Tag Archive | "remarketing"

KAR Names New Leader for Preferred Warranties

CARMEL, Ind. — Vehicle remarketing and technology solutions provider KAR Auction Services Inc. has named Edmund Field president of the company’s Preferred Warranties Inc. (PWI) business unit, which offers extended service contract plans for pre-owned vehicles and serves independent used-vehicle dealers, small franchise retail automotive, and powersports dealers.

Field will be responsible for leading PWI’s operations and digital and mobile product development and advancing the company’s market growth strategies. He will be based at KAR’s global headquarters in Carmel, Indiana.

“Edmund joins PWI at a time of great opportunity, as the company nears the completion of our nationwide expansion by the end of the year,” said Paul Kramarz, senior vice president of risk at KAR business unit, AFC. “Edmund’s extensive experience and leadership skills will be instrumental in PWI aligning with KAR strategic initiatives and achieving a leading position within the industry.”

With more than 20 years of automotive industry experience, Field joined KAR earlier this year as the director of new product development. Before coming to KAR, Field was at Volkswagen Group and VW Credit Inc., where he supported the areas of insurance, sales and business development, new product development, contact center operations, fleet management and manufacturing.

During his time at VW Credit, Field was responsible for the development and launch of Volkswagen Financial Protection Services as a startup insurance entity selling and administering a full suite of insurance protection products to Audi, VW, and Ducati dealers in the U.S. market. Field also held several management roles at VCI’s customer service center in Libertyville, Illinois.

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Dent Wizard Hires Vice President of Customer Development

ST. LOUIS —  Paintless dent removal provider Dent Wizard International announced the hiring of Ryan Briggs to the newly created position of vice president of customer development. He will report Mike Black, the company’s senior vice president and COO.

Briggs will primarily focus on the Top 150 dealer groups, expanding the company’s relationships with those groups, particularly with Frontline Fast by Dent Wizard, a SMART reconditioning program. He will also be responsible for expanding services and programs with nontraditional resellers.

“Ryan has a proven track record for follow through and communication with customers and prospects, which are critical attributes for Dent Wizard’s superior customer service,” said Black. “His knowledge and passion for what we do will help our customers sell cars more quickly and for more money. He’ll be a valued partner to dealership groups that want to consolidate their recon services.”

Briggs brings more than a decade of professional experience to his role. He most recently served as national sales manager for DigitCut Systems, which specializes in installing automotive aftermarket products, including window tint and clear overlay paint protection film. He has a bachelor’s in economics from the University of Oklahoma.

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Rapid Recon Salutes 100 Years of NADA and Vehicle Reconditioning

PALO ALTO — In 2017, the National Automobile Dealers Association (NADA) celebrates 100 years serving franchised automobile dealers. Next year also marks the centennial of the first evidence of vehicle reconditioning, according to a provider of reconditioning workflow time-to-market software solutions.

Rapid Recon issued a press release today saluting the NADA for 100 years of faithful service to the automobile industry. It also offered a brief look into the history of the industy, the association and the reconditioning.

The NADA story began in 1917 when 30 auto dealers traveled to the nation’s capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience, the NADA was born.

“We’re excited to be an exhibitor at NADA in New Orleans for its 100th anniversary, a proud organization for a great industry,” said Dennis McGinn, founder and CEO of Rapid Recon. “It is remarkable how many people today make their living working in and supporting the American automobile dealership, nearly five million men and women.”

The company will be exhibiting in Booth No. 5417 at the NADA Convention & Expo, which will be held at the New Orleans Ernest N. Morial Convention Center on Jan. 26-29.

Some industry milestones, sourced from The American Car Dealership, show how quickly the franchised auto dealer network developed:

  • 1896: The first franchised new-car dealership opened in Reading, Pa. It sold Winton automobiles, one of the earliest successes of the emerging automobile manufacturing business
  • 1899: First automotive showroom opened in New York City, displaying Winton cars
  • 1905: Cars first sold on an installment plan. Two dealer groups formed from which would become the National Automobile Dealers Association
  • 1917: NADA officially organized with 15,000 dealers, representing 600 brands, many of which never produced a working vehicle or sold vehicles
  • 1933: First NADA Used Car Guide
  • 1934: NADA membership reaches 30,000
  • 2017: NADA membership totals 16,000 new car and truck dealers, with 32,500 franchises, both domestic and international members, representing 38 brands.

Recon Recognized

As for recon, there was no need for reconditioning at first, at least not as it exists today. What trade-ins there were in the industry’s beginning were animal-drawn wagons and similar conveyances, according to information collected by Rapid Recon. Undoubtedly, some of America’s first automobile dealers spiffed up those vehicles, replacing a wooden wheel or two, repairing a broken seat or strengthening a weak axle spring to give a worn-out buggy “like-new” appeal for buyers.

