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Wholesale Markets - Port City

Mark Wescott, general manager, Port City Auto Auction, Richmond, Maine:

“We’ve been in business since 1988.

“We’re running four lanes. We’ve got six lanes.

“Volumes spiked up a little bit in September. That’s typical.

 “We’re running right around the 450 (unit) mark. That’s up from this time last year.

“I think it’s because the new-car stores are selling more cars, which is generating more trades.

“Sales percentages are at 55 percent.

“That’s about the same as this time last year.

“We run probably 85 to 90 percent dealer consignment. That’s what it was this time last year.

“(Non-dealer) cars are mostly repossessions. We get them from all over the state.

“(Our repos) come from banks and credit unions.

“The number of dealers in the lanes is staying pretty consistent.

“That’s probably around 225.

“Our (bidders) come from all along the East Coast.

“We (offer) all of our vehicles online.

“That business is doing OK.

“We’re probably selling 10 percent online.

“We do not have a salvage sale. We don’t do any special sales (equipment, power sports, etc.).

“(In terms of reconditioning and other services), dealers are pretty
much doing the same as last year.

“The average price in the lanes, the last I looked, was about $4,500.

“That’s up a little bit from this time last year.

“During an election year, which it is, there is an effect on business.

“I’m already hearing from dealers that things have been slow.

“So we’ll see. Hopefully, after the election, things will take right off again.”

NextGear Expands as Competition Heats up

NextGear Capital continues to grow.

The floor planner was born out of a merger between independent Dealers Services Corp. and Manhein's floor plan arm in late 2012.

Today it is expanding into new markets both in the United States and overseas.

In the U.S., NextGear Capital has started floor planning new cars for franchise dealers.

It has also started operations in the U.K.

NextGear Capital president Brian Geitner explains that floor planning is limited there and mostly only available to franchise dealers. NextGear Capital will now extend that service to independent dealers.

Australia will be the next step of international. Geitner said.

This overseas growth is necessary in part because the U.S. floor plan market grows more competitive.  Strong mean strong performance for floor planners and that is attracting new entrants to the market.

The question is how long it will be befoe the market moderates.

"There's only one direction those metrics can go," Geitner said.

Interest rates and delinquencies will rise, at some point. At that time, he said, NextGear Capital's experience in technology and a veteran staff will give the floor planner an advantage.

The firm is also making a name for itself through charitable efforts.

During the recent National Auto Auction Association convention, NextGear Capital presented a $10,000 check to the NAAA Warren Young, Sr. Scholastic Foundation. The company also made a major contribution during the event's Pedal Car charity auction, purchasing seven pedal cars to display around their corporate office.

NextGear Capital executives also took part in the Ice Bucket Challenge to raise donations and awareness for amyotrophic lateral sclerosis. In addition to participating in the challenge, NextGear Capital pledged $5,000 towards the ALS Foundation.



“At NextGear Capital, we believe in making a difference and giving back to others, whether that’s in our community or globally,” Geitner said.

Second Generation Auction Exec Leads NAAA

(Ellie Johnson, general manager of Manheim North Carolina, is the incoming president of the National Auto Auction Association.)

UCN: Tell us a little bit about your background in the business.

Johnson: We started out as just an auction company – a real estate/equipment-type auction. My father, Kenneth Aycock, actually built the auction in 1984. 

I started working there in 1986. I became GM in 1997. 

The rest is history. I’ve been there ever since. We were part of the ADT group and Manheim bought it in October 2000. I also have a real estate broker’s license and a background in
accounting.

UCN: How does your varied experience/education in these different areas help you in the industry and leading the NAAA?

Johnson: I think any type of business education you have as you get into this industry certainly benefits you. One thing that I really like is that we started out as an independent auction, then we were part of a small group and now with Manheim, certainly, we’re a part of a much larger group. 

So it’s given me the perspectives of all these different areas. I believe that will help me in representing the NAAA. So it will help me represent each individual location. 

UCN: At one time the industry used to be these big chains and then the independents. Now the chains are smaller and some independents have formed their own coalitions – a la ServNet. How does that affect how you represent those different interests?

Johnson: I don’t think that makes a big difference. We still represent those auctions as an association in the same way. 

