« Home | Vol. 3 No. 5 Special Guest Writer Demetra Markopo... » | Vol. 3 No. 4 NADA 90th Annual Convention, Part II ... » | Vol. 3 No. 3The JD Power Roundtable & the 90th Ann... » | Vol. 3 No. 2Time for the Annual 2006 in Review (or... » | Vol. 3 No. 1Time for the Annual 2006 Review (or ho... » | Vol. 2 No. 35 The First DealerTrack Innovation Co... » | Vol. 2 No. 34 J.D. Power Automotive Internet Roun... » | Vol. 2 No. 33 Did the End of “Small Cars” Mark th... » | Vol. 2 No. 32 The Automotive Fleet & Leasing Asso... » | Vol. 2 No. 31 The Automotive Fleet & Leasing Asso... » 

Monday, March 26, 2007 

Vol. 3 No. 6

The IARA Roundtable & the 12th Annual Conference of Automotive Remarketing (CAR)

Although going back to Las Vegas so soon after the NADA Convention was even a bit soon for me, I, of course, looked forward to the annual Bobit Media Group event that elaborates on our niche in the car business, the grand daddy of all vehicle remarketing conferences, the Conference of Automotive Remarketing (CAR); held again this year at Caesars World, February 27th through March 1st. The Bobit folks were the first to recognize that the “art and science” of vehicle remarketing deserved a conference of its own back 1995, and I think it would not be inaccurate to say that it marked the dawn of a the new level of sophistication and technological advancement for the remarketing industry, the momentum of which continues to this day, which helped bring about companies like Driveitaway.com.

The IARA Roundtable Series

Once again, CAR itself kicked off officially at a reception the night of the 27th, but was preceded by the semi annual International Automotive Remarketers Alliance (IARA) Roundtable held that day. The IARA Roundtable meeting started with their annual “Circle of Excellence” award lunch, with a update on the new ambitious and impressive remarketing certification program IARA has created, and then, back by popular demand, a keynote address by Jim Hallett, still President of the Columbus Fair Auto Auction this month, but (if things go as planned) soon to be the President once again of the new privately owned Adesa Auction group by next month – Adesa is the company that Hallett originally grew into the second largest auction chain in the United States. Jim’s talk, once again, was insightful as to the future developments in the industry, and frankly, if there is a more dynamic character in this entire remarketing business, I have yet to meet one. The positive momentum of change that Jim will no doubt drive with his new (old?) platform I think will be beneficial for the entire industry and move things forward at a rapid pace…and it will be exciting to watch as well.

Unfortunately, the winner of this year’s Circle of Excellence Award could not be present to accept it. Warren Young, really one of the creators of the entire modern vehicle auction industry and no less than an industry icon, won the prestigious Circle of Excellence Award this year, but couldn’t make it out to the lunch. I’m sad to say I’ve only met Warren a couple of times, although, like anyone who has accomplished as much as he has in this business over the years, I’ve heard so many good stories about him and his achievements I almost feel like I know him. Hearing more about his activities at the luncheon award was very interesting.

After the IARA award lunch, came the roundtable presentations, one on “IARA Reconditioning – Methodology for Tracking Results” and the other on “Remarketing Salvage Vehicles.” The criteria for reconditioning is always a debatable topic, various sectors of the fleet business have varying views on “how much and when,” so it’s always good presentation when various sectors present the reasoning behind their policies. Also, while I do claim to have some knowledge on most topics that concern remarketing, I don’t know much about the remarketing of salvage vehicles, its almost a niche within a niche, a specialty all its own. I want learn more though, so this roundtable panel discussion was particularly interesting to me. This roundtable presentation, and insights from people like my new friend Doug Mellette from Vemark who came out to this conference, helped educate a “whole car” guy like me; that’s why I like the remarketing business so much, regardless of what you think you know, after two decades, there is still a whole lot more to learn.

The first day closed out with a reception officially opening the CAR Conference, and that’s always a good time to catch up with folks I hadn’t seen throughout the day. It was also the place, given the mix of attendees, that reinforced my idea garnered from a close inspection of the speakers list, that this CAR Conference, more than any of the others that preceded it, had a very strong mix of rental car operator attendees – from major rental car licensors, to licensees and independent car rental operators…more on this below.