By the time the NADA was founded in 1917, the sufficiency of units in operation meant a growing opportunity for used-vehicle sales. According to motor vehicle registrations in 1917, as compiled by the U.S. Bureau of Public Roads, nearly five million cars and trucks were registered. While difficult to calculate how many of the 7,653 million vehicles registered from 1914 until then would have still be in operation, it’s likely many of them flowed back to dealers as trades.

By late 1916, creative rebuilders were putting old cars, now “reconditioned,” back on the road.

Motor Age magazines from the 1920s discuss reconditioning in he role of used-car sales success. The May 11, 1922, edition presented two ideas: “The used-car company will sell its car at cost, plus reconditioning, plus sales expense, plus a normal profit.” In a separate article, “The National Used Car Company Plan,” the publication floated the idea of centralized used-car operations and reconditioning by zone — the thought then being used-car sales were a distraction to new-car salespeople.

Most reconditioning in those early days was cosmetic, though there was a growing recognition of the need to make those cars both safe and somewhat “reliable,” according to Rapid Recon’s research. During the Great Depression, reconditioned vehicles supplemented dealers’ new-car opportunities.

The beginning of World War II is recognized as the birth of intentional reconditioning, which morphed into the operation that’s now integral to new-car dealership used-car departments. With new-car manufacturing curtailed by the U.S. government from 1942 to late 1945, new-car supply was virtually nonexistent. Used cars were in demand, and dealers survived by sourcing and refurbishing those vehicles. Service, parts, tires and other related opportunities became dealers’ bread-and-butter, not unlike today.

Throughout the ‘50s and ‘60s, most dealers viewed reconditioning as a necessary evil and as a means of disposing used cars taken in trade during that era of the two-to-three-year trade cycle.

Today, reconditioning continues as a discipline for cosmetically and mechanically upgrading used vehicles so they’re safer and more reliable and can command higher sales grosses. Recognizing the faster they can get used cars from acquisition to the front line to sell them, many dealers today are adopting time-to-market workflow software to reduce this cycle to three to five days, not the average and costly eight to 15 or so days, McGinn noted.

This need has expanded considerably in recent years with the flow of off-lease vehicles, which OEMs ask their dealers to market as pre-owned certified models. Certified pre-owned worked its way into the automotive vocabulary when Lexus launched the first CPO program in November 1993. Toyota’s program started in 1996. Most manufacturers and their dealers today offer certified pre-owned vehicles to buyers.

A Dealer’s Recall

One expert industry veteran, still in the business today, spent his earlier career working for Garber Buick in Saginaw, Mich., which was Buick’s first store. Its owner Gary Garber was one of General Motors’ first 13 distributors. Working in that historic environment gave this industry veteran opportunity to review and study old dealership and industry records, from which he shared recently, including perspectives on attitudes about vehicle reconditioning through the years and how over time recon practices changed.

“In the ‘50s and ‘60s, recon was patching vehicles up — making them look good cosmetically, but just good enough to pass off to somebody else and make some money on them,” he recalled.

It was not until the late ‘70s and early ‘80s that dealers began to take a serious interest in reconditioning used cars. That work, however, was predominately sublet. It was the advice of industry consultants, Garber said, that began to convince dealers they needed to bring reconditioning into their own operations to keep that profit internally.

About this time too, he added, dealers, seeing the growth in third-party service contract sales, formed their own off-shore service contract companies to retain those profits themselves. As service contract professionalism grew, those companies’ management teams, in order protect their risks, pushed for higher reconditioning standards. Better reconditioned vehicles, in turn, helped attract more used-car buyers, making used-car departments integral to dealership profitability.

As we move toward a new decade, industry changes will continue to keep manufacturers, dealers, and solution providers watchful. The huge volume of vehicle open safety recalls in recent years is one concern. Fortunately, use of recall management software woven into the reconditioning process helps identify affected models so their recall issues can be addressed before those vehicles reach the frontline and the consumer, whenever the recall is announced in the recon cycle.

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ADESA Pulls Out of Proposed Multi-Platform System

CARMEL, Ind. — ADESA will not participate in the automotive remarketing industry’s initiative to establish a multi-platform system (MPS) that would allow simultaneous bidding on vehicles listed on multiple online auction sites.

Manheim, ADESA, and other independent auctions began developing the MPS after announcing it at 2014 Conference of Automotive Remarketing. Auction representatives formed a steering committee that engaged Auto Auction Services Corp. (AASC) to build and maintain the hub technology.

