of the various business
units, through Insurance Auto Auction, Automotive Finance Corp., CarsArrive and more.
GLR: There are going to be more cars coming
off-lease in 2014. How will this affect remarketing in general and ADESA in particular?
SSH: In general, it means that customers are
going to need to utilize all of the tools at their
disposal to more efficiently find the specific vehicles they want among a larger pool of inventory.
For ADESA in particular, the acquisition of
“Dealers have made it pretty clear they want choices
with their business, and we are committed to
providing them with the tools to be successful in
this online marketplace.”
—S
téphane St-Hilaire, President & Chief Executive Officer, ADESA Inc.
OPENLANE was a real differentiator for us in the
area of off-lease vehicles. We are a leader in the
private-label online market space — as a company, we manage and operate in excess of 90% of
these sites in both Canada and the U.S. Basically,
it is the customer’s brand and our technology.
So, we essentially get every off-lease vehicle first.
GLR: How is that achieved?
SSH: Let me explain: Every off-lease car goes
into a private-label site first. If those franchised
dealers don’t buy them, many of these cars then
go on to ADESA DealerBlock in an open sale online before they make it to auction. So, we can
offer dealers access to cars no one else has. And
not just any cars — newly off-lease cars.
GLR: Do you have any plans for new products
or service offerings that you can share?
SSH: As I have said, we will continue to invest heavily in technology. We will continue to
develop mobile apps that provide access to
ADESA.com from anywhere. We will continue
to provide services that add value to the industry — like our Dealer App that allows dealers to
have a more successful auction experience. During the past year, this app has been downloaded
17,000 times. Dealers are using this app more
than 50,000 times a month to look at individual
vehicles.
Or services like High Tech Locksmiths, which
recently joined the KAR group of companies. HTL
is the largest locksmith company in North America and now gives us a national presence. In the
past, you would have to wait for the “key cutter”
to come to auction; now customers can get keys
cut immediately.
GLR: You’ve worked in both the Canadian and
U.S. markets. What differences do you see?
SSH: Dealers in Canada tend to transact online to a greater degree, which could be due to
weather and geographic differences between the
two markets.
GLR: If you could do one thing to help used
car buyers, what would it be?
SSH: For the wholesale used-car buyer, it
would be providing uniform condition reporting
across the industry.
For the retail used-car buyer, it would be transparent trade value based on real market data.
TOOLS
9
KNOW YOUR INVENTORY
Inventory management
tools to keep your
wheels turning
In years past,
franchise dealers
didn’t want old, lowvalue cars hanging
around after trade,
and would quickly
auction them for
virtually no return.
New inventory
management systems
allow dealers to
retail these vehicles
in more appropriate
ways, maximizing
even the smaller
profits of
such sales.
BY CODY LYON
Technology is front and center for businesses
in the 21st century— and that includes auto
dealerships.
Inventory management software is one technology solution helping dealers better understand local markets and pricing sensitivities. In
short, these tools can reveal a market’s collective car-buying tastes. They provide a dealer with
an added edge so they can make more informed
appraisals, better buys at auction, and better
informed pricing of inventory and in the end,
more strategic merchandising.
Modern inventory tools got their start when
car dealers and auctions started to recognize
not only the marketing power of the internet,
but also the details a buyer could find out about
existing product. A seller could post a photo and
other details online that were previously only
available through a phone call or an in-person
visit to check out the car.
With the data available online, dealers could
monitor and track which models were getting
sold and what were not. This new market intelligence provided dealers with knowledge of how
other dealers were pricing cars. From these ad
hoc beginnings, inventory mangement systems
were born.
Today, a number of dealer networks have inventory management tools that were developed
in house. For example, AutoNation, with its 300
dealerships nationwide, employs around 15
people in its IT department, which is dedicated
solely to the development of AutoNation’s technical programs and platforms, including its inventory management tools.
Third-party inventory management tools are,
however, a more common approach.
Lance Helgenson, a spokesman for vAuto,
which makes the Live Market View provisioning
tool, says the company’s technology identifies
vehicles with the highest potential in a particu-
lar market and “practically delivers those cars to
your doorstep.”
Helgenson says vAuto’s tools allow a buyer
who picks up a Chevy Malibu to know the supply for Malibus in his market. “He’ll know how
many competing cars he’s got around him, and
ultimately, how fast that car is likely to move off
the lot. He’ll have a cost-to-market metric.”
So if a dealer paid $10,000 for the Malibu and
his inventory management system tells him that
Malibus in the area are retailing at $12,500, he
knows he has a $2,500 spread to pay for necessaries such as reconditioning.
The monthly cost for vAuto’s Provision system ranges from $1,295 to $2,200, depending
on the options a dealer chooses to add to his
monthly subscription.
Another feature in vAuto’s suite is a
provisioning tool that gives a real-time view of
the local market, providing dealers with intelligence to know where to buy a car and what to
pay for it.
Dealer.com also offers a dealer management
tool called Inventory Lifecycles for new and used
vehicles.
