Fleet-ing Thoughts

Vol. 2 No. 14

CAR Part II: Results and Recognition
Plus: Our Inaugural Podcast with ADESA’s Tom Kontos

The first full day of the Conference of Automotive Remarketing (CAR), kicked off with the two best guys on stage since Lewis & Martin: Sherb Brown, Vice President and Group Publisher of Bobit Business Media; and, Charlie Vogelheim, Vice President of Automotive Development at J.D. Power & Associates and definitely the car industry’s best MC in the business. Charlie emceed the event, and, as always, his skill as a host made the proceedings very entertaining as well as educational. Okay, so for those of you who don’t think of panels with subject headings like “Multiple Channel Usage at Finance Units” as particularly entertaining, you were not there to witness the panelists come up with spontaneous answers to Charlie’s question “what was the worst job you’ve ever had?….

The morning keynote was given by David Gartzke, Chairman, President & CEO of ADESA, the second largest physical auction group in the U.S. and the only “whole car” (non-salvage) publicly-traded auction company (NYSE: KAR). In an industry that, irrefutably, has many changes on the horizon, David is probably one of the leaders best positioned to move things forward in a positive way, and he set the stage for the rest of the day’s discussions and presentations. Panel presentations followed on remarketing trend developments for the manufacturer captive finance companies, with representatives from DaimlerChrysler, Ford, Nissan/Infiniti, Toyota/Lexus, and my old Philly friend , John Manchin from Subaru.

Next was a presentation on vehicle grading standards by David Munnikhuysen from Manheim. While this presentation was good and very straightforward, I’m still confused as to why a uniform system of grading a vehicle has not been adopted by the entire physical auction industry… I don’t think one can say “2, 3, 4” or “clean, fair, rough” is adequate across all auction “brands” (online & physical).


Online-Internet-Upstream Advances (IRBR panel) left to right: John Possumato, Vice Chairman, Driveitaway; Jeff Frimmersdorf, President, Auction 123.com; Kurt Biggar, VP Business Development, SGS; John Hoctor, Director, Corporate Development, American Auto Exchange; and Clive Kinross, Co-Founder and President, Onlane.





In any event, when I was asked to be on the “Online-Internet-Upstream Advances” panel with other Internet Remarketing Business Roundtable members, I jumped at the opportunity, even though I anticipated that, as this panel was scheduled right after lunch, would have a low attendance. Well, it was a full audience, which indicates to me that there’s keen interest in the mission of our new “pure play” online focused IRBR group and the activities we plan to promote to achieve greater dealer education and visibility to Web based activities. My fellow IRBR panel members did a good job of explaining why we all felt the creation of this new group was a necessity, and how our goal is to move things forward in positive way for all buyers and sellers online.

After the IRBR panel, Julie Andersen from Emercent Solutions presented the results of the third annual Remarketing Performance Study. Produced in conjunction with the International Automotive Remarketers Alliance, in a few short years it has become a staple of CAR and the results are beginning to reveal trends.

I was particularly gratified when I saw the slide below, which indicates that, for fleet lessors, the area that they plan to focus most on improving this coming year is advancing Client Driver/Employee Sales (a 16% response category). So for all you fleet lessors who want to improve your client's driver and employee sales, Driveitaway is at the ready....




Fleet Managers are most focused on improving sales to drivers and employees in 2006.










An Industry First:
A Commercial Fleet Upstream Remarketing Presentation with Performance Results

From a personal perspective, while it’s certainly an honor to be on a panel at one of these conferences, it’s far more rewarding to watch a client receive a “first in the industry” award, and know that your organization contributed in some small way to that success. I had the pleasure of this experience when Gage Wagoner, the Fleet Manager of Philips Medical Systems, presented the performance results of his upstream remarketing program that Driveitaway implemented for him under the LeasePlan reDrive brand. Gage presented his results at an afternoon panel, “Evaluating Upstream Progress and Impact.”.
Philips runs a fleet of 2,600 vehicles. By merchandising vehicles before they go off service, or are “grounded” to streaming channels, offering them first to drivers, then fellow employees, then a pool of many companies’ employees, and then to volume buyers, Gage’s company saved over $900 per vehicle in increased net realization per unit – and created a group of happy employee buyers who saved between $1,500-$2,000 on their car compared to retail prices. As used vehicles, these company cars are the best maintained, most desirable units in their category but for a long time were only offered to those employees who drove them. Our program, through LeasePlan’s reDrive brand, not only extends this purchase benefit through the entire employee base, but saves incredible money per unit for those companies who use this service. It’s a no-brainer, win/win for everyone, but, like any new innovation, the program has to break through the inertia of initiating change in an area of the industry where the remarketing process has literally remained unchanged since the time Zollie Frank invented corporate vehicle leasing some 50 years ago.


