Specialty Auto Auctions: Key Players
Auto auctions are notoriously volatile and highly sensitive to a variety of market conditions, however, we find that the specialty auction space is consistently dominated by several companies that have integrated auctions into their online platforms. Our research below examines six of the top specialty auction providers by annual revenue (while accounting for National Powersports Auctions), ordered highest to lowest.
- Manheim is the biggest player in this space by far. They deal primarily in land vehicles (i.e. industrial trucks, cars), and their annual revenue is in excess of $2.6 billion.
- ADESA sells a wide variety of specialty/industrial vehicles, but their stronger focus on low-mileage, single owner cars means that they don’t cater to the specialty industry quite as directly as their competitors. Their annual revenue is roughly $2.1 billion.
- Copart holds the next most significant share of this market, with their revenue sitting around $2.04 billion. However, they have arguably the widest variety of all six providers mentioned in this report, as they sell everything from boats, to jet skis, to RVs and forklifts.
4. Insurance Auto Auctions
- Insurance Auto Auctions (IAA) is slightly different from its competitors, as it focuses more on the auctioning of “total loss, damaged and low-value vehicles.” But this focus still gains them modest revenue, which sits around $1.3 billion annually.
- Specialty auction players see a sharp drop off in size and revenue after the aforementioned four; RideSafely, another competitor in this space, only has an estimated $266.8 million in annual revenue.
6. National Powersports Auctions
- National Powersports Auctions (NPA) has long provided a catalog that favors large (RV), sporty (motorcycles), and/or powerful vehicles over more standard choices. However, the only publicly available estimate of their revenue sits at $23.1 million, the accuracy of which seems dubious, to say the least. The sparsity of this information in the public domain likely stems from the fact that Copart acquired NPA back in 2017.
Specialty Auto Auction Market Overview
This report provides an overview of the specialty auto auction market in the U.S. While public data or relevant industry reports into this segment were not readily available, two insights related to the field of specialty auto auctions could be made. Motorcycle auctions appear to be doing especially well based on the percentage of lots sold and the recent sale of the most expensive motorcycle at an auction. Big truck auctions also appear to be rising, although this is based on limited data. Big truck auctions are shifting to the online marketplace.
Motorcycles, Especially Japanese, Are in Demand
Motorcycles have enjoyed high price tags in recent years at auctions in Las Vegas and demand appears to be increasing.
- At the motorcycle auctions in Las Vegas held earlier this year prior to the COVID-19 outbreak, 85 percent of the 1,821 bikes were purchased and a total of $22.5 million was exchanged, signifying a generally high movement of product overall.
- Of the bikes sold at the 2020 auction, Japanese bikes sold the best. They made up 35 percent of the lots, while Honda alone made up for 25 percent of the total lots.
- Honda bikes sold particularly well during the 2020 auctions, with 95 percent reaching minimum bid for a median price of $4,000.
- The Japanese bikes sold for a median value of 23 percent more than the Hagerty Price Guide at the 2020 auctions. British bikes, on the other hand, sold for 2 percent more than the Hagerty Price Guide.
- The highest price tag for a motorcycle at an auction was achieved by Bonhams in Las Vegas in 2018. The bike sold was a Black Lightning; it sold for $929,000.
- The Bonham’s 2018 auction saw a total of $2.86 million in sales with 75 percent of all motorcycles sold.
- Based on the small sample increase from 75 percent of bikes purchased at a 2018 Bonham’s auction to 85 percent of bikes purchased, overall demand is increasing.
Big Trucks are in Demand, Particularly Online
- Even before the major outbreak of COVID-19, truck auctions were shifting to an online market.
- At an auction held in Orlando, Florida by Ritchie Bros., $237 million in sales of trucks and heavy equipment items were sold. 53 percent of those sales were online.
- The number of truck and heavy equipment item purchases made through Ritchie Bros. app doubled from 2019.
- 66 percent of winning bids at the Ritchie Bros. auction were placed online.