Dealer.com spokeswoman Alison Von
Puschendorf says her company’s tool helps
dealers automate inventory merchandising, including price adjustments, advertising, and other factors. She also says the tool is able to trig-
ger merchandising changes based on real-time
input from dealer websites, social media, CRM,
and advertising data.
Other dealers bypass inventory management
tools while still embracing some of the broader
technology. They say there’s a lot more value in
on-the-ground kick-the-tire “research.”
An inventory management system is only
as good as the human running it, according
to Dave Baudoin, general manager of Reliable
Auto in Las Vegas. Baudoin points out that humans still need to enter the relevant data for the
tools to be effective.
He said the key to effectively managing inventory
is hands-on, versus relying on a computer or app.
“You’ve got to touch it, feel it and smell it,”
he said.
Both vAuto and Dealer.com’s tools provide
dealers with high levels of efficiency and market intelligence. These, paired with the human
touch, can contribute to a sharper edge for a
car seller.
vAuto’s Helgeson says that when it comes to
the the end of the year, dealers who relied on
human intuition alone often find that their numbers were less accurate. This means unsold inventory and missed opportunities.
“If you have a tool like vAuto’s, you retail that
stuff before it becomes a problem car that sits
on your lot for 400 days,” says Helgeson.
10
ONLINE
FRIEND, FOLLOW...SELL?
Dealers and sellers are talking social media,
but that doesn’t necessarily translate into profits
BY DAVE SCHAFER
Effective use of social media appears to be rare
in the remarketing industry. While Facebook pages exist for nearly every auto auction, none has
gained significant traction or found a way to effectively monetize the social media platform, according to two industry insiders.
“Today, if you look at the auction process,
the buyers usually stick to their current regions
or auctions that are their favorites,” says Tony
Rimas, managing partner with Fraser McCombs
Capital, which invests in automotive technologies. “They usually buy from people they know, or
people they’ve bought from in the past. So, the
social interaction has already been there for many
years.”
Because that dealer-seller interaction is so
ingrained, and those relationships already
long-established, sellers and dealers alike are left
to scratch their heads and wonder where the value is in social media, says Todd Dearborn, vice
president of sales with Internet Brands Inc. “They
already know what’s happening at the auction next week. Whether they want to connect
with that auction in a social atmosphere is a question mark.”
But change could be on the horizon. Both men
note there is a great deal of discussion about
how to incorporate social media into the auction process, as well as a number of ideas and
technologies being developed to do just that.
Dearborn predicts it will be about a year before
a remarketing company will be able to show
proof of traction in the social media sphere, and
probably two years until there is an established
market leader.
“There is a need to be met out there from a
social standpoint, and looking at traditional social
media — if you were to look at Facebook, Twitter — I’d say, if you talk about the auction space,
it’s nowhere. There’s no one doing anything there
that’s got any sort of traction,” he says. “On the
retail side, there’s still a struggle, as well.”
But other developing technologies could lead
to new uses for social media. VIN Viper VIN
Scanner allows dealers to advertise vehicles on
Facebook, and Autoniq allows a user to scan
a VIN and get a report that pulls together various data — from Kelley Blue Book, NADA, AutoCheck, CARFAX and more — on one screen so
that users can make a faster decision whether to
buy or sell a car. That creates a platform for future
social media initiatives, both Rimas and Dearborn says.
“I don’t see the traction yet, but I do see a willingness to embrace the technology, should something that makes sense come along and really
click with folks,” Dearborn says.
Feedback among the community of dealers
and sellers might be where social media eventually makes a breakthrough, Rimas says. If a social media tool can create a more trustworthy
experience between the buyer and the seller, it
will provide value. He envisions business-to-business networks where buyers can check out sellers they haven’t bought from prior to making a
purchase.
“I think there’s a need for that,” he says. “I think
guys would get a lot more comfortable with on-
line buying, versus going to the physical auction.”
Dearborn foresees something that updates
auction-watchers about new arrivals.
“Where it starts to potentially become interesting is, if your physical auction runs once a week
and your online auction runs every day, if there
was an element that took new inventory and let
dealers log into a social marketplace, look at that
car and potentially put a value on that vehicle –
now you’re talking. Now there’s something potentially interesting there because there’s a power
to getting there first,” Dearborn says.
“I think if you brought in something that says,
‘Hey, here’s a greater way for you to interact with
people who you buy from on a common basis,
or sell to on a common basis,’ I think your usage
would be through the roof,” Rimas says.
As well as backing Autoniq, Fraser McCombs
developed Dealer Circles, which takes the interactions happening on the Autoniq platform and
connects people based on purchase history and
similarities with vehicles they might be interested
in. The company is looking to launch it with the
support of the auctions later this year as an added-plus to Autoniq, Rimas says.
“There certainly are some interesting things
that I think are coming on the horizon,” Dearborn says. “A lot of that stuff is still out there in
the ether. But a lot of interesting things are being
talked about, and I think interesting tech is coming around the corner.”
Almost all auction firms now have social media presences — but traditional social media outlets aren’t
necessarily the best venues for putting buyers together with product. Remarketers are looking to app
developers and more specific venues to prove the value of social investment.