Charlie Vogelheim (left), VP of Automotive Development for J.D. Power & Associates, presented the inaugural “Upstream Remarketer of the Year” Award to Gage Wagoner (center), fleet manager for Philips Medical Systems. John Possumato (right), Vice Chairman for Driveitaway, represented his Company, who co- sponsored the award along with Bobit Business Media.



Eighteen months ago, it took courageous industry leaders and companies like Gage and Philips Medical, to break through the inertia and spearhead an upstream remarketing program, back when people in the commercial fleet industry still thought the term “upstream” had something to do with fish (and certainly wouldn’t experiment with something new in vehicle remarketing). Sad to say, in corporate America there are still many timid souls who are afraid to adopt upstream even today (with clear significant savings to the bottom line risk-free, and even in this age of continual “budget cuts” when annual savings in the six figures should mean something). But with demonstrated success stories like Philips, much more progress will be made in this area to the net benefit of both those companies who run fleets and their employees who will, for the first time, be able to purchase quality vehicles at the end of their term.

Kudos All Around

Consistent with the above, and, without a doubt the best part of this outstanding conference for me, was the awards presentation immediately following the last panel discussion, where Gage Wagoner, from Philips, won the very first “Upstream Remarketer of the Year Award.” Just the inaugural presentation of this award given alongside two other Bobit Media awards of “Consignor of the Year” and “Remarketer of the Year” spoke clearly as to the growth in significance of upstream remarketing in this industry in just a few short years. And there is no more deserving a recipient than Gage Wagoner representing Philips Medical Systems. Though I may be more than a little biased here, I can’t think of a more positive program instituted in corporate America or a more positive guy to spearhead it – Congratulations Gage, we are proud to work with and be associated with you…

And, of course, congratulations as well to my old friend, Dave Langley, Manager of Vehicle Remarketing for Honda Financial Services, who won the “Consignor of the Year” Award. Dave is a pioneer in this industry in his own right, having not only been one of the first to lead the manufacturers into the practice of upstream sales (ironically, if I’m not mistaken, paralleling Gage, Dave was the first a few years ago to display in a presentation the savings metrics that he had as manufacturer vehicle remarketer by going upstream online to his dealer body), but was also the most instrumental founder of the International Automotive Remarketers Alliance and served and guided it as its President during all its early formative years. Dave was also honored last year by the National Auto Auction Association with their Hall of Fame Award as well. It’s no exaggeration to say that Dave is one of the most well respected remarketers in the country today…once again, well done Dave and congratulations for an award well deserved.

Finally, congratulations to Larry Tribble, owner of Southern Auto Auction, winner of the “Remarketer of the Year” Award. Although I don’t know Larry personally, everyone in the business knows Larry by reputation, which, consistent with the other award winners, is marked by outstanding innovation and management expertise in this ever developing industry.

Well that closed out day #2 at CAR, and although I originally envisioned this CAR entry for the blog as no more than two parts, I still have a half a day to go at CAR, including our extra special, inaugural “Remarketing Advisory Panel” meeting, so I think this event merits one more entry before I finish up.

And Our Latest Feature…

So when we knew we had secured somebody as well spoken, and well-known as Tom Kontos is in the industry for our press briefing at CAR, we were motivated to move forward with the latest feature of my modest blog, our first-ever recorded podcast, so that you can experience listening to Tom in a conversational setting. So we are excited to add this first podcast to our missive, but I admit, it’s not as good as sitting there listening to the real thing, and I apologize in advance for my novice radio broadcast skills (I’m not Imus, or Howard Stern…Sirius radio will not be seeking me out), but hopefully it will whet your appetite for more information on this dynamic remarketing sector of the business, or to reach out to Tom directly, a very dynamic personality himself.

Next Entry: CAR…Part III (on Future Values, Extra Take-Home Dollars, and our inaugural Remarketing Advisory Panel Meeting)





Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, Tom Kontos, ADESA

Vol. 2 No. 13

CAR at 11 Years: Remarketing comes into its own with certification program, new online organizations and record attendance: Part I