- Ritchie Bros. is an international auction business that sells trucks and heavy equipment items. It has been steadily increasing in its revenues. In 2018, its total revenues increased from $971.2 million in 2017 to $1.17 billion, an increase of 20 percent. Based on this limited window, the market for truck auctions is increasing.
Insights into auctions in different segments of the specialty auto auction industry could not be determined due to a lack of public data. For boating, industry insights related focused on the overall market increase of 11 percent between 2019-2025 (but did not include auction sales), which can be interpreted as an indirect indicator of increasing auction sales over the same time period.
Reports related to RV auction sales do not appear to be publicly available. Industry reports show the market is experiencing growth of about 7 percent from 2019-2024 and an indirect increase of auction sales can be anticipated.
For motorcycles and trucks, insights into the individual specialties were provided above using the limited public information available.
Specialty Auto Auction Market Size
Based on the calculations using the available data, the size of the specialty auto auction market in the United States would be approximately $6.44 billion. As explained below, this is the closest estimate that could be calculated. Below is an overview of the findings, as well as an explanation of the research methodology.
- ADESA is the auction business unit for KAR Auction Services, and it accounted for about 87% of its total 2019 annual revenue. ADESA’s revenue from auction services was about $2.1335 billion, and the United States accounts for about 81.5% of its business. Therefore, ADESA’s auction revenue in the United States = 81.5% X $2,133,500,000 = $1,738,995,380.85.
- ADESA accounts for about 27% of the overall auto auction market in the United States. Due to lack of statistics for the specialty auto auction market, the research team operated under the assumption that ADESA would hold the same position in the specialty market.
- Therefore, the size of the specialty auto auction market in the United States would be approximately $1,738,995,380.85/27 X 100 = $6,440,723,632.80 = $6.44 billion.
- Notably, this is a rough estimate since it was not possible to determine ADESA’s exact revenue from the auction of specialty autos. It is also possible that its market share in the specialty market would be larger considering that it seems to concentrate more on the category, compared to its biggest competitor Manheim whose inventory is much wider with numerous revenue streams.
- According to the National Auto Auction Association (NAAA), about $107.6 billion worth of autos were sold in the U.S. auction market in 2018, which was a 1.9% increase for $105.6 billion in 2017.
- While, the total sales increased in 2018, the total number of units sold on auction in 2018 decreased to about 9.932 million from 10.014 million in 2017. The NAAA report shows that the reduction in the number of units sold was offset by a 2.8% increase in the average price per unit.
To provide the size of the U.S. specialty auto auction market, the research team searched extensively through the public domain for market research reports, media reports, and reports from auction and automotive resources. We also searched through statistics sites such as Statista and government databases such as the Bureau of Transportation Statistics. While our results produced statistics for the overall auction market and specialty vehicle market, there was nothing on the specialty auto auction market.
During our research, the research team realized that most resources relied on the data provided by the NAAA. Therefore, we searched through the NAAA reports, but they do not provide any breakdowns by type or category. Thirdly, the research team expanded the scope of our research to global data in the hope that we would also be able to find the U.S. market share. Unfortunately, there was only some reports on the global market size for commercial specialty vehicles.
As a last resort, the research team tried to find ways to triangulate the desired information. Since we had found the total number and average price of units sold by auction, we searched for the number or share of specialty autos sold to calculate the market size by sales value or volume. Our efforts entailed searching for the total figures as well as the figures by category, including motorcycles, RVs, and boats, among others. Again, our efforts were fruitless.
Having identified the key players in the U.S. specialty auto auction market as Manheim, ADESA, Copart, IAA, RideSafely, and National Powersports Auction, we elected to find their market shares in order to calculate the overall market size. However, we could only find the market shares for Manheim and KAR Auction Services (ADESA’s parent) in the overall auto auction market, which we used in our calculations with the assumption that they would hold the same position in the specialty market. We decided to use ADESA’s figures in our calculations because we felt that they would provide a closer estimate than Manheim’s. This is because ADESA’s inventory is primarily specialty auto, while Manheim has a much wider inventory with numerous revenue streams. The calculation is outlined above.
