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Automotive Auction House Manheim To Go Online-Only Permanently

Manheim is a huge and respected automotive auction industry company. They have been around for decades and have changed to keep up with the times. Well, as the Bob Dylan song says, the times, they are a changing. The global COVID-19 pandemic has impacted the auction business, and now, Manheim is changing again too. The rest of the automotive auction industry is watching.

Dealers walking the Manheim Auction in California
Hundreds of car dealers looking at cars as they are moved to auction lines at Manheim So. Cal. Auto Auction in Fontana. | Photo by Irfan Khan/Los Angeles Times via Getty Images

Who is Manheim?

Manheim is an automotive auction powerhouse. It was established in 1945 and has grown to the point where it now sells over seven million vehicles annually. According to their website, in 2019, they made over $3.5 billion in revenue. They are also now part of the Cox Automotive Group.

Why is Manheim important

Manheim is so large that 80,000 dealerships have used Manheim auctions to purchase or sell their vehicles. This means that more than likely, you and I have purchased a used vehicle that has gone through a Manheim auction at some point in the past. So, when an auction house that large and with an influence that far-reaching announces a possible change to their business, the auto industry takes notice. 

What Manheim is planning

In an article posted by Wards Auto, Sandy Schwartz, President and CEO of Cox Automotive, was asked about the re-opening of auction houses after the COVID-19 lockdown. It was a valid question considering many regional restrictions are slowly being lifted. Schwartz’s answer raised some eyebrows. 

“Asked if the day will come soon when Manheim re-opens its nationwide chain of physical auto auction houses, Sandy Schwartz, head of Cox Automotive, Manheim’s owner, replied: “I hope not.”

A red Corvette surrounded by dealers at a Manheim auction in California
Many dealers view a red Corvette as it is moved through the auction block at Manheim So. Cal. Auto Auction in Fontana | Photo by Irfan Khan/Los Angeles Times via Getty Images

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After a little digging, Wards Auto discovered that Cox had begun an initiative ten years ago to shift buying to online-only platforms. By 2019, half of the Manheim auction sales were made online. Then the Coronavirus forced auction houses to shut down because they were considered non-essential businesses. So, the shift to 100% digital was forced. Manheim was mostly prepared. They still had to furlough 8,500 workers.

Why online-only sales

The way Manheim sees it, online-only sales are quicker and safer. Though buy-in from many older dealerships may be a slow process, it will be necessary to maintain in business. Manheim auctions move too many cars for dealerships to ignore. They also recondition many of the vehicles, a service many dealerships take advantage of prior to selling their cars at the auction, or even after purchasing from Manheim. So, that aspect of the business still needs and will continue to need workers. 

A computer screen shows a Lamborghini at an online auction website
A computer screen shows a Lamborghini available on an online shopping auction site | Photo by Simon Song / South China Morning Post via Getty Images

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This could all change tomorrow

Mr. Schwartz, however, concedes that he has never been unsure of the future. He was certainly referring to the COVID-19 pandemic that came out of nowhere and the resultant global. He makes a good point. What anybody is sure of right now, can change in an instant on a global level.

When the head of Cox Automotive speaks, people listen. Well, he’s speaking. Mr. Schwartz prefers that Manheim’s auction business shift to no longer needing all the old physical auction houses. Instead, a goal of 100% online sales is the target. Also, the COVID-19 lockdown has proven that online-sales-only is a valid business model for Manheim. So, dealers should take notice.