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August 17, 2009
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SmartAuction Nudges into Manheim Turf By Jeffrey Bellant
Manheim has stopped facilitating in-lane and online thirdparty vehicle sales for GMAC SmartAuction because it views those transactions as competing with its own offerings. Mike Broe, Manheim’s executive vice president of U.S. operations, said the policy change came up earlier this year when Manheim became aware of changes in SmartAuction’s selling practices. “Part of our challenge was separating GMAC as our customer from SmartAuction as a competitor,” Broe said. Manheim had acted as a facilitator for GMAC SmartAuction sales, providing services such as marshaling vehicles. Broe said concerns arose as Manheim was being asked to perform services at SmartAuction sales that included nonGeneral Motors Co. franchise buyers or non-GMAC sellers. “When it became apparent that Smart Auction was becoming very aggressive about finding other (parties) – dealer sell-
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ers or other commercial sellers – to sell in that environment, that really didn’t interest us,” Broe said. Broe emphasized that Manheim will continue to sell cars from GMAC to GM franchise dealers through traditional physical auctions and Manheim’s OVE online system. “We value our relationships with General Motors and GMAC tremendously,” he said. “They’ve historically been one of our largest consignors nationally.” However, Broe said SmartAuction began seeking vehicles outside of its GM/ GMAC units that sold via OVE or Manheim physical auctions and has been looking to sell them to dealers outside of their regular GM franchise buyers. He said SmartAuction had been pursuing independent dealers to purchase its vehicles for “quite some time.” Broe said it became clear that SmartAuction’s business model was to compete with Manheim and other National Auto Auction Association members. Earlier this year, Manheim contacted GMAC and General Motors Co. to explain that it would handle those vehicles differently, i.e. not allow thirdparty sales that didn’t include the traditional GMAC/GM units. Manheim will no longer handle the sale of vehicles sold on SmartAuction, nor will Manheim handle the physical aspects involving the movement of the vehicles through the process, Broe said. He added that Manheim will also not allow other consignors to post cars with SmartAuction while they are on Manheim property. A spokesman for GMAC said the company was not going to
Photo by Jeffrey Bellant CERTIFIED Monicatti Motors, a former Chrysler-Jeep dealer in Sterling Heights, Mich, advertises its own certification program. Former franchise dealers are seeking alternatives to replace manufacturer certified programs.
Independent Certification Programs Fill Void By Ted Craig
Losing a franchise strips a dealer of one of his best used-car sales tools - the manufacturer’s certified pre-owned program. There are a number of independent certification programs available to dealers. One of these is the National Independent Automobile Dealers Association’s partnership with National Auto Care. This certification comes with either a three-, six- or 12-month warranty. Another independent program comes from National Vehicle Certification Program Group. Founders Rob Gaither and Tom Middaugh both sold cars before meeting up and starting their certification service. A unique aspect of the National Vehicle certification is oil analysis. This chemical procedure predicts if a lubricating component will fail soon. Continued on page 7
comment on the matter. The NAAA recently posted information about the issue online: “We recognize that SmartAuction is owned by GMAC and has primarily been a ‘closed’ online
sale for GM and GMAC. However, in addition to selling vehicles for GM, GMAC and GM dealers, they now directly compete with NAAA auctions by soliciting vehicles upstream from existing NAAA auction cus-
tomers. The line is more than a little blurred as to where customer stops and competitor begins.” NAAA stated that it wanted to clarify that Smart Auction was not a NAAA member.
IN THIS ISSUE • The future appears brighter for the used-car industry. – Page 3
• A recent college graduate opens shop as a used-car dealer. – Page 8
• A large Northeastern dealer sells his stores to follow higher calling. – Page 4
• Giving back to the community brings a variety of rewards. – Page 13