LEADING vehicle auction house Manheim has added more than 70 new dealer customers in the first three months of this year as pressure increases to turnover used-car stock.

Significantly, the volume of vehicles sold in the Manheim wholesale marketplace that came from dealers – typically customer trade-ins rather than being sold on a dealer’s lot – have increased 53 per cent year-on-year, to a five-year high. Manheim said that these vehicles were not undesirable units sent to wholesale because they could not be sold easily at retail. 

The company said that this volume growth is being driven in part by a significant increase in the number of franchise and independent dealers using Manheim auctions to sell a percentage of their used vehicles. “This has not occurred by accident but rather stems from a concerted investment into business development, designed to tap into what the company sees as a growing appetite from both buyers and sellers,” Mike Costello, the corporate affairs manager of Manheim parent company Cox Automotive Australia and New Zealand said.

Manheim reports that the jump in dealers using its auctions has been triggered by limited space at dealerships and rising consumer demand.

It has also been fed by floorplan and staff costs, growing new vehicle inventory, and margin pressures which Manheim said makes wholesale auctions a smart channel for vehicle disposal. 

The strong supply of vehicles through dealerships has led to dealers diverting a portion of their trade-ins to Manheim.

Mr Costello said that the quality of the vehicles being diverted are usually of a much higher quality than expected.

On average, dealer cars sell within a week of being offered for sale at Manheim and this is attributed to the high visibility the business has with the buying public.

Mike Costello

“Manheim auctions is not just a great place for dealers to procure top quality used-car stock but is also the ideal place to send wholesale inventory for convenient and quick disposal, which is good for stock turn and cash flow,” Mr Costello said. 

As an example of the quality of vehicles, Manheim this week wholesaled dealer vehicles including a 2023 Ford Ranger WIldtrak, 2021 Mitsubishi Outlander, 2017 Hyundai i30 Active, 2020 Toyota Camry Hybrid, 2020 Kia Seltos, 2023 Hyundai Ioniq 5 EV, 2020 Mazda CX-9, and a 2017 Mercedes-AMG C63 S.

Manheim Australia’s goal is to generate the best return for dealers as quickly as possible to save time and floorplan or storage costs. 

“The advantages of Manheim auctions for dealers include the company’s large network of buyers, both private customers and other retailers, as well as a national reach and the fact it continues to offer in-person auctions with vehicles driven through the lanes at key sites,” Mr Costello said.

“With stock turnover the name of the game, Manheim on average is selling dealer-used wholesale vehicles within a week.”He said that dealers are facing business pressures including floorplan and staff costs, available storage capacity, selling ratios of new to used, and selling margins that have declined since 2022 highs.“These costs of retaining inventory add up, which is another reason why more dealers are sending trade-ins to Manheim,” he said.“Wholesale returns are generally lower than retail returns, but the latter carries with it higher overheads and needs a greater investment of time. 

“For dealers, Manheim handles transport, inspections, listing, marketing and sales, and sends all dealer customers detailed reports on what sold and what didn’t at a given auction – be it a live physical and simulcast auction, or an online BidNow timed auction.” 

In 2024 Manheim sales grew by more than 35 per cent, posting its best result in four years underpinned by a record volume figure from the fleet management sector, strong growth in OEM ex-company car volume, and an uptick in vehicles sent to auction by dealers. For buyers, the company has observed average wholesale selling prices increase this year after declining across 2023 and 2024 from the all-time highs they reached amidst the shortages of 2022.  

Manheim is part of Cox Automotive Australia, which also makes an array of dealer-facing software solutions for customer leads (LeadDriver), stock management (SmartPublisher),  website design (Radius) and service department customer experience (Xtime). 

Manheim is one of Australia’s biggest wholesale auction companies, selling  passenger vehicles, industrial equipment and salvage nationwide on behalf of car companies, dealers, fleet management firms, financiers, insurers, rental companies and others. The company has sites in Melbourne, Brisbane, Sydney, Perth, Adelaide, Hobart and Darwin, and regional centres in Townsville and Newcastle.