Specialty Auto Auction Market Trends
Two trends that are affecting the specialty auto auction market are auctions moving to multi-channel digital platforms and customers buying RVs at a record pace. The data provided below includes companies that operate in larger auto auction spaces but are major players in the special auction space based on mentions in reputable industry publications and annual reports.
Trend 1: Auctions are moving to multi-channel digital platforms
- In recent years, companies with dedicated specialty segments such as Manheim, IAA, ADESA, etc. have released multi-channel digital platforms where they hold most or all of their specialty auctions.
- COVID-19 has forced many companies to alter their operations. Some companies were more prepared for this change than others, such as Manheim and ADESA. Online-only auctions are increasing, as can be seen with the major auctioneers like Manheim, ADESA, Ritchie Bros., etc.
- Simulcasting seems to be a growing way for large companies to conduct auctions. Simulcasting allows companies to stream auctions from remote sellers remotely while buyers can participate through multiple channels, including mobile apps, websites, etc.
- Last year, ADESA, one of the country’s largest specialty auction companies, released its ADESA Simulcast platform which replaces its LiveBlock platform. This change gave customers more functionality and intuitive features during their auctions.
- Manheim also introduced their all-digital auction experience last year when sellers were able to bid online through Manheim Simulcast. Their launch was a success, as they had a 76% sales conversion with 300 online and in-lane bidders. Manheim Simulcast wasn’t a brand new product, but last year’s launch was the first time it was used for an all-digital auction.
- IAA is another large brand that holds their auctions completely online even though all their branch locations are currently open. IAA also released their platform last year.
- Online-only auctions have enabled auctioneers to enact measures to lure customers, such as waiving buyer fees.
Trend 2: Customers are buying Recreational Vehicles at a record pace
- The sale of Recreational Vehicles (RVs) has increased dramatically due to Americans seeing road trips as a safer alternative to flying during the coronavirus pandemic. This has resulted in record levels of demand.
- When shutdowns were effect in April, demand was poor as auctions, dealerships, and financial institutions were closed due to pandemic. However, May and June saw record sales. Auction volume of motorhomes in May increased by 10% compared to April and the units sold were seven years old on average.
- Towables, another type of recreational vehicle that includes travel trailers, saw a 98% increase in auction volume in May compared to April. Analysts have noticed an increase of newer vehicles as manufacturers ramped up production after weeks of being shut down. But the newer units are not enough to fill the demand gap and are being sold out faster than they are made, causing auctions of older vehicles to increase to fill this demand.
- In June, auctions of towables have been going for $14,840 which is an increase of 23.5% over the year prior. Auctions of Motorhomes saw an average selling price of $51,574 in June, which was a 9.2% increase from that of May.
In order to identify trends in the specialty auction market, we primarily searched through publications and reports that mainly deal with this industry, including Auto Remarketing, Black Book, and Business Insider. We also looked through major players in this industry and found common themes among them.
Specialty Auto Auction Market: COVID Impact
COVID-19 negatively affected specialty auto auctions, especially segments such as Powersports and RVs. However, recent data has shown that people’s indoor exhaustion and their skepticism of flying is pushing them to buy RVs and Powersports vehicles at very high rates while inventory volumes remain low. Data and information from the vehicle auction industry on a whole has been included as well as information from the specialty auto auction industry. While most of the information is from publications dealing with the specialty auto auction industry, articles about industry-wide news included key players in specialty auctions such as Manheim and ADESA.
Impact on the US Specialty Auto Auction Industry
- Currently, the supply of vehicles for auctions have been dramatically low compared to previous years. This has been caused by businesses such as remarketing channels and repo companies that auctioneers depended on being negatively affected by coronavirus shutdowns.
- Specialty auction companies are suffering from volume problems. Auction data from June and July showed a decrease in volume of around 40% compared to the year before.
POWER SPORTS AND SMALLER VEHICLES
- Auctions were forced to move completely online when nationwide shutdowns went into effect in March. Manheim and National Powersports Auctions (NPA) were some of the largest auctioneers to be completely prepared for the shutdowns as they easily switched to online-only auctions. ADESA had to suspend its operations until April 3rd (ADESA began online-only operations for specialty operations on April 6th).