Being part of our association still means you have that quality (NAAA) symbol. We still have to hold high the same ethics. Every member location does that, whether it’s a Manheim, ADESA or small
independent.

UCN: Do you get feedback from different auction owners/general managers as you’ve moved up in leadership?

Johnson: Yes, I do. For instance, I’m very good friends with Henry and Patty Stanley of Carolina Auto Auction. I talk with Henry and we talk about the days when our location was an independent. But we also talk about business from the perspective of the association. So that’s nice.

UCN: Could you talk about your involvement in dealer associations, including the Carolinas Independent Automobile Dealers Association and the National Independent Automobile Dealers Association? 

Johnson: Well, I do it first because they (dealers) are our customers. Those customers have been coming to our auction for 30 years, so you want to be part of their organizations and what they support. 

Also, (I want to know) if there are issues that arise in the industry from a state level or national level that affect our dealer base, because those issues will also affect our auction locations.

UCN: You’ve always been involved in bringing members into those groups, winning Crystal Eagle awards for your efforts.

Johnson: It’s always been important. We have done multiple membership drives at the auction. In North Carolina, they have continuing education requirements for dealers. 

So what we currently do now is have a continuing education class for dealers at our location. We host it for the Carolinas IADA. 

It also gives us an opportunity to be in front of some dealers who might not already attend our location.

UCN: As dealers address more challenges on the legislative/regulatory front, are there things that the auction industry can do to help?

Johnson: I’m hearing more and more – in the Carolinas especially – that it’s important to make sure the dealers are getting educated. 

For the states where there isn’t a continuing education requirement, maybe the auctions could sponsor some events that would help dealers. They wouldn’t have to teach a class, but sponsor (or provide a location for classes). Also, we can help keep dealers informed when we learn about (legislative/regulatory) issues. 

UCN: When you first became NAAA vice president, you had mentioned issues that were important to you: the need for a uniform commercial title code, legislative advocacy; and technology at auctions. Are these still concerns?

Johnson: Those things are still important. On the technology side, we should be able to get AutoGrade out to all the member locations by the end of this year. 

The association also purchased Kink or Bend LLC (an IT company specializing in creating online resources for automobile structure types). That certainly helps our association and customers. 

As far as the uniform title code, it is the white whale. I think every day at an auction you see the need for having that uniform title. It seems like every day we have title issues that would completely go away if we had (a universal title).  

I want to say we’re closer. Hopefully with the association, along with Manheim and ADESA, we can continue to push ahead with this.

UCN: What are the other challenges that you see the industry facing right now?

Johnson: One thing is the importance of getting more information up online as soon as possible (for sales), whether it be with the dealer base or even the commercial units. We want to get those cars in earlier and make sure condition reports get done (more quickly) and information is quickly available to dealers. 

UCN: A few years back, annual car sales dropped to 10 million, but now they seem to be coming back to pre-recession levels. What are you seeing in the lanes?

Johnson: We’ve seen a steady growth of vehicles at our location. We’re hearing more about off-lease units and volumes coming back this year. All of our commercial consignors are saying that we’re going to see more volumes.

UCN: What are some of the goals you have for the upcoming term?

Johnson: As I’ve said, getting the AutoGrade out to all of the auctions by the end of the year is important. We want to continue to build relationships with the NIADA, the National Automobile Dealers Association and the National Auctioneers Association.  It’s also going to be important to build up the PAC and (have a big turnout) at the NAAA Day on the Hill (next spring).

UCN: Have you received any advice from your predecessors?

Johnson: You can’t print it (laughs). But, seriously, No.1 is to enjoy this time. Get out and see the other locations and members. Show the members that the association appreciates their membership in the group. I think that’s the biggest thing. 

Even in the past year, I’ve been able to travel with Jack Neshe (outgoing NAAA president) and visit auctions that the NAAA has never visited before. The response has been overwhelming. They really appreciate us taking the time to come out and visit their locations.  

We even had a dinner at an area with (representatives) from a Manheim, an ADESA and an independent sale at the same time. That was
really nice.

Wholesale Markets - North East Pennsylvania

PENNSYLVANIA

James Gaughan, president, North East Pennsylvania Auto Auction, Scranton, Pa.:

“Our sales percentages are higher this year than any other year in our history.