ADESA is pulling out of the initiative because of concerns about “the current competitive landscape, technology challenges and expected antitrust issues,” the company said in a Feb. 23 statement.

“After lengthy and protracted efforts to create an MPS, our industry partners have been unable to agree on the best way to execute this solution,” said Peter Kelly, president of the company’s Digital Services Group.

The proposed multi-platform system would cause additional technological requirements and expenditures and could raise “new barriers to entry for smaller industry players,” the company stated.

Mike Broe, president and CEO of AASC, has said the multi-platform system would benefit customers by enhancing competition.

Janet Barnard, President of Manheim North America, responded to ADESA’s decision: “It will be up to each auction to determine whether to join MPS when it is up and running, and participants will make their own choices for their own individual reasons.”

Barnard maintained that the MPS will put more eyes on more cars, adding that competition would increase and benefit everyone involved with an efficient online marketplace.

“MPS has been carefully shaped with relevant legal considerations in mind with an eye toward ensuring full access to all auctions, small or large,” said Barnard.

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DriveTime Selects Manheim, Go Auto Exchange as Remarketing Partners

ATLANTA — Manheim announced this week that it has been selected by DriveTime as an exclusive remarketing partner along with Go Auto Exchange.

This first-ever partnership makes Manheim and Go Auto Exchange DriveTime’s primary source for remarketing wholesale inventory through its physical locations, mobile auctions and online. DriveTime operates 122 stores in 47 markets.

“Through our close working relationship, we frequently collaborate on new and different ways to help our mutual customers succeed,” said Heath Vaughan, DriveTime’s managing director of inventory. “This partnership with Manheim and Go Auto Exchange is another example of how we are creating greater vehicle efficiencies for DriveTime, while giving customers greater access to larger vehicle volumes.”

This partnership offers both companies a variety of benefits, including added flexibility in developing new technologies, increased efficiencies by doing business with a single vendor and the ability to focus on solutions for a broader base of existing and new customers, officials said.

“Our strong partnership allows us to put together our best thinking to create new and better ways to help our customers succeed,” said Susie Heins, Manheim vice president -=of dealer sales. “With dealers’ ongoing needs to access wholesale vehicle inventory and various types of financing, our joint expertise can deliver these services efficiently and effectively.”

Manheim and DriveTime have been working together for several years. During this time, both companies have developed a variety of solutions for their customers, including the creation of Go Auto Exchange, a new wholesale auction company focused on independent dealers and the low-end vehicle segment, and Manheim’s equity stake in Go Financial, an innovative subprime finance company providing dealers with more financing options via NextGear Capital.

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Wholesale Used Prices Softened in October, Kontos Reports

CARMEL — Wholesale used-vehicle prices continued to soften during October in all three of the traditional auction industry seller segments (factory, fleet/lease and dealer consignment), according to ADESA Auction’s Tom Kontos.

Prices in October averaged $9,842, an increase of 0.9 percent vs. September and a 0.8 percent increase vs. the year-ago month, according to ADESA Analytical Services’ analysis. Additionally, car prices continued to correct downward and truck prices corrected upward as they reset from high gas prices earlier in 2011, reported F&I and Showroom magazine.

“Wholesale prices appeared to do an about-face as they ceased their sequential and year-over-year decline seen since peaking in April,” said Kontos, executive VP, customer strategies and analytics. “With Fall defleeting in full swing, off-rental units sold by manufacturers and rental companies in the factory and fleet/lease lanes and online made up a higher percentage of total auction volumes in October.”

Kontos added that off-rental units sold in October tended to be late-model, higher-dollar units and, as a result, contributed positively to average prices for the month. “Had the same proportion of vehicles been sold by each of the seller groups in September and October, average prices would have fallen by 2 percent on both a sequential and annual basis,” Kontos said. “Based on this analysis, we would conclude that wholesale prices continued the modest softening pattern described in our previous commentaries.”

Manufacturers registered a 3.1 percent month-over-month price decrease but did record a 5.1 percent year-over-year increase. Fleet/lease consignors experienced a 3.1 percent month-over-month decrease and a 0.4 percent annual decrease.

Dealer consignors experienced a 1 percent average price decrease vs. September and a 3.2 percent increase vs. October 2010.

The company estimates that auction industry inventory levels stood at 30 days at month-end, marking the second month in a row that days-supply of auction inventories matched year-ago levels. “Auction industry inventories had been below year-ago levels from July 2009 through August 2011, by our estimates,” Kontos said. “The rise in inventory levels is primarily a reflection of higher Fall defleeting.”

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