The auto auction industry is moving closer to a major change as rival auctions are looking into listing used vehicles for sale simultaneously on competitors' online remarketing platforms.
Manheim, ADESA Inc. and a group representing independent auction houses have formed a steering committee to guide new technology that enables the listings.
Large-volume sellers favor the change because they want every vehicle to attract as many bids -- and as much money -- as possible.
Auction companies say the technology under development will do just that and will give dealers access to a broader selection of used vehicles. Expect the technology to be ready for testing before year end, the companies say.
"Customers, primarily sellers of used vehicles, are seeking understandably to maximize the exposure, visibility and buying opportunity for their vehicles," says Peter Kelly, chief technology officer at KAR Auction Services Inc., parent company of ADESA. "We're trying to enable that trend. We think it will be good for our customers and good for the industry and create a more robust marketplace."
Joe George, chief strategy officer at Manheim and its sibling company, AutoTrader Group, says multiple platform sales and competition among the companies make the industry stronger and more attractive to buyers and sellers.
"It makes for a more comprehensive place to liquidate or purchase inventory," he says.
The technology under development will let buyers to bid against each other across competing platforms until the winning bid is made.
Current technology allows vehicles to be listed for sale on, say, ADESA.com, operated by ADESA; OVE.com, run by Manheim; and SmartAuction, operated by Ally Financial Inc. -- or any two of those players. A vehicle appears on all of those platforms until bidding reaches the vehicle's reserve price, the minimum price the seller will accept.
Once a bid reaches that price on one site, bidding continues on that site, but the system automatically removes the vehicle from the other platforms to prevent the vehicle from being sold a second or third time.
R. Charles Nichols, chairman of the ServNet Auction Group of 31 independent auctions, is on the steering committee. He says the group meets every week via conference call and is working closely with a technical committee that is helping design the system's architecture.
Nichols is also president of BSC America Cos., a group of privately held companies including auto auctions, in Bel Air, Md.
Auto Auction Services Corp., a software provider to the remarketing industry, has been chosen to incorporate the technology and maintain the platforms.