![]() ![]() Before the pandemic, LaFontaine acquired roughly 40 percent of its used inventory from auctions, Max Muncey, the group's senior manager of corporate communications, told Automotive News. ![]() Highland, Mich.-based LaFontaine Auto Group, for instance, has changed its entire acquisition approach the last few years. ![]() in annual vehicle sales, company executives said.Ĭhuck Tapp, America's chief revenue officer, told Automotive News the company is tailoring itself specifically to dealers, who supply the vast majority of the vehicles it sells.īut dealers continue to accelerate their hunt for inventory beyond auctions. As a larger player, the 39-auction company aims to nab more market share in the shifting wholesale space and overtake ADESA U.S. The combined entity rebranded under the name America's Group in 2022. The other big move occurred in December when auction company XLerate Group acquired America's Auto Auction. Some buyers and sellers that left ADESA did return after the transaction closed, and some large commercial sellers later bumped up the number of vehicles they sent to ADESA, according to Carvana. Carvana even pointed to "attrition of certain customers" post-acquisition to explain in part a volume decline of almost 10 percent for ADESA's marketplace unit between 2022's first and second quarters. The blockbuster deal solidified the online retailer's status as a wholesale player and triggered backlash by some dealer and automaker customers which left ADESA auctions. auction unit from wholesale giant KAR Global sent waves through the industry. ![]() Two major acquisitions have altered the wholesale market in 2022.Ĭarvana Co.'s May purchase of the ADESA U.S. Yurchenko estimated that volume sold on dealer-to-dealer platforms has at least doubled from 2019 to 2021, though he didn't provide actual numbers. Meanwhile, the number of vehicles sold through other channels is growing. Sales volume for the first eight months of 2022 has tumbled sharply, down 29 percent to 3.8 million vehicles. Power's AuctionNet, which tracks more than 80 percent of the nation's daily auction sales, reported that annual volume at major auction houses dropped from 6.9 million vehicles in 2019 to 5.8 million in 2020 before jumping back to 7.6 million in 2021. Sales at physical auctions have also dropped, according to Black Book's Yurchenko, decreasing significantly since the start of the pandemic from about 11 million vehicles in 2019 to less than 9 million in 2021. NAAA compiles the numbers by surveying its members. The National Auto Auction Association said 11.6 million vehicles entered physical lanes and digital auction lanes at its hundreds of member companies in 2021, down from 13 million vehicles in 2020 and 16.5 million in 2019. "They have to get inventory, and they go directly to consumers, they go to repair shops, anywhere the consumer has a car." "Dealers are getting more intelligent," Alex Yurchenko, Black Book's chief data science officer, told Automotive News. The changes come as they also scramble to prepare for an influx of electric vehicles to their auction sites, another disruptive shift in motion. The shifts have auction company leaders on their toes as they pivot to keep pace with dealers' evolving sourcing preferences and digital auction demands. "The availability of those cars eliminated a lot of what we used to buy at the auction." "Even more frequently, the customers themselves are selling their car directly back to us or trading it back to us," said Bill Wallace, president of his namesake auto group in Stuart, Fla. Wary of slim pickings at auctions and mindful of the cost of traveling to them, dealers are increasingly skipping such buying trips. The latter approach especially gained popularity as wholesale vehicle prices spiked in 2021 because of the shortages. For dealers, the disruption has cemented their interest in online auctions, peer-to-peer digital sourcing options and - perhaps most of all - buying more of the used inventory they need directly from consumers. ![]()
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