CAR – Day 1

The core CAR Conference itself kicked off the first day with the usual welcome by Sherb Brown, Vice President and Group Publisher of Bobit Business Media, and, once again, everyone in this industry’s favorite emcee, Charlie Vogelheim, Vice President of Automotive Development, J.D. Power & Associates (Charlie is the premier car industry emcee at so many events, that indeed, I think that his name has to be the single most cited term in this blog, even over the word “car”).

The keynote address, presented by Jim Sanfilippo, Executive Vice President, AMCI Marketing, was entitled “Analyzing the Auto Industry’s Future and Effect on Used Car Values.” I have to admit, I came in a little late for Jim’s talk and I’m very sorry I did, as with what I did hear I could listened to him for half the day without a break. Next came a panel of factory consignors, that is, vehicle manufacturer remarketing folks, discussing the key issues they are facing in 2007. Then two short association presentation updates. The first, an update by IARA on its 2007 initiatives, which mostly centered on their creation of the industries first remarketing certification program, and its collaborative efforts with the NAAA. The second, an update by NAAA (National Auto Auction Association) initiatives.

Used vehicle grading standards (or maybe the lack of universal standards), have been a hot issue since I’ve been in the remarketing business, and is now even more important an issue with the increased percentage of online vehicle sales. The NAAA recently created a proposed set of standards, and made a presentation on this after updating the group on its 2007 initiatives. This was followed by the presentation of the results of a new study by IARA on establishing performance metrics for remarketing vehicles. Accurate universal grading standards and accurate remarketing performance benchmarks – two topics which, to be frank, seems to be kind of like the weather for vehicle remarketers, that is, everyone always talks about it but no one does anything…progress seems to be made now with these two leading industry trade association efforts, however.

The morning sessions ended with a panel presentation of upstream remarketers, one of the most interesting discussions for us, given what we do in this business. This area is constantly evolving, changing and consolidating. For instance, last year this time two of the largest wholesale upstream remarketers were ATC and Onlane, now merged into the same entity. Then, within 24 hours of this panel discussion, it was announced that one of the participants, Manheim’s OVE, bought another participant, Network Remarketing & Technologies, to consolidate a single unit. Fundamental structural changes I’m sure will continue to occur, as the “bricks and mortar” world merges with the online universe.

Along the same lines of the old world merging with the new, after lunch my old friend Raj Sundaram of ALG Guides now owned by DealerTrack, talked about dealer focused used vehicle inventory management, “Building Efficiencies Through Technology.” Then a panel discussion filled mostly with commercial lessors led a discussion entitled, “Remarketing Initiatives Among Institutional Portfolio Managers.” Now speaking of fleet industry evolution and consolidation and commercial lessors, as I put the finishing touches on this blog entry, it was just announced that GE Capital Solutions, which represents the largest commercial fleet lessor in the US, just bought PHH Corporation, the second largest vehicle lessor, which will form a commercial leasing giant that will have a combined portfolio of roughly one million vehicles. Change is constant, and it appears that industry consolidation in all ends of the fleet and remarketing business is as well…

The jam packed day concluded with a panel discussion on “Future Initiatives in Residual Values” with all of the major guide book editors represented – guidebooks, pricing, remarketing benchmarking, all major themes at any remarketing conference. And then things wrapped up with the annual CAR awards ceremony, recognizing the “Remarketer of the Year,” the “Consignor of the Year” and the individual “Best Auction” awards by factory and finance firms. Then it was time for the second evening networking reception.

CAR – Day 2

The second day of the CAR Conference kicked off with a presentation by Chip Perry, the CEO of AutoTrader, entitled, “Technology Matching of Vehicles and Buyers in 2010” – I can think of no one better to predict how the wholesale and retail used vehicle market will change over the coming years - as I’ve said before, for my money Chip is one of the brightest guys in the online car business today. Next the results of the latest Emercent study on remarketing and remarketing transport were presented (but unfortunately not by Julie Andersen, one of the founders of Emercent, as she had “transport” difficulties of her own…weather grounded her in cold Chicago so she couldn’t make the presentation herself). This was followed by a report by Steven Greenfield of Manheim on the globalization of the Auction Industry – with Manheim auctions now running in China, there is no better US based firm to present this macro global viewpoint.