- In March and April, the supply of vehicles for large specialty vehicles like medium and trucks increased and caused a decrease in prices for the entire market. Auctioneers such as Taylor and Martin, Ritchie Brothers, Manheim, and ADESA switched to an online-only model, with JM Wood switching in a couple of months.
- Auctioneers like National Powersports Auctions (NPA) depend on repossessions by lenders and dealers to supply auction volume. Because of widespread lockdowns, their auction volume decreased. NPA’s volume decreased by as much as 30%.
- Even though Powersports suffered, off-road vehicle sales were still doing a lot better than the sale of street units during this time.
- As lockdowns continued to spread and businesses started to suffer, groups in this industry such as the Motorcycle Industry Council (MIC), the American Motorcyclist Association (AMA), and the Outdoor Recreation Roundtable lobbied the government to consider Powersports business as essential services.
- In May, auctions were still running low as inventory that usually came from repossessions, remarketing, etc. were still running low. However, demand was picking up and auction levels rebounded from March and April. They were running at 90% in many locations.
- This is why analysts were not worrying much about the decrease in inventory during this time because they foretold that there would be upticks in repossessions that would refill inventories.
RVs AND LARGER VEHICLES
- RVs and large vehicles like trucks suffered just as much as the Powersports and other segments. Some RV auctioneers expected that they would’ve seen an increase in volume as the weather warmed up, but instead, they saw a year-over-year decrease of 4%.
- Over-the-road and regional tractors sold poorly, which caused prices to decrease sharply in the overall market.
- RV auction prices fell by an average of $688 between March and April. This was strange as traditionally there were price increases in March and April.
- This however started to change in around June. Demand for Recreational Vehicles started to skyrocket as Americans remained skeptical about flying. This drove the prices in the RV market up. June’s prices and activity were better than in May as people were more willing to pay whatever was necessary to get the inventory needed.
Predictions for the Future
- Physical auctions may be a thing of the past as auctions have moved to an online-only model. Auction companies were forced to decide whether to close or go all-digital, and many chose to do the latter. For Manheim, their aim was always to go all-digital and half of their sales came from digital channels by the end of 2019.
- Physical auctions going away permanently may result in layoffs after furlough periods are over. ADESA already had to let some of their employees at auction locations in the northeast go.
- Analysts say that the future is set to be touch-free, online AND in-store, and paperless. The in-store part of “online and in-store” will continue to be limited, where auction companies like Taylor and Martin only allow in-store visitations for inspection.
- Companies are doing better with sales conversion rates during this time because of restrictions requiring appointments and showroom capacity limits. This is more incentive for companies to continue a mostly online strategy.
- The remarketing and auto-financing industry that specialty auctions depend on was hit during the COVID-19 lockdowns. There was a decrease in lending as well as repossessions due to restrictions in many areas. In the future, financing will be much different as people do not have strong credit scores as they used to, the risk of fraud has increased, and payment deferrals have become standard. Financiers will have to embrace data and analytics to do real-time analysis in order to be successful in the future.
- Manufacturer output is increasing, along with an increase in demand for Powersports vehicles and Recreational Vehicles.
- Even though consumer spending has increased, the future is still uncertain as people are no longer receiving $600/week unemployment checks and Congress still hasn’t agreed on further stimulus checks for Americans and small businesses.
- Even though there was stagnant growth in the Powersports segment in July, August saw a historic uptick, especially with ATVs (9%), off-road bikes (7.5%), utility vehicles (7%). There has been a 6% growth per month in auction values since May when COVID-19 shutdowns were widespread. Analysts predict continued good performance as the fall is historically a great season.
- As people tire of being indoors, people’s need for leisure and recreation will continue to drive sales of RVs and Powersports vehicles. Because people are still skeptical of air travel, the RV and Powersports industries are seeing more new customers than ever before.
- Analysts are hoping new customers will drive long-term growth for these industries, especially for Powersports, as it did not recover to the heights it had before the Great Recession of 2008. However, inventory still remains an issue, and analysts predict that this will cause price-softening soon.