TRENDS 11
SEEDS OF SPRING
Weather slowed February retail sales, while
dealers stocked up for a big March push
BY TOM KONTOS
Wholesale prices were down
in February versus January,
atypical of their seasonal pattern, but were up modestly
on a year-over-year basis,
despite continued wholesale
supply growth coupled with
weaker retail demand limited by severe weather condiTom Kontos
tions. This unusual pattern
would indicate that dealers
were fairly aggressive in proactively bidding in-
lane and online for the vehicles they need for
the budding spring market, especially highly
certifiable off-rental program vehicles remarketed by auto manufacturers.
PRICING PATTERNS
According to ADESA Analytical Services’
monthly analysis of Wholesale Used Vehicle
Prices by Vehicle Model Class1, wholesale used
vehicle prices in February averaged $9,839, —
down 1.4% compared to January, but up 0.9%
relative to February 2013. Compact cars and
vans, which are popular rental and fleet vehicles, were the only segments that had both
monthly and annual price gains.
Prices for used vehicles remarketed by manufacturers were up 1.3% month-over-month and
up 6.3% year-over-year, as manufacturers capitalized on strong demand for certifiable units.
Prices for fleet/lease consignors were down 0.5%
sequentially but up 1.1% annually. Dealer consignors saw a 1.1% average price decrease versus
January, but a 0.9% uptick versus February 2013.
Based on data from CNW Marketing/Research, retail used vehicle sales were down 15.6%
month-over-month, as severe weather again
negatively impacted auto shopping. On the other
hand, sales of certified pre-owned (CPO) vehicles
in February were up 7.7% from the prior month
and up 14.1% from the prior year, based on figures from Autodata. The strong certified sales
may have been a factor in healthy pricing for offrental program units sold by the manufacturers.
WHOLESALE USED-VEHICLE PRICE TRENDS
AVERAGE PRICES ($/UNIT)
Feb. 14
AVERAGE PRICES ($/UNIT)
LAST MONTH Vs.
Prior Mo. Prior Yr.
Jan. 14
Feb. 13
Total All Vehicles $9,839 $9,983 $9,747 -1.4%
0.9%
Total Trucks
$10,239 $10,438 $9,531 -1.9%
7.4%
Total Cars
$8,776 $8,869 $8,854 -1.1%
-0.9%
Mini Van
$7,609 $6,910 2.2%
10.1%
Compact Car
$7,130 $7,010 $6,910 1.7%
3.2%
Fullsize Van
$10,907 $10,341 $9,952 5.5%
9.6%
Midsize Car
$8,140 $8,258 $8,262 -1.4%
-1.5%
Mini SUV
$11,988 $11,987 $10,993 0.0%
9.1%
Fullsize Car
$6,889 $6,771 $7,413 1.7%
-7.1%
Midsize SUV
$7,324 -2.4%
11.6%
Luxury Car
$11,999 $12,209 $11,963 -1.7%
0.3%
Fullsize SUV
$10,652 $10,981 $10,130 -3.0%
5.2%
Sporty Car
$12,002 $12,343 $12,144 -2.8%
-1.2%
Luxury SUV
$18,210 $18,941 $18,583 -3.9%
-2.0%
-1.2%
-5.8%
Compact Pickup $7,260 $11,480 $11,553 $11,873 -0.6%
-3.3%
Fullsize Pickup
Mid/Fullsize CUV$13,791 $13,999 $14,916 -1.5%
-7.5%
Total Crossovers $12,615 $12,768 Compact CUV
$13,398 Feb. 14
Jan. 14
$7,448 $7,503 $7,362 Feb. 13
LAST MONTH Vs.
Prior Mo. Prior Yr.
$6,560 $7,459 -1.4%
-2.7%
$12,460 $12,632 $11,532 -1.4%
8.0%
Source: ADESA Analytical Services
1
This analysis is based on nearly seven million annual sales transactions from more than 170 of the largest U.S. wholesale auto auctions, including those of ADESA, as well as other auction companies. ADESA Analytical Services segregates these transactions using the J.D. Power and Associates Vehicle Segmentation Guide to study trends by model class.
The views and analysis provided herein relate to the vehicle remarketing industry as a whole and may not relate directly to KAR Auction Services Inc. The views and analysis are not the
views of KAR Auction Services, its management or its subsidiaries, and their accuracy is not warranted. The statements contained in this report and statements that the company may
make orally in connection with this report that are not historical facts are forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,”
“believes,” “seeks,” “estimates,” “bode”, “promises”, “likely to” and similar expressions identify forward-looking statements. Forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by the forward-looking statements. Factors that could cause or
contribute to such differences include those matters disclosed in the company’s Securities and Exchange Commission filings. The company does not undertake any obligation to update
any forward-looking statements.
GRAND
SLAM
Quality • Price
Value • Selection
Performance
Service
Satisfaction
Dealers swinging for the fences choose
Santander Consumer USA for its exacting
standards on vehicle makeovers before resale.
Anything else would be just a foul ball.
As one of the largest remarketers of vehicles in the country,
Santander Consumer USA offers the right selection of vehicles
in the right places with the right coverage.