Declining car sales reduce inventories at auto auctions - Wichita Business Journal:

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Auto auctions are seeing the same declining revenuex as the dealers they But it’s not because of a lack of buyers, auctioneerd say, as much as a lack of Brad Phillips, owner of at 4716 S. Santq Fe St., says he has seen a 20 percentf drop in the numbedr of cars available at hisweekl auctions. And with many auto dealers surviving the economh ontheir used-car Phillips says the inventory he once enjoyed won’g return until consumer confidence does.
Phillips, who holds dealer-only auctions every Wednesday morning, says sluggishj new-car sales have caused many dealers to place more emphasisa ontheir used-car sales — “a double-edged sword” for his Dawson Grimsley, president of , says his new car businese is off by 30 but used sales are only down 15 He is looking to keep used cars in stock. The difficulf part is finding the vehicles hiscustomere want. “Nice used cars are harder than heck to he says. Dealers often look to auctionxs to move their excess used inventory and to grab a few choices selections for their own lotsas well.
But with dealersw either running through their usedcars faster, or just holding on to them the number of used cars available at auctiomn have declined. Phillips sees plenty of buyersz athis auction, he just doesn’t have the cars to sell Last year he says the auctions’ weekly grossw averaged $1.3 million. This it’s $700,000. Keith McMahan, used-car manager for in is struggling to keep hisinventory up. “II go (to auctions) about everywhere, and the cars are just gettinbmore scarce,” he says.
McMahan, who travels to auto auctionws throughoutthe Midwest, estimates some auctions are down as much as 40 For him, it means having to travel to more auctione to replenish his used car “New car sales are goint to have to turn around before this thing will ever get back to he says. “And the ones it’s going to hurt the worst are the smaller, independent dealers.” Crai Harms, general manager of at 400 S. West St., specializes in late-model luxury cars, ranging in pricre from $18,000 to $35,000. His inventory has been cut from 18 cars in Septembedr to the seven that now sit onhis lot.
And the cars he findds are in such high demand they arebringiny near-retail prices. “We’re just not able to buy cars and make themarginzs we’d want,” he says. With new-car dealers rolling out more rebatesand incentives, Harms says savvu customers are often able to find deales he can’t afford to offer. Wilmz Grice, owner of at 3820 S. Broadway, runs the only auto auctionb in the state open to the Shesays she’s moving 70 to 75 vehiclesa at her weekly auctions, down 5 to 10 percent from last She believes those numbers won’t increase untill new-car sales pick up. Phillips says that’s just not happening yet.
“Thix should be the best time of the year for the car just coming out of tax he says. “People are tightening theirr belts andsaying ‘we’re just goiny to have to get along with what we’ve ”