Change is constant and right now this wholesale market needs to change to re-identify itself. The issue is that auctioning in-the-lane is not changing and a gruesome pattern exists. The imbalance between what you own a vehicle for and whats its ACV is at the block continues to widen and [the] most significant factor are escalating auction fees. This one pervasive objection as the reason NOT the buy and sell at auction is as strong as I can recall.
A correction in the big economy (the "Trump" effect/the Dow at 19,535 and futures today at +18.00) is one fix. Over the next 12-18 months a growing optimism index, reductions in regulations, and lower tax burdens will strengthen both the new and used car markets... and at that point, fees are not as objectionable. But it is not just fees themselves that will siphon cars off the block. On-line transactions are growing as are the number of system and software capabilities available to large dealer groups to conduct their own wholesale auctions. In this blog a few years back... I foretold of the "from above" factor. Car buyers have become more comfortable stepping away from sole dependency of in-the-lane buying and again, in the next 12-18 months, I can see as many as 25% of all "auction" cars not crossing an auctioneers block!
Both on the calendar and in the lanes, this market is over. Trucks are not effected, LUXURY SUV's are insulated... but after that until we see a big tic up in the overall economy, educate yourself and your managers on how to look at the change in your wholesale process needed going through 2017.
W/
I have been attending and participating in a new podcast, "Auto Transport Intel" that Jay Wertzberger produces and broadcasts with Ty Thompson. It drills in on automotive transport and is dedicated to improving the industry. A topic I explored with them recently was focused on not how to get new business as a transporter but a revealing look at some of the reasons we can't get new business. The theme was that if we look at ourselves with open eyes and ask if we feel if we're putting our best foot forward, what little things could we do to improve our professional profile... and that triggered the theme, "reimagining service". Over the next several weeks, I'll define Reimagining Service in more detail, and we will dig in on the relationships that the car auctions have with vehicle transporters. Stay tuned!
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