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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.

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.”

Wholesale Markets - Quincy AA

Michael Cooley, general manager, Quincy Auto Auction, Quincy, Mass.:

 “Sales have been super.

“We’re in our 23rd year. We have six lanes.

“Volumes are good, they’re up. We’re averaging between 1,200 and 1,300 cars per week. Last year, we were at 900.

“I attribute a lot of it to the economy doing pretty good.  Some of it is just the overall growth of the car business.

“And some has to do with the facility itself. We’re drawing in more dealers because of the facility.

“Sales percentages are averaging in the high 60s, low 70s. Anything less that 66 percent is not good. We’re usually between 66 and 70 percent.

“We’re (bringing) into the lanes, on average, about 1,000 dealers per week. We’re easy to get to from pretty much anywhere. We’ve got guys who come down from Maine, New Hampshire, Rhode Island, Connecticut, and all over Massachusetts.

“The (volumes) are good for the dealers. Plus, we have a really nice storage facility. So if guys want to buy cars but can’t get them out right away, we provide them a storage facility at a reasonable rate. We have 120 acres available for storage.

“So they may see the market is right to buy cars and they want to buy 10 to 15 cars but don’t have the room for them. We can provide the storage.

“The overall (mood) of the dealers is that they seem to have a positive outlook coming out of the summer and into the fall buying season.

“About 90 percent of our volume is dealer consignment. That’s gone up a little bit as we cater more toward the independent dealers.

“We still do some fleet-lease. We do a lot with Enterprise Rent-a-Car, local banks and credit unions.

“We also work with Fleet Street Remarketing and they’ve told us that their consignments are going to be picking up into the fall season.

“Repossessions have gone down a little bit. I think the banks have been working a lot closer with their clients, trying to keep them in the cars.

“We still have (salvage/in-op units). We also do an RV sale a couple of times a year, in the spring and fall. It’s not a big number.

“Post-sale inspections have picked up a lot. They are up about 30 percent over last year.

“The average price coming through the lanes is about $3,200. It might have gone up a little, but not much.

“The truck market has picked up a little bit as we go into the fall. Light-duty trucks are starting to pick up. Outside of that, everything is steady.

“We’ve been seeing a lot more franchise dealers bringing their cars to the auction.”

Wholesale Prices Decline Slightly

moneydownWholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) declined 0.7 percent in August.

This was the fourth consecutive monthly decline and brought the August Manheim Used Vehicle Value Index reading to 121.8, down 0.4 percent from a year ago.

Read More

Wholesale Markets - Pennsylvania

Grant Miller, president/CEO, Central Pennsylvania Auto Auction Inc., Lock Haven, Pa.:

“We’ve been here 27 years. We’ll have our 27th anniversary on Aug. 28. We’ll give away $27,000 in cash
and prizes.

“We have five lanes and we’re running all five.

“Volumes usually run up to 700 on our regular sale. We’ll average about 650. In terms of volumes, we’ve dropped a few. But dollar-wise, we’re managing to stay even with last year.

“Our sales percentages have averaged 61 percent since our first year. But we’re struggling to hold that now. We find that June and July, during vacations, is tough to do big volumes of business. During tax season, we were selling 78 percent. When that stops, the market changes really quick. We do a great job with late-model vehicles as far as prices, but we just don’t get a large amount of volume. 

“We don’t have a factory sale. We do business with a few banks and lease companies, but that’s about it. Our lease numbers run from 70 to 90 per week.

“We also have a utility sale once a month and we’ll run 1,000 cars on that day. That’s every third Thursday of the month. We have a contract with Verizon, so we remarket their lease-end and terminated vehicles.

“We’ll draw anywhere from 375 dealers a week for our regular sales to 500 for our specialty sales. We have great dealer support. More likely, 80 percent of our dealers come from Pennsylvania. But we have quite a few coming from New Jersey. We also get dealers from Ohio Maryland and New York. 

“We have our own transportation company and that helps us. We have 16 to 17 transporters, some four-car, some two-car and nine-car carriers. We can also move heavy equipment from our utility sales.

“We’ve found that to be very critical to our business.

“Our average price in the lanes – not including salvage – is between $8,000 and $9,000.

“Jeep prices are just our of sight. I can’t believe some of the prices they’re bringing. They’re bringing what they brought two years ago.

“I think, if anything is struggling, it’s the high-priced, late-model, full-size cars like the Chrysler 300s and the Cadillacs.”