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Jun. 14, 2010 – Auction companies join forces

June 14, 2010
Filed under Features

Given the state of the market, you might expect industry competitors to be battling more fiercely, and cooperating less willingly, than ever before. But in spite of the economy, three specialty auction companies have worked hand-in-hand recently on a unique series of events designed to sell preowned Harley-Davidson motorcycles.

The competitors, Manheim Specialty Auctions, ADESA and West Michigan Auto Auctions, worked closely with Harley-Davidson Financial Services to jointly plan a nine-city sales tour that kicked off May 28 in Grand Rapids, Mich. Each auction — in what is being called the “2010 Road Rally” — will feature more than 150 late-model Harley-Davidson motorcycles.

According to the people involved, the events grew out of an idea from Carl Miskotten, general manager of West Michigan Auto Auctions and co-owner of Hot Rod Harley-Davidson in Muskegon, Mich. Miskotten presented the basic concept to HDFS and once they expressed interest, he contacted ADESA and Manheim.

“He invited us to a meeting to conceptualize it, and we loved the idea,” said Jane Morgan, president of ADESA’s Specialty Sales Division. “We are always looking for new and innovative ways to partner to best service our customers’ needs.”

Karen Braddy, general manager of Manheim’s specialty and heavy truck & equipment business, had the same reaction.

“In our planning sessions, there was a positive outlook about growing the business,” she said. “We’re friendly competitors, and throughout this we kept the customer’s best interest at heart.”

Each event features one day reserved exclusively for Harley dealers followed by a second day open to other dealers.

“Harley is very loyal to its dealers,” Morgan said. “So we first wanted to take care of them.”

To determine event locations, the auction companies submitted their top five desired sites to HDFS, which were then trimmed to three. Locations were carefully selected to reduce travel for Harley dealers, avoid competition with existing auctions and capitalize on car dealers who might want to pick up motorcycles.

“We wanted to bring the auction to the customers,” Braddy said. “And bring them to some markets that wouldn’t normally have auctions.”

Open dealer-only sales events, preceded by closed Harley events, are scheduled for: June 9, Chicago; June 30, Seattle; July 14, York, Pa.; Aug. 25, Denver; Sept. 8, St. Louis; Oct. 12, Austin, Texas; and Oct. 21, Tucson, Ariz. A Harley-Davidson dealer-only event is also scheduled for July 28 in Las Vegas.

For each of the auctions, dealers will have the option of bidding on items online — an added opportunity to buy and sell that has been on the rise in recent years.

“Manheim tracks online adoption rates monthly, and motorcycle dealers are one of the most savvy groups we’ve seen,” Braddy said. “Online sales have grown by double digits in each of the past five years to 43 percent of sales.”

Braddy notes online sales don’t replace the traditional auction completely, however, because dealers still like to get together to rub shoulders, kick tires and smell the exhaust.

For the events, Harley-Davidson dealers receive special HDFS and auction offers, such as free local transportation within 50 miles of the sales event, floorplanning assistance and simplified auction access registration.

Morgan says she thought the concept could work for other OEMs, but it all depends on inventory levels.

“You have to have pretty accurate predictions of inventory to make this work,” she said. “There’s a magic number with events like this to make it cost effective for dealers to travel to the sale.”

The other consideration, she says, is how many auctions an OEM already has. She says other companies have the financing and inventory necessary to make something like the Road Rally work, but they might not want to compete with their other auctions.

For more information and specific start times, go to getreadytorally.com. psb

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