ADESA: Private-label auctions will grow

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NEW ORLEANS -- ADESA Inc., the nation's second-largest vehicle auction company, has built a custom trading network that enables groups such as Bob Rohrman Auto Group, which has dealerships in Indiana and Illinois, to trade vehicles among their own stores, says CEO Stephane St-Hilaire.

He said other dealership groups in Canada are using the feature and there are other "interested parties," but he did not give more details.

The rise of such intragroup-only auctions reflects dealership groups' desire to keep good used vehicles in-house but move them to a store in a market where those vehicles are likely to command the highest possible prices.

St-Hilaire, who became ADESA's CEO Jan. 6, said the technology is similar to what the company makes available to captive finance companies that sell their vehicles, including ones coming off lease, exclusively to their maker's dealers. Those "private label" or "closed sale" auctions represent a growth opportunity for ADESA, he said. "

DeBoer: Lithia has its own online platform.

ADESA and rival auction company Manheim provide similar supporting technology for other dealership groups that want to promote intra-group sales of used vehicles. Manheim, for example, says it provides the technology platform for sales among stores at dealership groups such as Asbury Automotive Group, Ken Garff Automotive Group and Swope Automotive Group.

But not all groups have signed up.

For example, Lithia Motors Inc. CEO Bryan DeBoer says his company, the nation's ninth-largest dealership group, developed and built its own online platform for selling trade-ins from one Lithia store to another.

James B. Treece contributed to this report.

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


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