2014 AUTOMOTIVE NEWS WORLD CONGRESS

Buyers want to click, and kick, the tires

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DETROIT — Dealers and consumers increasingly will shop for and buy vehicles using digital platforms, but brick-and-mortar dealerships and auto auctions are here to stay, says Sandy Schwartz, president of Manheim and of AutoTrader Group.

Think of it like a cup of coffee, he said.

"I think Starbucks will be here for years to come," Schwartz said last week during a presentation at the Automotive News World Congress. "You can make Starbucks coffee at home if you want to, but there is something about experience. There's also something about [the shop] being a gathering spot."

He added: "I believe people will come to auctions that still believe 'I can buy it lower than someone else; I can sell it higher than someone else.'"

Manheim is the nation's largest auto auction company. AutoTrader Group owns AutoTrader.com, Kelley Blue Book and dealership software companies vAuto, HomeNet and VinSolutions. Manheim and AutoTrader Group are owned by Cox Enterprises Inc.

Schwartz predicts that within "two or three years," 50 percent of the vehicles Manheim sells will be sold "in some digital form," up from about 25 percent today.

Schwartz said traditional dealerships are here to stay, too, but will operate much differently. He predicted, for instance, that 20 years from now dealerships will have fewer salespeople who will engage in less negotiating. He said he doesn't advocate one-price vehicle sales but favors prices that are within $200 to $300 of what is considered fair.

"It helps folks make a better [vehicle purchase] decision," he said, "and more importantly, a comfortable decision."

Sandy Schwartz
Title: President
Company: Manheim and AutoTrader Group
Main point: More auto transactions are taking place on digital platforms, but brick-and-mortar dealerships and auto auctions are here to stay.

You can reach Arlena Sawyers at asawyers@crain.com.


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