Members of the National Auto Auction Association (NAAA) sold almost 9.5 million vehicles in 2002 to the tune of $80 billion. We are the source of virtually all pricing data that is used for the used-vehicle price guides, as it is the most consistent, regularly updated, and truest pricing in the market. Dealers take vehicles in trade, wholesalers move vehicles, and retail sales prices are established all based on what happens at the auction. As a result, all other remarketing methods are compared to the “auction way.” The wholesale used-vehicle market is almost perfectly competitive. We bring thousands of buyers and sellers together for relatively little cost, a system that has worked for decades and will continue to work.

Despite the impressive performance of the auction industry, we are not always considered as the first choice for remarketing vehicles. Our mission is to be the best and therefore first on the list. We will conduct industry studies looking at our customers’ needs, how we can service those needs, and trends within and outside the industry. We will be evaluating other modes of remarketing and how they perform as well as their interaction with our traditional auction process. We will study not only the cost differences, but more importantly the total return on the inventory. Questions to be answered:

How do we define the value of the live auction process?

How does the cherry picking of certain models in so-called upstream selling affect the balance of the cars being sold?

How is dealer attendance at live auctions being affected by static Internet sales and how does this affect values?

How are future residual values affected, as well as the ability of consumers to be able to trade and start the cycle over again?

How is this affecting profitability of the new-vehicle side of the equation, as the new and used are inextricably linked?

NAAA members are not myopic. We know there are ways to improve the return to our customers. This, after all, is our primary function in this industry: providing the most effective marketing services allowing our customers the highest levels of service. This includes providing the best marketplace to exchange automobiles in the world. Look at all the auctions have done to date:

• Guaranteed titles and checks.

• Vehicle history reports.

• Electronic funds and floorplanning.

• Electronic dealer database, market reports, registration, and inventory management.

This is in addition to the logistics auctions provide, such as transport, reconditioning, and secure storage. We are always looking for ways to be more efficient.

And we will be studying the NAAA itself. How do we as an association best serve our members and this great industry? Are we structured in such a way to help our members and customers identify areas of opportunity and provide the services to execute these strategies? How do we develop greater feedback from our remarketing partners?

We must accept the responsibility to educate our industry on trends and our place, our value to the industry. We will be more visible, not just the office of COO but the entire association. We aim to be the site people come to when they want to know more about auctions, and indeed the remarketing industry as a whole. We will gather the vast resources we collectively have and share our value proposition with our customers. We feel confident the benefits of using auctions will be evident and we will remain the first choice for remarketing automobiles.