Auction Sales Grow, Safety Remains Priority

By Jeffrey Bellant May 05, 2020
Not only are auctions going full steam ahead on simulcast sales, many are allowing dealers to preview inventory before the simulcast sales. Not only are auctions going full steam ahead on simulcast sales, many are allowing dealers to preview inventory before the simulcast sales.

 

As auctions continue to ramp up business, industry partners are putting together a playbook for safe sales in the post-COVID-19 era.

Frank Hackett, CEO of the National Auto Auction Association, said the group’s May 4 conference call with industry leaders showed auctions becoming more active with results more positive.

“There were a lot of optimistic attitudes,”  Hackett said.

Not only are auctions going full steam ahead on simulcast sales, many are allowing dealers to preview inventory before the simulcast sales.

For example, Manheim announced that this week it will  allow select locations to provide clients access to preview inventory on a limited basis.

ADESA is receiving vehicles at its auction sites – although on a limited basis at a handful of locations. It is also offering PSIs and allowing redemptions by appointment.

America’s Auto Auction is  also offering dealer previews, Hackett said.

In all cases, auctions state they are complying with protocols to keep their clients and employees safe.

“Everybody, including ServNet, XLerate, Alliance Auto Auctions, etc., is seeing their volumes go up and everybody was optimistic,” Hackett said.

Jonathan Banks, vice president of vehicle valuations and analytics for J.D. Power, updated the association on the wholesale market, Hackett added.

Wholesale auction sales continue to recover, Banks reported. Sales reached nearly 40,000 units the week ending April 26, more than double the 18,000 sales recorded the week ending April 5.

Sales results for the last week of April comprised 40 percent of pre-virus expectations, an improvement over the 20 percent level recorded at the post-virus low point, according to J.D. Power.

Wholesale auction sales have totaled roughly 207,000 units since mid-March, a decline of 480,000 versus the same period in 2019 and a loss of 430,000 units versus pre-virus expectations, Banks reported.

J.D. Power expects a large portion of these vehicles from rental fleets and lease maturities will pour back into the market during May and June as dealer demand increases.

Wholesale auction prices grew just over 1 percent on a weekly basis the week ending April 26. While modest, the week’s result marks the first improvement observed since mid-March, Banks reported.

The week closed with prices down 14 percent versus J.D. Power’s pre-virus forecast for the week.

As industry leaders look toward the eventual opening up of live sales, they are putting together a safety plan for how that will look, Hackett said,

The industry is working to develop a playbook for auction general managers to give direction on using protective precautions in all areas, Hackett said.

Auction chains like Manheim and ADESA are combining their best practices to help create this playbook, while sharing the resource with the industry, he said.

NAAA will also work with its general counsel to craft language to create an industry standard that auctions can follow.

“It will really help when a local, state or federal agency comes in with any questions, you can show this and say, ‘This is the industry standard that comes from our association,’” Hackett said.

He’s hoping this playbook will be available within the next 10 days. The industry is also creating a video for auctions to show at their entry points which will encourage safety protocols for clients and auction staff. It will be similar to the Safe T. Sam marketing program, Hackett said.

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Last modified on Wednesday, 06 May 2020 15:10

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