Manheim invests $100M in digital marketplaces amid industry-wide growth

Manheim says it will have invested more than $100 million in its digital platforms, through upgrades that started at the beginning of this year and will continue through 2019.

This comes amid a growing push of online wholesale sales, both at Manheim and elsewhere in the auction business.

At Manheim, specifically, in the first half of the year, 45 percent of vehicle sales were digital, compared to 39 percent last year, the company said in a news release Tuesday.

Similarly, over at rival auction chain ADESA, online-only volumes (655,000 units) were up 42 percent year-over-year in the first half, climbing 31 percent when acquisitions were taken out of the equation, according to second-quarter earnings slides from parent company KAR Auction Services.

And independents are getting in on the action, too, giving their buyers alternative methods for wholesale buying.

“As ServNet owners look to enhance their facilities to ensure that that the physical space of the auction stays relevant and efficient, they have also worked hard throughout the year to use and improve the many alternate tools to ensure success for their customers: selling upstream, expanding online capabilities and engaging buyers after the vehicle has crossed the block,” ServNet president Eric Autenrieth writes in a mid-year report from the network of independent auctions.

“ServNet recently conducted a highly successful and first-of-its-kind sale for U-Haul using an innovative approach,” he said.

“We grouped over 100 U-Haul vehicles from the 22 ServNet auctions across the country and offered them in a weekend online-only event through SmartAuction. It was one of the many ways that ServNet auctions collaborate to enhance market exposure for its customers, and is the kind of event we expect to use even more in the future.”

More on Manheim’s $100M investment

The investments Manheim is making cover a wide swath of platforms and services offered by the auto auction company.

For instance, the Cox Automotive company launched a Manheim Express mobile app in July and plans to roll out a full-service concierge program giving dealers specifically trained advisers on vehicle listing and profitability.

“The Manheim Express app makes it easy to list a vehicle in minutes, with the best imaging in the industry, simple seller disclosures and our Guaranteed First Bid, giving the dealer a hard cash back-up to support the trade-in process” said Derek Hansen, vice president of offsite at Manheim, in a news release.

“And coming soon, we’ll be able to offer a full concierge service for the dealers who prefer not to list cars themselves,” Hansen said. “We’re excited to deploy this force of highly-trained, consultative specialists who can help our dealers maximize efficiency and profitability.”

Manheim has made and continues to make upgrades to platforms like OVE (where it overhauled the search experience), RMS Automotive, Simulcast and, the company said.

“With wave after wave of enhancements, we are delivering a future-proof digital marketplace,” said Nick Peluso, president of Manheim Digital Marketplace and RMS Automotive, in the release.

“We are committed to delivering an omni-channel marketplace that dealers can tap that offers the type of choices they need to compete and thrive in today’s fast-moving used vehicle marketplace.”

Investing in digital ‘the right choice’

Over at KAR, chairman and chief executive Jim Hallett began the ADESA-specific portion of Q2 earnings call’s opening comments by emphasizing how prudent it has been to invest in digital platforms.

“First, it is clear to me that we made absolutely the right choice in developing our online selling platforms,” Hallett said.

He pointed to physical auction volumes falling 4 percent in Q2, which “were more than offset” by a 41-percent uptick in online-only volumes during Q2.  All told, ADESA had a 9-percent uptick in total volume for the quarter.

“We’re gaining market share with our technology-based offerings. We are the clear leader in the private-label auction sites for commercial vehicles, and we are working hard to develop the market-leading dealer-to-dealer mobile application in the industry,” Hallett said.

“We sold 30,000 vehicles on TradeRev platform in the second quarter, and this was more than a 100-percent  increase over the prior year. And we are now setting new records for sales on our private-label sites. In fact, we sold 316,000 vehicles on our private label sites, an increase of 29 percent over the prior year,” he said. “And as I think back, I can remember the year that we acquired OPENLANE in 2011 when we sold less than 300,000 vehicles for the entire year.”

Digital to continue gains

In its news release on the $100 million investment, Manheim is anticipating more digital adoption in what it calls the “off-site market,” given the continued additions to Manheim Express, like the full-service concierge, integration with the vAuto Provision product, inventory management dashboard and more.

And in terms of its overall online offerings, Manheim is seeing more folks embrace this way of wholesaling.

The company said in the news release, “Online inventory channels help dealers and commercial sellers develop more cost-effective wholesale operations, reach broader audiences and increase their satisfaction with transactions. Increasingly they are embracing this way to do business, recognizing they can move inventory faster online with 24/7 access to buyers and sellers.”

Source: Auto Remarketing

Cox Automotive