Within two or three years, Manheim will sell about half of its vehicles through digital transactions -- provided that vehicle condition reports improve, predicts President Sandy Schwartz.
For years the industry has wrestled with vehicle condition reports that vary depending on the auction company or seller. Determining the condition and repair costs of vehicles offered for sale online is difficult.
"We are working really hard on condition reports, not only at the Manheim auctions but universally among all auctions," Schwartz said during a meeting with Automotive News editors and reporters. Manheim is the nation's largest auction company.
"We've got to have condition reports that mean the same to everybody," he said. "We have to have trained professionals who are writing the reports and taking pictures so that a true, accurate description of these cars is being done."
Schwartz defines digital transactions as vehicles bought by smartphone, tablet or computer using a Manheim online platform. Among Manheim's platforms are OVE.com, which is its 24-7 online marketplace, and Manheim Simulcast, which enables dealers to bid on and buy vehicles being sold at physical auctions using an electronic device.
Schwartz predicts that digital transactions will make up 25 to 30 percent of the vehicles that dealers buy from Manheim this year, up from 12 percent 21/2 years ago when he became its president.
ADESA, the nation's second-largest auction company, sold "approximately 35 percent" of its customers' vehicles online in its second quarter that ended June 30, up 25 percent from the year-ago quarter, said Jim Hallett, CEO of KAR Auction Services Inc. KAR is ADESA's parent company, and Hallett made the comments this month during KAR's second quarter conference.