Lights, Cameras, Auction

Of the many ways to participate in an auto auction, Manheim Auctions' 180-seat bidding theater is among the most unusual — and comfortable.

Participants sit in cushy armchairs, view off-site auction vehicles on jumbo screens and use individual bidding terminals.

“There are lots of ways to buy and sell a car,” says Hal Logan, Manheim's senior vice president of strategic planning.

The cinema-style theater, featuring upscale modern decor and mood lighting, lets buyers view crisp vehicle images on the big screens. Zoom technology enables bidders to view the smallest details of a vehicle. Interactive software tracks the bidding process during the live auction action.

“Only six years ago, the car, the dealer and the auction all had to be at the same place,” says Randy Beil, BMW Group Financial Sales manager-vehicle sales and logistics. “Now all three entities can be at separate locations. We at BMW feel this is a huge opportunity.”

As a cutting-edge example of how far auto auctioning has come, the theater is in the right place. It is part of Manheim DRIVE, a 145,000-sq.-ft. facility for advanced thinking. It is in Stockbridge, GA, near Manheim headquarters in metro Atlanta.

Open about a year, Manheim DRIVE is an innovation center that has research and development facilities, a vast reconditioning and body shop, conference rooms and learning labs where employees get the latest training.

The facility has served as a testing ground for various technologies, including radio frequency identification and biometric (fingerprint) registration.

It essentially is a remarketing think tank.

“Everything we are doing here is an attempt to improve remarketing efficiencies,” says Manheim CEO Dean Eisner. “When you walk in, ideas start happening. People are encouraged to think differently. If it is here, it is different and new.”

But, Eisner adds, it has to pass the test of real-world application. “It must be workable for it to leave here,” he says.

An automated photo booth and digital video recording (DVR) image storage are two technologies that passed Manheim DRIVE's proof of concept. They now are being field tested.

For auction webcasts, the photo booth is a controlled environment for capturing consistent, high-resolution digital images of auction vehicles. It is intended to allay Internet bidder fears that web images might not give true representations of used-car conditions.

The photo-booth process captures six images per vehicle, names them and quickly posts them to web servers.

The DVR system's cameras monitor various locations at an auction. Each camera's feed is captured and stored. With a few key strokes, auction personnel can investigate incidents (such as how a vehicle was damaged) or review bidding sequences.

The DVR system is being used at Bishop Brothers Auto Auction in Atlanta for lane monitoring, arbitrations and security.

About 10,000 guests attended more than 600 events during Manheim DRIVE's first year, including two industry conferences, nine live sales and 166 training classes.

Proprietary brainstorming sessions include predicting changes that will affect automotive remarketing in the next 10 years, raising the value of vehicles at auction, increasing retentions and accelerating customer-service initiatives.

“The remarketing business is one of the most complex and intellectually challenging,” says Logan.

Adds Eisner: “Historically, vehicle remarketing was considered as disposing of cars you didn't want. But over the years, there has been a recognition that the 43 million used cars sold each year impacts the 17 million new cars sold annually.”

Remarketing is transforming from an art to a science, says auto analyst Mary Ann Keller. “Using technology has a huge impact on profit returns for used vehicles,” she says.

In the past, many dealers poorly managed their used-car inventories, says Keller, but now software programs that systematically track sales, profits and inventory turns help dealers “get the right cars on their lots and get rid of the bad ones fast.”

As cutting edge as Manheim DRIVE is, some auction traditions are preserved.

For instance, the bidding theater setup is such that an auctioneer need not be present. Nevertheless, a fast-talking auctioneer is there, after some initial sales without one. Bidders said it was too quiet.