AUCTION VOLUME TO RISE IN 2006, SAYS ADESA

Back to auctions: Sales should rise.

February 12, 2006—The slight decline in auction sales since 2003 is likely to end this year or next, said Tom Kontos, ADESA vice president of industry relations and analytical services, today. ADESA predicts auction transactions will rise by 200,000 units this year to 9.8 million. By 2010, volume should hit 10.8 million.

Why? Fleet sales, which leaped 500,000 units from 2003 to 2005, should keep rising at the same pace, speeding the flow of older fleet cars to auction. Meanwhile, the number of vehicles in operation in North America rose about 3 percent last year (as did used-car sales). Finally, lease penetration should rise to about 25 percent, then level off. Though this will boost the number of off-lease vehicles, fewer of them will actually make it to auction: Lessees and dealers are increasingly likely to buy them when lease terms end because wholesale used-car prices have firmed.

Kontos also noted the success of ADESA’s LiveBlock, which lets dealers participate in live auctions online. LiveBlock is now available for nearly all ADESA auctions, and use exploded in 2005. The number of vehicles sold online shot up some 110 percent, and the number of dealers using the site jumped more than 75 percent.

Also, the company announced a recent redesign of ADESA.com, with easier navigation, access to daily wholesale values and listings of vehicles for sale, a “Notify Me” feature that tells dealers when desired vehicles come up for auction, and help functions.