March 17, 2022 | Market Insights from Bob McConkey.
Wow – the times we are living in are unprecedented in so many ways. Change has become an accelerating norm for us all. Throughout the past two years so much has changed as we have dealt with the economic and social impact of the COVID-19 pandemic.
Our businesses have changed dramatically, yet for the most part, we have all done very well. And now on top of all that has changed, the second-largest wholesale auto auction company has sold its entire US auction business and infrastructure to a company that has publicly stated that buying a car from a car dealer is a bad idea and is an outdated, inefficient, and painful experience. Its aim is not to disrupt, but rather to compete with dealers and dominate the used car retail market.
What does this mean for all of us? In my opinion, it means that we all must look in the mirror and decide who our friends are. Is Carvana your friend? Does Carvana have your success at the forefront of its strategy?
An auction (whether digital or physical) exists to be a service provider and an asset to its customer, the car dealer. Dealers support the efforts of an auction when that auction earns their trust. Earning the right to serve dealers is a day-by-day, week-by-week process – it never ends.
Carvana and ADESA’s strategy is to acquire and recondition vehicles that will be placed for sale in direct retail competition with the car dealer. This is not a partnership – it is predatory competition.
Here at MAG, we see the world very differently. Our roots in this industry go back to 1954 when my dad and three partners opened South Seattle Auto Auction. Our family remains committed to this business and its customers – we are determined to evolve and grow as we continue to support dealers. We have always known that our success directly depends on your success in retailing cars and trucks. Our role is to support you, the car dealer. It is why we opened our doors and it is why we exist today.
MAG Auctions has a full suite of tools to help the dealer navigate the growing complexity of the wholesale marketplace. This is what we do, and it is all we think about. Dealers are all over the map in terms of their preferences and methods of buying and selling inventory. Some love the auction lanes. Some prefer the hybrid approach of simulcast and an occasional auction visit, and some have completely evolved to digital platforms. We understand this and have developed our business to meet each dealer quite literally at a place where he or she is comfortable.
We are good at the core auction business and our digital tools are evolving to be the best in class. Most importantly, we are a company that exists to serve the dealers. We can be trusted to do the right thing for our customers with the sole purpose of contributing to their success.
President & CEO
McConkey Auction Group