The majority of dealers who buy used vehicles listed for sale on ADESA's online platforms come from areas where the auction company has physical auction locations.
That's why ADESA's parent, KAR Auction Services Inc., is investing $30 million to $35 million to build a 65-acre auction site near Chicago, said CEO Jim Hallett, and why the company acquired the 200-acre Pittsburgh Auto Auction in New Stanton, Pa., last March.
KAR Auction Services also has identified five to 10 independent auctions it would like to buy if the opportunity arises, Hallett said.
The strategy will better position ADESA to take advantage of the recovery of the industry's used-vehicle supply at its physical auctions and on its online platforms, he said.
During the recession, as technology became more sophisticated, dealers grew more Internet-savvy and sellers looked for more ways to cut costs, online sales grew and the emphasis on physical auctions waned. But now that new- and used-vehicle sales have fully recovered, ADESA is refocusing on its bricks-and-mortar auction business.