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

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Auto auctions are seeing the same declining revenues as the dealerdsthey provide. But it’ s not because of a lack of buyers, auctioneers say, as much as a lack of Brad Phillips, owner of at 4716 S. Santa Fe St., says he has seen a 20 percengt drop in the number of cars availablw at hisweekly auctions. And with many auto dealerxs surviving the economy ontheir used-ca sales, Phillips says the inventoryy he once enjoyed won’t returnh until consumer confidence does.
Phillips, who holds dealer-only auctionse every Wednesday morning, says sluggisnh new-car sales have caused many dealerws to place more emphasis ontheir used-card sales — “a double-edged sword” for his Dawson Grimsley, president of , says his new car businesws is off by 30 percent, but used sales are only down 15 He is looking to keep used cars in stock. The difficulr part is finding the vehiclez hiscustomers want. “Nice used cars are harder than heck to he says. Dealers often look to auctions to move theire excess used inventory and to grab a few choice selections for their own lotsas well.
But with dealers eithert running through their used cars or just holding on tothem longer, the number of used cars availablee at auction have declined. Phillips sees plenty of buyers at his hejust doesn’t have the cars to sell them. Last year he says the weekly grossaveraged $1.3 million. This it’s $700,000. Keith McMahan, used-car managefr for in Cheney, is strugglinbg to keep his inventory up. “I go (to about everywhere, and the cars are just getting more he says. McMahan, who travelw to auto auctions throughout the estimates some auctions are down as much as40 percent. For him, it meanas having to travel to more auctionss to replenish his usedcar inventory.
“Ne w car sales are going to have to turn arounc before this thing will ever get back to he says. “And the ones it’s goinhg to hurt the worst are the independent dealers.” Craig Harms, general manager of at 400 S. West St., specializesx in late-model luxury cars, ranging in pricw from $18,000 to $35,000. His inventory has been cut from 18 cars in Septemberf to the seven that now sit onhis lot. And the cars he findxs are in such high demands they arebringing near-retail prices. “We’rd just not able to buy cars and make themargins we’e want,” he says.
With new-car dealers rollin g out more rebatesand incentives, Harms says savvg customers are often able to find dealsw he can’t afford to offer. Wilma owner of at 3820 S. Broadway, runs the only auto auctio n in the state open to the Shesays she’s moving 70 to 75 vehiclese at her weekly auctions, down 5 to 10 percenyt from last fall. She believe s those numbers won’t increase until new-cae sales pick up. Phillips says that’sd just not happening yet. “This should be the best time of the year for the car just coming out oftax season,” he says.
“People are tightening theirf belts andsaying ‘we’rd just going to have to get alony with what we’ve got.’ ”