This year’s Conference of Automotive Remarketing (CAR) March 8-10 had a record attendance of some 550 attendees, making it the largest event of its kind to date. It sure has come a long way since the early days of its founding, when it only drew a couple hundred people. The Bobit Business Media Group were the first to put on such an event, amidst questions over whether there was a need for a practitioner conference. Today, needless to say, no such questions remain. There was an enthusiastic group at Caesar’s Palace in Las Vegas, who turned out for three important remarketing conferences in one: a meeting of the new Internet Remarketing Business Roundtable (IRBR); an awards luncheon and series of roundtables by the International Automotive Remarketing Alliance (IARA); and, of course, the CAR conference itself. We at Driveitaway added our own events on either side of the program, beginning the first night with a special press briefing, and just after CAR ended, we hosted our own, inaugural Remarketing Advisory Panel, comprised of some of the most highly regarded fleet managers and rental car operators in the nation. We did this with the insightful help of Mike Antich, the Editor and Associate Publisher of Automotive Fleet magazine and this year’s CAR Co-Chairman. Below, a few highlights of the conference on this rapidly evolving industry…


Day One – IRBR, IARA, trail blazers all…
CAR, the country’s oldest conference devoted to remarketing, began with a meeting of the country’s newest national group to form around the topic, the Internet Remarketing Business Roundtable. This was a group of nine car guys who got together about six months ago, based on the fact the no organization was adequately concentrating on the need to educate dealers on the “nuts & bolts” of online buying and selling, on both the wholesale and retail sides of the equation. Our conclusion was that this was not due to lack of interest, but because lots of groups and organizations were focused on other pressing and legitimate issues within the remarketing field. So the IRBR was formed by companies who either are in the market solely and directly online, or who represent vendors focused on this new marketplace. As this is a group of national company principals, and time is always at premium, devotion to this cause was not undertaken lightly and it took a while to define the mission and how it would operate. At CAR, we ironed out the final organizational issues and became ready to put on our first “public” presentation, the next day at a scheduled panel presentation at CAR.

After the IRBR meeting, Driveitaway sponsored the lunch at which the International Automotive Remarketers Alliance (IARA) presented its Circle of Excellence Award and keynote address by Jim Hallett, President of the Columbus Fair Auto Auction. Hallet was instrumental in the creation of one of the largest auto auctions chains, and his talk captured the essence of the theme of the event: letting go of outdated practices and embracing positive change. The Circle of Excellence Award was given to commercial fleet veteran, or maybe more accurately, commercial fleet “legend,” Jim Frank, CEO of Wheels Inc. I can think of no one in our industry more deserving; Wheels is the fifth largest fleet management company in the country, privately owned and managed by Jim for the last 30 years or so. Remarkably, Jim’s father, Zollie Frank, actually invented the fleet lease industry (how many people invent an industry?) 50 or so years ago in Chicago, out of his franchised new car dealership (a dealer group that Jim’s brother still operates today). The Franks qualify as one of the car industry’s legendary families in that regard, and it was great to see Jim recognized both for his industry achievements and his many, many charitable undertakings.

Next came the IARA roundtable presentations, one on vehicle pricing/values and the other on IARA’s launch of the industry’s first-ever certification program for remarketers, to be known as the Certified Automotive Remarketing (CAR) program. The establishment of a certification program is another testament to how far the remarketing industry has come, as it marks the disposal and distribution of used cars as a true specialty, rather than the mysterious “backwater” art it was thought of for many years. It also marks a milestone for IARA in my opinion, a furtherance of its mission statement, “to assist, educate, and share knowledge with one another and our industry partners, so that each member may be empowered to achieve the fullest efficiency and most continued improvement attainable in the commerce of selling vehicles through the marketplace,” moving the industry forward as an active and vital trade group.


The Official CAR Kick-Off, and our Special Introduction
The core CAR conference kicked off with a keynote address by Eric Overby of Emory University’s Goizueta Business School, who presented the results of his research comparing and contrasting the effects of physical v. online automotive auctions, and how electronic auctions effect prices. No specific upstream remarketing research study presented here yet, but the fact that serious academic research exists on this online remarketing subject at all indicates the level of seriousness now regarded the topic. Overby’s presentation was followed by the opening networking reception, where I usually get to say hello to some people I’ve seen only from a distance in the previous seminars of the day, or some people that might have arrived late to the conference.

My company this year decided to do a few special events in coordination with CAR, based on the pace of developments in the field of remarketing and its impact on both market specialties (upstream remarketing for commercial fleet managers) and on the U.S. auto industry and economy in general. Many automotive press reporters are only now beginning to understand the significance of the used car market, and we thought that a primer on the composition of the used car market, the fleet business, the role of physical auctions, and the growth of various new methods of disposal in the marketplace, would help people new to this area get the most from the advanced remarketing CAR seminars offered the next day.

