After investing nearly two years and “several million dollars” to help create online auction selling across multiple platforms, ADESA is bowing out, said Peter Kelly, president of ADESA’s corporate sibling in charge of digital services.
ADESA, the nation’s second-largest auto auction company, is a unit of KAR Auction Services Inc.
Much time and work have been put into the project, but “we still don’t have agreement on all the key points with all of the parties,” to execute the initiative, Kelly told Automotive News on Monday.
“With the competitive landscape and the technology costs of building this system and expected antitrust and regulatory-type issues that go with initiatives like this, we’ve concluded that we’d be better investing those dollars in other areas that we see more immediate and tangible benefits to customers.”
Up until ADESA’s withdrawal, the auto auction industry seemed to be moving closer to a major change as rival auctions were looking into listing used vehicles for sale simultaneously on competitors’ online remarketing platforms.
Manheim, the nation’s largest auction company, ADESA, and a group representing independent auction houses formed a steering committee last year to guide the new technology that would enable the listings.
The technology under development would let buyers bid against each other across competing platforms until the winning bid is made.
Current technology allows vehicles to be listed for sale on 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.
Kelly said that program in its current form will continue.
He added: “ADESA and KAR Auction remained to committed industrywide initiatives in general. We just feel that the prudent decision at this time is to no longer participate in [proposed] multiple platform sales.”