Auction Broadcasting Co. is opening auction sites and moving into new territories, the family-owned company's top executives said.
But in a sign of the changing times for the industry, the new auction sites will be roughly half the size of traditional auctions. That's because so much business is being conducted online, Mike Hockett, Auction Broadcasting's founder and CEO, told Automotive News at the National Auto Auction Association convention in Chicago in September.
For example, about 40 percent of the General Motors factory-owned vehicles sold on consignment by Auction Broadcasting are purchased by online buyers, up from about 30 percent last year. "You really have to control your costs, especially in this tough environment," Hockett said. "The Internet has really allowed this process to accelerate."
The company opened an auction site in Columbus, Ga., in August and expects to open two others in the first half of 2012. Instead of building the sprawling, 100-acre sites with 10 to 12 auction lanes for which the industry is known, Auction Broadcasting opts for sites half that size or smaller. For example, the new ABC Columbus has just three lanes and sits on just 20 acres.
The smaller size isn't a function of declining volume. Though overall auto auction volume has suffered this year, volume at Auction Broadcasting through mid-September this year was up 18 percent over 2010, Hockett said. Industrywide auction volume through June was down more than 9 percent, data from the National Auto Auction Association show.
Jason Hockett, vice president of Auction Broadcasting and the son of Mike Hockett, said the company plans to open a site in the Northeast in the first quarter of next year. It will be Auction Broadcasting's eighth site and its first in the Northeast.
The Hocketts said the other site is to open in the second quarter and will not be in the Northeast. They declined to be more specific.
Jason Hockett said Auction Broadcasting "tries to go into locations that are underserved or perhaps where we see a niche that is not being met."