Next came an educational presentation on “Maximizing Resale Using Data Mining” from Tom Libby, Senior Director, Industry Analysis of JD Power’s Power Information Network. I honestly think that used vehicle retail and wholesale sales data mining, in general, is not utilized anywhere near as well as it could be in this industry as compared to others, and the gap between what is available and what is used by most companies in the efficient remarketing of vehicles, is vast - with the exception of the manufacturer segment, who are very sophisticated using this type of data. Specifically, with both its retail and wholesale actual transaction and demographic data, PIN is for the most part an undiscovered resource for vehicle remarketers, and I predict that using this data, which is unbiased by any auction chain source or book reporting agency as its taken right from automotive retailers internal data management computer system (and, indeed, one of, if not the only source for actual retail transaction data – and retail transaction data always precedes wholesale trends), will be the next big thing in the evolution of remarketing methods.

After lunch, there was a presentation on one of the hot national consumer topics right now, entitled, “Latest Title Washing and Odometer Fraud Schemes,’ by David Sparks from the National Highway Traffic Safety Administration. While less prevalent than the “bad old days of 20 or so years ago (an old time use car dealer friend of mine has told me that back in the late seventies, some days it was rare to ever see a car that ran through the auction lanes with more than 45,000 miles – everyone knew what was going on, in volume, but no one did anything about it, back then), “clocked” cars with “washed” titles still trade in the market today. I never understood, in this age of digital data and imaging, why there is not one coordinated national title policy/service, and/or why each State’s DMV titling database can’t be hooked in with every other state’s database – I may be naive but that would eliminate the state by state DMV policies that create the ability for unscrupulous folks to “wash” titles right? Yet it each time a national policy bill appears before congress, it never seems to pass…that, even after the national focus on the volume of Katrina flood cars that are entering the marketplace right now. Hate to say it, but it seems that some lobbyist group or political action committee somewhere must be pushing hard against a national policy that would close this loophole…otherwise why the inactivity on what would seem to be such an innocuous piece of legislation? At any rate, on the same point, the day closed out with panel presentation entitled, “Impact of Electronic Titles on Remarketing,” the group discussed how the growing use of electronic titles by state DMV’s will effect remarketers.

After the learning the latest in odometer fraud schemes, appropriately enough, came a panel presentation on inspection processes (maybe a good inspection process reveals “clocking”?), moderated by my old friend Scott Kolb. As more and more remarketing sales are done online, to both wholesale and retail buyers, accurate vehicle inspections, with well taken pictures, has become a much more important part of the remarketing process. As such, an efficient, low cost, accurate and timely vehicle inspection is vital to attaining higher resale dollars, and, indeed, the Web is stimulating evolutionary changes in this formerly staid area of the business as well.

Finally, there was a very interesting panel discussion, entitled, “How Can Remarketing Channel Vendors Attract More Consignor Business?” A multifaceted topic, the panel could not have better chosen to represent many different sectors in the business, with representation from a large daily rental licensor, a large commercial lessor, a manufacturer captive finance company, and an large automotive independent credit company. This presentation, in particular, provided very informative input for what we do here at Driveitaway in our day jobs…

In summary, the CAR Convention this year was great success and had over 500 people and over 18 presentations and panel discussions. What was striking and different about this one though (and makes me think maybe I’ve chosen the right line of work these days), was the composition of both the attendees and some of panelists. In particular, for the first time that I can remember all of the major daily rental licensor remarketers where in attendance and two were eloquently represented on panel presentations at CAR this year. As the cover story for the Jan/Feb issue of Auto Rental News highlights, for the first time, major daily rental companies face a rapidly growing quantity of vehicles they own and need to remarket in their fleet, as opposed to short term leased “program” cars bought back and disposed of by the manufacturers. What was a trickle of “risk” cars the beginning of 2006, has turned into trend this year, and as Sherb Brown’s editorial suggests in that same issue of Auto Remarketing, new focus and methods in remarketing for this sector of the industry will surely follow. The 2007 Manheim Market Report that was released at the NADA conference in February predicts that over half of the rental industry fleet this year will be “risk” vehicles (units that the rental companies own and have to remarket themselves, with no buy back guarantees), which represents a basic fundamental paradigm shift in the way rental cars will be remarketed in the near future (except for Enterprise, which always retaiend a large dedicated staff devoted to both wholesale and ‘direct to consumer’ retail vehicle remarketing). Paradigm shifts and educational market conferences go together well, I think, and, that made me particularly glad I attended this CAR conference, and, particularly glad I’m in this business today…

Links to this post

Create a Link


Powered by Blogger
and Blogger Templates