Automotive News Canada - September 2019 - 4

* S E P T E M B E R 2019

Speed is of the essence in moving
used vehicles from auction to
customer, said Toronto dealer Craig
Cowling. "What you want to do,
if possible, is a two-day turnaround."
PHOTO: PERRY LEFKO

Their Santa Fe
was no great shakes,
so Hyundai dealer must
pay owners $2,001
By ERIC FREEDMAN

LEGAL CORRESPONDENT

For auctions,
the future is

VELOCITY

Companies work
to speed the process
of buying and delivering
vehicles to retailers
By JOHN IRWIN
TORONTO BUREAU

AS SALES OF USED CARS BECOME
increasingly important to a dealership's bottom line, retailers and their
vendors are working to increase
"velocity," or the speed at which vehicles move through the auction process
and are sold to customers.
"The longer they sit, the more they
cost," said Craig
Cowling, general manager of
Roadsport Honda
and Roadsport
Chrysler-DodgeJeep-Ram in
Toronto. "The
days of it taking
seven to 10 days
Shorter bidding
for it to be able
times make
to be sold - to
be lot-ready, let's dealers' lives
easier, said
say - you've
TradeRev
missed the boat.
President Becca
What you want
to do, if possible, Polak. "We're
is a two-day turn- just trying to
meet their needs
around."
and go to where
A glut of used
our customers
vehicles returnwant to be," she
ing to the marsaid, "and that's
ket and shrinking fast."
margins on sales
of new vehicles, as well as the usual
threat of vehicles depreciating as they
sit on the lot waiting to be sold, are putting pressure on used-vehicle departments to sell inventory quickly.
Roadsport recently bought a new
building that is used as a reconditioning centre for used vehicles. The
dealership plans to hire an additional
technician there to speed up the process, Cowling said.
"It's funny because even 15 years
ago, dealers weren't really in the tire
business, either, where now they realize it's a necessary evil. You have to
get in it, and it's no different with used
cars.
"Pre-owned was generally just
there to almost support your new-car

department, whereas a lot of places now, your new-car department
is there to support your used-car
department."

BID AND BUY QUICKLY
Meanwhile, Canada-based digital
auction platform TradeRev recently reduced its auction times to 45
minutes from an hour in an effort to
boost velocity.
"I think it makes their lives easier by shortening the amount of time
they need to be bidding," TradeRev
President Becca Polak told Automotive
News Canada.
"We're just trying to meet their
needs and go to where our customers
want to be, and that's fast."
In addition to shortening auction
times, TradeRev reduced the closing
period - when the top two bidders
on a vehicle compete after an auction
- to 15 minutes from an hour.
The largest North American auction groups - Cox Automotive's
Manheim and KAR Auction Services
Inc.'s ADESA - in the past few years
have had to grapple with the concept
of velocity, as dealers in both Canada
and the United States deal with high
numbers of used vehicles returning
to market. According to Canadian
Black Book, between 30,000 and 40,000
off-lease vehicles were expected to
return to the market each month
through 2021, up from a previous
norm of about 20,000.
The problem even extends to digital auction platforms such as KAR's
TradeRev and mobile auction services used at Manheim.
"Time is money, and you want to
move," KAR CEO Jim Hallett said.
"That dealer might be waiting to
clear this inventory so that he can
buy that inventory, right? In many
cases, he may be saying, 'I need to
know if I own it because if I don't
own it, I have a chance to get something else over here.' "

GETTING TO THE LOT FASTER
Polak said the logistics of transporting a vehicle are also crucial to
speeding up the auction process for
dealers. TradeRev has a goal of transporting a vehicle bought within 75
kilometres of a dealership within two
days, but she said more can be done
by using data.

Maybe [the vehicle is] even
on their lot before they even
bought the car. We just know
[by using data] that's the right
car for you, so here you go.
BECCA POLAK

TradeRev President

"Obviously, at some point we'd
like to tighten that up to maybe it's
even on their lot before they even
bought the car," Polak said. "We just
know that's the right car for you, so
here you go."
TradeRev partners with its fellow
KAR entity ADESA on hauls of less
than 100 kilometres, using ADESA's
network of about
1,000 drivers in
Canada. ADESA
Canada COO
Trevor Henderson
said the company recently hired
about 300 drivers to increase its
shipping capabilities.
ADESA Canada
"The network
COO Trevor
Henderson says just doesn't exist
like it does in
the company
the U.S. So what
is investing in
we've been doing
shipping and
is investing a lot
logistics.
of capital and a
lot of human resources, building our
own logistics capabilities."
Still, for all the emphasis dealers
put on velocity, Cowling noted that
quickening the used-vehicle auction
and transaction process is only part of
the equation for a successful dealer.
"You have to really concentrate on
the back end, too: Your warranties,
your GAP coverage, your insurance
coverages," he said. "That is a very
important aspect because a lot of
times, because of the declining gross
profit in the front end, you do need to
pick it up in the back end in the business office as well." - ANC

AARON AND ANGIE HUGHES
encountered problems - particularly vibrations at high speed - soon after purchasing a used 2012 Hyundai Santa Fe. So they
brought the crossover to a Campbell River,
B.C., dealership for service, according to the
British Columbia Civil Resolution Tribunal.
After multiple repair efforts, the highspeed vibration problem ended. But a new
problem developed - low-speed vibrations
- according to the tribunal.
On July 19, the tribunal ruled that
Campbell River Hyundai must reimburse
the owners for the $2,001 they paid an independent shop to correctly diagnose and fix
the problem.
"Returning a customer's car in worse
condition than it was
in before performing
mechanical work falls
below any acceptable
standard for a mechanic," said Sarah Orr, a
tribunal member.
Orr denied the
owners' request for an additional $850 for
time and stress and dismissed their claim
against OpenRoad Hyundai in Richmond,
which sold them the Santa Fe.

INJURED WORKER CAN PURSUE CLAIM
A LONGTIME DEALERSHIP EMPLOYEE
who was fired can move forward with
claims before both the Nova Scotia Labour
Standards Division and the province's
Human Rights Commission, the Nova
Scotia Labour Board has ruled.
The board rejected objections by Colonial
Honda in Halifax to proceeding in both
administrative venues.
According to the July 22 decision, Craig
Whitman began working at the store in 1997
and was injured on the job in 2011. From
2013 through 2017, there was communication with "various medical or occupational therapists as to the degree of accommodation required in order for him to do his
work."
After the store terminated Whitman in
2017, he filed complaints with the division
and commission. The division concluded
that the store had terminated him without
cause and awarded $76,371. The commission
has not released a decision on his claim.

TRIBUNAL REJECTS TOOL-THEFT CASE
A SERVICE CUSTOMER WHO SAID
tools were stolen while his vehicle was
parked at a Victoria, B.C., dealership isn't
entitled to compensation, the provincial
Civil Resolution Tribunal held.
Murray Steen accused Wheaton
Chevrolet-Buick-Cadillac-GMC of negligently leaving his 2013 Chevrolet Avalanche
pickup unlocked or, alternatively, being
responsible for an employee's theft of the
tools.
The tribunal rejected the $2,891 claim,
finding no evidence that the store left the
Avalanche unlocked or that the tools were
even stolen. It also said Steen's waiver of
liability bars the claim.
"It was clearly written and there to be
seen in the same sentence as the work
authorization and on the same page and
section as the signature line," the tribunal
said.
Store General Manager Brant Roshinsky
said warning signs are also posted in the
lot. - ANC

Automotive News Canada - September 2019

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