Automotive News - September 22, 2008 - (Page 30)

30 • SEPTEMBER 22, 2008 remarketing Auction group’s new boss sees dip in volumes Arlena Sawyers asawyers@crain.com Bob McConkey Title: President-elect, National Auto Auction Association Age: 47 Business: President, DAA Northwest, Spokane, Wash. Personal: Married, 3 sons Quote: “With less new-car volume and leasing out of vogue, we’re having supply-chain challenges.” resents 314 auto auctions in the United States and Canada. McConkey said the auction association is studying whether to develop common standards within the next year for electronic vehicle-condition reports. The standards would create uniform language and procedures for vehicle inspections and damage descriptions, he said. Such standards would benefit the industry, McConkey said. But he noted that “all we can do is recommend standards. More important than the specific standards is to agree on a spirit of cooperation.” DETROIT — Current declines in new-vehicle sales and leasing will afflict the used-vehicle market for years, the next president of the National Auto Auction Association predicts. Bob McConkey said plummeting sales of new cars and trucks are generating fewer trade-ins available for remarketing at wholesale auctions. In addition, a pullback on leasing by lenders will cut the number of off-lease vehicles sent to auctions in two to three years, he added. McConkey, 47, is set to become president of the auction association next month at its annual meeting in Washington. He is president of the DAA Northwest auction company in Spokane, Wash. In an interview here, McConkey said the auction industry must adjust quickly to the prospect of lower volumes. The industry must focus on improved efficiency by standardizing practices and procedures, he said. Big challenges “With less new-car volume and leasing out of vogue, we’re having supply-chain challenges,” McConkey said. “We’re faced with economic challenges as we go through this year and the next several years.” Ira Silver, the association’s chief economist, JOE WILSSENS Bob McConkey: Auction industry must adjust. predicts that its member auctions will sell about 9.4 million used vehicles this year, a 1.5 percent decline from 2007. The association rep- Family business McConkey grew up in the auction business. In 1954, his father and three partners bought a Seattle auto auction. In 1961, his father became the auction’s sole owner. McConkey said he learned to drive at age 7. “By the time I was 10, I was driving a stick,” he recalled. “I started working at the auction — picking up garbage, checking in cars, cleaning up the shop after the detailers were done.” In 1980, at age 18, McConkey became manager of the auction’s fleet, lease and reconditioning operations. Five years later, McConkey’s family sold the business to GE Capital Auto Auctions, a division of General Electric Co. In 1991, GE sold its auctions to Manheim. After the sale of the family business, McConkey stayed with GE Capital, managing the Seattle site and then the GE auto auction in Fontana, Calif. In 1989, he left the industry for three years to try his hand at real estate auctions — long enough, he says, to realize how much he missed auto auctions. In 1992, McConkey and a childhood friend, Greg Mahugh, opened DAA Northwest. “I was free to do what I wanted, instead of being trapped in a family business,” he said. “But after being out of it and looking at it objectively, I realized it’s just a great business.” McConkey, who is married with three teenage sons, said he looks forward to the challenges of his presidency of the auction association: “We have a year of challenges and opportunities.” c Wholesale prices of big used trucks rise 8.6% in August Average wholesale used-vehicle prices, August Average price August 2008 Average price July† 2008 Average price August 2007 % change vs. July† 2008 % change vs. August 2007 Arlena Sawyers asawyers@crain.com Cars Small and midrange Sporty Traditional Upscale Total car Light trucks Small pickups Full-sized pickups Minivans Full-sized vans Lower midrange SUVs Large SUVs Other SUVs Total light truck TOTAL WHOLESALE $8,881 12,724 7,417 12,531 $9,490 $7,003 9,592 6,985 6,746 8,907 9,908 13,835 $9,592 $9,572 $8,781 12,625 7,573 12,178 $9,386 $6,858 8,829 7,075 6,453 8,518 9,783 13,472 $9,231 $9,334 $7,891 12,775 10,929 12,512 $8,876 $7,568 11,518 7,593 8,273 10,108 12,790 14,642 $10,719 $9,788 1.1 0.8 –2.1 2.9 1.1 2.1 8.6 –1.3 4.5 4.6 1.3 2.7 3.9 2.6 12.5 –0.4 –32.1 0.1 6.9 –7.5 –16.7 –8.0 –18.5 –11.9 –22.5 –5.5 –10.5 –2.2 Note: Based on approximately a half million AuctionNet wholesale vehicle transactions a month †July revised *Includes standard and premium crossovers and small, upper midrange and premium SUVs Source: ADESA Analytical Services based on AuctionNet data and Automotive News market classifications Wholesale prices of big used trucks rebounded in August, as gasoline prices stabilized and overall used-vehicle sales by franchised auto dealerships rose slightly. But auction prices of used vehicles — especially large SUVs and fullsized pickups — remained well below year-ago prices, the nation’s two largest auto auction companies report. Last month, the average full-sized pickup sold at auction for $9,592 — 8.6 percent higher than in July 2008 but 16.7 percent lower than in August 2007, according to ADESA Inc. Large SUVs sold at auction in August for an average price of $9,908 — up 1.3 percent from the previous month but down 22.5 percent from August 2007. By contrast, last month’s average wholesale price of small and midrange cars was $8,881, which was a 1.1 percent increase from July 2008 and a 12.5 percent jump from the year-ago month. All figures and percentages are based on monthly averages. Tom Kontos, ADESA’s executive vice president of customer strategies and analytics, said the August price increases for large used trucks suggest that values in the segment have bottomed out. Hurricane Ike forced oil refineries near Galveston, Texas, to shut down temporarily last week, causing U.S. gasoline prices to spike. But Kontos predicted the effect of that increase on used-vehicle prices would not be significant. “That should not have a big impact on trends we’re already seeing in wholesale,” Kontos told Automotive News, “with the prices beginning to firm a bit.” Tom Webb, chief economist of Manheim, agreed that prices of large SUVs and pickups have rebounded. But he warned: “It would be a stretch to call pricing in these segments strong.” In August, Manheim’s index of used-vehicle value rose for the third straight month. The index stood at 110.7 last month, up from 109.9 in July and 107.8 in June. But it remained far below the August 2007 index of 115.1. c Turn to page 32 for the Used Vehicle Auctions ENTER A BID WHEN YOU WANT TO. EVEN IF YOU’RE IN BUTTE, BANGOR OR BOSTON. Wherever you are, you can ﬁll your inventory 24 hours a day, 7 days a week just by clicking on ADESA.com. Give it a try and see just how easy it is. ©2008 ADESA, INC. Log on to DealerBlock today. http://www.ADESA.com http://www.ADESA.com http://www.ADESA.com