“There have been a lot of moves in the market that have led to a reduction in inventory this year. In the first three months of the year in the Northeast, we had horrible weather.

“We went into the spring market with fewer cars.

“The sales percentage was so high that we sold the same amount of cars even though we ran fewer. We’ve managed to catch up through the year. We had more GSA units.

“It’s been challenging because more franchise dealers have decided to keep more used cars. 

“For example, a Chevy dealer will keep a Ford that before he would send to auction.

“We are still getting the trade-ins because of turn schedules. 

“We aren’t losing the cars, but they are delayed. 

“Some of the nicer stuff does get retailed and that takes those units out of our lanes.

“The scarcest version of a car is the perfect car - a one model year old with 15,000 miles. The new-car dealer and the strong independents love to find vehicles with low miles that are clean. 

“That’s the car that’s hardest to find right now. When dealerships send one through the lanes, it does 128 percent of Black Book.

“Our GSA cars have gone through the roof.  They have low miles and the government keeps them in the right condition. 

“We do pick up some cars from upstate New York that are exposed to the elements.

“Trucks were in a little slump during the summer. When it’s sunny and 85 degrees outside, that causes us to lose sight that the fall is coming. 

“But as soon as you get those two days when it’s 42 degrees in the morning, people remember.

“The truck market has just taken off like a rocket for the good inventory. The trucks with more than 100,000 miles on them are at a low, the same as the older, rougher cars.

“The market is adjusting, though, now that kids are going back to school and people are realizing they need another car. 

“Franchise dealers in our area felt like they saw less business in late August and early September than they should have. 

“Right before the kids go back to school, we have a lull because people are buying clothes or they’re trying to sneak their last vacation in.

“In our area, we had a late start to the school year. 

“Business has been better since the middle of the month.

“We’re relocating to a new site within the next year. We’re on the fringe of the Poconos, at the bottom of a mountain. 

“We’ve been challenged by the topography.

“We’re going to move about four miles away.”

 

NAAA's Neshe Looks Back at Year

Jack Neshe didn’t realize he’d need to know French to serve as president of the National Auto Auction Association.

Neshe, who completes his term this month, said the language barrier came up during a visit to a Canadian auction in Quebec.

“Normally, we send out arbitration diagrams (signage) in English to all of our member auctions,” he said. “We never realized that in Quebec, you can’t hang it in English. It had to be in French. We never knew that.”

So when NAAA Executive Director Frank Hackett got back to the office, he had another sign made up in French and sent it back up to the auction, Neshe said.

It’s one of those things that showed the NAAA that there’s always something to think about when serving members, he said.

Neshe said his time in leadership has gone by quickly.

“Everyone said it would go by fast,” he said, “but it actually went faster than I expected.”

The NAAA structure has the president travel with the president-elect throughout the year to make for smooth transitions.

It worked out well with Neshe and incoming president Ellie Johnson, since Neshe has a Friday sale and Johnson has a Monday sale. They were able to travel in the middle of the week.

It’s really a three-year journey, from vice president to president-elect to president, Neshe said.

Travel is always a big part of the position, though Neshe said he covered more auctions with former President Paul Lips.

“I think we visited 75 auctions that year,” he said. I spent more time with Frank and Paul than with my wife.”

His travel this past year has been less hectic, though he’s visited about two dozen sales. The focus this year was choosing auctions that had never been visited before.

“It’s nice, because now when I go to a convention, I can put a face to a name and location,” Neshe said.

Another thing that stood out to Neshe is how the small NAAA staff manages all of the moving parts of the organization.

“I think that’s the part that really amazed me,” he said. “You really get close to the staff and become family.”

When asked what thoughts or advice he had for Johnson, Neshe said that even though the industry seems big, it’s really a small industry.

“We were welcomed everywhere,” he said. “What a great experience.”

        As part of his Canadian travels, Neshe, along with Johnson and Hackett, had the unique experience of having a dinner with a group of auction rivals.

“We had  (representatives) from a Manheim, auction, an ADESA auction and an independent who were all in the same locality,” Neshe said. “They had never had dinner together, and they had dinner together with us. It was wonderful.”

In the end, Neshe said he would do it all again.

“It’s such an honor to serve.”