With a glut of off-lease vehicles returning to market, the nation's two largest auto auction groups are doubling down on the concept of velocity -- albeit in slightly different ways.
Velocity, or the pace at which used vehicles move through auctioning and onto dealership lots, has become an industry buzzword of late. That's because more than 3 million off-lease vehicles are to return to market this year. That tidal wave makes it crucial for auctions to move used vehicles quickly to avoid further depreciation of the vehicles while they are on auction lots or in transit.
The issue faces auctions nationwide, including the two largest U.S. auto auction groups: Cox Automotive's Manheim and KAR Auction Services Inc.'s ADESA. The companies' success in moving vehicles faster will go a long way toward determining the pricing strength of used vehicles in a market coming off a new-vehicle sales peak.
Manheim and ADESA are taking similar approaches, at least on the surface. Both acknowledge the need to move vehicles quickly to address the steady stream of returning vehicles.