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New NAAA chief steps in as volume steps up

Johnson to preside over auction industry's rollout of electronic condition reports

Johnson: "The auctions we’re going around to are seeing that [business is] stable and seeing an increase in the number of units coming back."

The past few years have been rough for the auto auction industry.

Leasing all but dried up during the Great Recession, resulting in tight supplies of off-lease vehicles for auction.

But things are looking up, said Ellie Johnson, general manager of Manheim North Carolina in Kenly, N.C., and president-elect of the National Auto Auction Association. Kenly is about 40 miles east of Raleigh, N.C.

Johnson, 52, takes over as president of NAAA at the group's annual conference in Boston this week.

"We're seeing an increase in volume at my facility in North Carolina," Johnson told Automotive News.

"In 2008 and 2009, we were at our peak," she said. "We saw our volumes dip in 2010 and 2011, but we are back to where we were. With our year-to-date numbers -- and if we hit our forecast -- we should exceed our peak at my location. The auctions we're going around to are seeing that [business is] stable and seeing an increase in the number of units coming back."

Jack Neshe, NAAA's current president, will become its chairman this week. He is general manager of ADESA Boston, in Framingham, Mass.

Among the challenges for the auction industry over the past year has been to convince dealers of the benefits of vehicle condition reports when selling their vehicles at an auction, Johnson and Neshe said.

Generally, most dealers keep their vehicles until the day before the sale, which gives auctions little time to create condition reports, take photos and get the information posted online in time for the sale. That mattered little when online sales were a tiny fraction of auction volume.

But that is changing.

Increasingly, dealers are seeing the benefits of bringing their vehicles to auction well in advance of a sale, allowing the auctions to obtain condition reports, Neshe said. That means the vehicles can be listed on auction run lists that detail the vehicles for sale.

"Dealers know that the more information we can get online, the better shot they have to sell their vehicle for the highest profit," he said.

The adoption of AutoGrade, an electronic condition report system, helps too, Johnson said.

Manheim created AutoGrade and, through an arrangement with NAAA, makes it available to all NAAA member auctions at no cost. Vehicles are graded from 0 to 5 with 5 being excellent condition.

The system requires the condition report writer to answer specific questions about a vehicle. That information is submitted electronically through Auto Auction Service Corp.'s AutoIMS inventory management system.

The generated score should reduce human error and subjectivity and provide condition report consistency for all auctions, buyers and sellers, Johnson said.

AutoGrade has been adopted by ADESA and some large independent auction houses, said NAAA CEO Frank Hackett. The system is to be implemented at all NAAA auctions over the next year, Hackett said. NAAA is funding the rollout.

Johnson was born into the auto auction business. Her father was an auctioneer who sold real estate, farm equipment and heavy equipment before opening an auto auction house in 1984.

Johnson started working at the family's Aycock Auto Auction in Kenly in 1986 preparing vehicle titles and ensuring that dealers who sold vehicles got their checks. She worked her way up to comptroller and business manager, and earned an accounting degree from Barton College in Wilson, N.C.

The family company was sold in 1994 to ADT Automotive Inc., then the nation's third-largest auto auction company. In 2000, the site was acquired by Manheim when ADT was sold. Johnson became the site's general manger in 1997.

She said owning an auction is different from being its general manager but it all boils down to one thing: "It's the pride you have in the facility and the job you do. You want to make sure you're doing the best job you can for your customers and your employees."

You can reach Arlena Sawyers at asawyers@crain.com

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