At the dealership level, that means that even though Cox offers a wide range of products for dealerships, “we’re never going to say, ‘You gotta buy ’em all,’” said Cox Automotive President Sandy Schwartz.
“If someone has a better product, shame on us, but [the dealer] should buy the better product. And it should integrate easily” with Cox Automotive products, he said.
As much as Manheim wants to be dealers’ go-to destination for used vehicles, it’s right for Stockwave to be “industry agnostic,” said Janet Barnard, president of Cox Automotive’s Inventory Solutions unit, which includes Manheim.
An abundance of vehicles are available in the wholesale market, but dealerships still have difficulty finding the right vehicles, she said. That’s where Stockwave comes in.
“When this idea was birthed, the concept of it being industry agnostic was in line with what we believe is the right future for Manheim and Cox Automotive,” Barnard said. “If we continue to provide ease of doing business and the right inventory for the right buyer, then we’re going to win anyway; you’ll also buy cars at our auctions.”
That commitment to not giving preference to Manheim is “absolutely guiding principle No. 1,” said Dale Pollak, Stockwave’s boss, who founded vAuto and then sold it to Cox’s Autotrader brand in 2010. “I’m so proud of Cox and Manheim to embrace that philosophy.”
The AutoGrade vehicle-condition reporting tool was another case of putting customers’ interests ahead of the company’s. Manheim invested heavily to develop AutoGrade, which is designed to reduce human error and subjectivity when describing a used vehicle’s condition. That enables buyers at auctions to decide more quickly which vehicles they might bid on. And, especially for online buyers, it gives them more confidence that there won’t be unpleasant surprises.
In 2014 Manheim made AutoGrade available to all National Auto Auction Association members at no cost, through the association. It was adopted by ADESA and some large, independent auction
houses and quickly became accepted across the industry. Today, when auction buyers speak of looking for vehicles rated between 2.5 and 3.5 by AutoGrade, their peers know exactly what that means.
Might Manheim have charged rivals for the use of AutoGrade? “That was an option,” Barnard said, but “clients were asking us for an industry standard.”
“We had a standard they were happy with, which will continue to evolve. We wanted to make sure it got in the hands of as many users as we could. The best way to do that is to license it to them for free” while holding onto the patents, she said.
Manheim benefits, too. Greater trust in condition reports can boost buyers’ willingness to bid, thereby raising the percentage of vehicles sold first time through the lane. Doing that has been one of Barnard’s top objectives since joining Manheim from Cox Enterprises’ cable business.
Cox’s attempts to put customers’ interests first haven’t always worked. Take DealerMatch.
DealerMatch debuted in summer 2013 as a corporate sibling to Manheim. Its business model was to help dealerships buy and sell used vehicles among themselves while avoiding the auctions. Ads promoting it talked about avoiding high auction fees, angering other auctions.
In launching DealerMatch, Cox felt that “if we don’t do this, someone else will,” Schwartz said. But after investing heavily in technology to support dealer-to-dealer used-vehicle swaps, Cox found dealers already had ways of doing that and didn’t need DealerMatch, he said.
DealerMatch disappeared in 2014.
Barnard calls DealerMatch “a good idea that was probably before its time.” She said Manheim is “constantly piloting and testing other ways that we might facilitate a dealer-to-dealer transaction, so more to come on that.”
The philosophy behind Stockwave and DealerMatch isn’t new to Cox Enterprises.