Our answer was to present a 90-minute industry primer. We were privileged to have this summary analysis presented by one of the most esteemed (and most quoted) personalities in the field, Tom Kontos, Vice President, Adesa Analytical Services, of the Adesa Auction chain, the second largest (and only public – NYSE: KAR) auto whole car auto auction group in the country, and the largest auto auction chain in Canada. We couldn’t have found a more learned authority to address this group, as Tom is the author of the widely followed Global Vehicle Remarketing (GVR) and Pulse, which provide comprehensive analysis of strategic trends and issues relating to the 45-million-unit used vehicle market and the $460+ billion used vehicle industry in North America. Tom presented a well done summarized overview of the marketplace, and used excerpts from his most recently published research to highlight his eloquent overview.

Next Entry: CAR…Part II (marked by two industry firsts: the Upstream Remarketer of the Year Award, and insights from the inaugural Remarketing Advisory Panel)…


Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, Conference of Automotive Remarketing, Internet Remarketing Business Roundtable, International Automotive Remarketers Alliance, Upstream Remarketer of the Year, Automotive Fleet, Jim Frank, Tom Kontos, Global Vehicle Remarketing

Vol. 2 No. 12

Treating a Neglected Market Well Creates Opportunity for the NVLA

In a dynamic economy, service voids don’t go unfilled for too long, especially in the automotive industry. For example, for many years, new car dealership neglected merchandising and convenient servicing, figuring their market was captive. There was nothing “quick” about getting an oil change at a dealership, nor was it typically inexpensive. From that market void, in the 1970’s and80’s grew “Jiffy Lube,” “Midas Muffler” and other quick service automotive maintenance chains. Similarly, the many small businesses around the country who run small fleets of commercial vehicles and have unfulfilled transportation needs have become a target market for smaller commercial lessors, geographically dispersed all over the nation, and no better represented than in their trade group, the National Vehicle Leasing Association.

The National Vehicle Leasing Association (NVLA), has within its membership hundreds of small leasing companies in chapters all over the US, many of which focus on supplying vehicles and fulfilling transportation needs of smaller commercial accounts. The NVLA members take their job seriously, and each has pledged to a code of ethics and can complete a rigorous certification program in which they can earn the status of Certified Vehicle Lease Administrator (CVLA). I’d bet most automotive journalists would be surprised to know the small commercial lease market is as large in aggregate as it is, and that there has been for many decades a national multi-chapter lessor trade group with hundreds of members dedicated to serving this clientele in their local marketplace. Of course, many of these “small” leasing companies actually have corporate clients who maintain what is categorized as large fleets as well. (As we used to teach in the old Ford Business Preferred courses, the neat thing about successful small business is that they become large business, and typically feel a loyalty to their original vehicle vendors.) Bbut none of these lessors, I have found, ever lose their “personal” service touch with their clients and customers…and it has given them the edge over the largest of lessor vendors.

We recently hosted a reception created and managed by NVLA veteran Bill Thomas (CVLE) of Excel Management Dynamics for some of the best, most successful examples of these lessors at couple of “twenty groups” (that is, a focus group of operators from similar companies in the same market, though differentiated geographically, coming together to concentrate on ways to improve business). We will see them all again both in their special focus groups and, in general, with all of their fellow members at the NVLA annual conference and exposition, June, 7-10, in Grapevine, Texas.

I should note that I have special admiration for the member lessors of this group, not only because they have proved successful in satisfying the transportation needs of local businesses (I should get out of the habit of saying “small” business; some of these client companies are rather large by any standard), but because they have done so through leasing vehicles during both good and bad times - during times when the manufacturer held captive finance companies, through economically irrational “buy down” or residual incentives were making it almost impossible to compete as an independent bank financed lessor, and through the subsequent “pull back” that happened afterward, when residual values collapsed and non-captive independent banking sources dried up lease funding.

For decades the leasing professionals within the NVLA group survived and prospered on good old fashioned superior customer service for their clientele, instead of using the short term financial “buy down” gimmicks that vehicle manufacturers throw on the marketplace to lift quarterly sales numbers (which created the very real collapse of both new vehicle residual values a few years ago and the severe pull back in retail leasing from which the industry still has not fully “unburied” itself). They also did this holding their membership to the highest standards in ethics and by promoting member education as a means by which to raise the standard for client service conduct and, in that way, increase their volume of business collectively. It’s proof in a way, that the fundamentals of good business practices are ultimately what works in gaining clientele long term, particularly for grass roots businesses, even in the “incentive of the moment” environment of sourcing new vehicles.


Technorati Tags: Driveitaway, upstream remarketing, fleet sales, fleet manager, John Possumato, National Vehicle Leasing Association, Certified Vehicle Lease Administrator, Ford Business Preferred