Table of Contents Feed for the Digital Edition of Automotive News - September 22, 2008

Credit-crunched BMW to cut volume and jobs in U.S. Did dealer pitch have a catch? Henderson will keynote World Congress Suppliers: Chrysler jury a worry Learn how going green can be good for business Hyundai hesitates on i10 Ram launches with incentive Dodge RamBox cost: $1,895 Toyota seeks bids to build A-BAT Volt: A pricey short hauler? A horse of a different, uh, color Delphi work moves to N.Y. from plant in Mexico GM store count down 226 so far this year Bill Heard shuts Arizona dealership Would Mazda2 hurt Mazda3? Chrysler dealers may see Volt fighter GM gets more bucks for its 4-bangers GM's '09 list prices rise 2.7% Suppliers seek piece of loan package Don't attach too many strings to federal loans Cars run on money and credit, not gas The workplace is a democracy? Free Choice Act must be defeated Extreme makeover Logo no go A 4-cylinder Cadillac? Get real A double standard on idle workers? Free Choice Act means no choice Saccucci: Let's hear it for free enterprise Dealers signal support for 35% estate tax rate Dealers Designing for MPG Slippery styling What happened to Volt's racy design? Aerodynamics Belletech will supply Honda in Indiana Practicality will top panache at Paris show Chrysler seeks to build loyalty with service Band buddies Personnel Auction group's new boss sees dip in volumes Wholesale prices of big used trucks rise 8.6% in August Big-truck sales off 22.6% in Aug. August sales in Europe worse than in U.S. Honda will let supplier assemble on-site at Ohio plant Farley: Retool image for era of the small car O'Donnell: No stranger to U.S. Honda to debut camera, airbag American Axle lands contract Ex-Ford dealer prevails in court Dodge plans Web blitz for Ram Federal-Mogul will idle 4,000 Sparks will fly over GM, Toyota plug-ins Negotiations fail; chaos (allegedly) ensues Bo plays defense, helps GM avoid weather woes Critics say the new Volt was jolt Lithium, schmithium-- Will the ladies like it? Small and beautiful-- mutually exclusive? Where Andrea Pininfarina saw design headed Designers think small to make it big Designers can't ignore history Pretty and petite Toyota goes its own way with green designs The elements of style It's difficult to design fuel efficiency into big pickups Specialty-car maker has bright design ideas Form follows fashion Vehicle designers aim to please Chinese Suppliers to the 2009 Dodge Ram Eaton will equip '09 VW Golf IAV to move into new tech center BorgWarner makes Tesla deal Mann plans 4th China plant NovaCast buys into Korean firm Valeo shifts rear-light work Supplier personnel

Automotive News - September 22, 2008

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