DealerTrack Vs. Manheim Auto Auctions?

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Now as some of you may recall, back in July, on-demand auto industry software provider, DealerTrack  picked up the online shipping network that includes CentralDispatch, jTracker and MoveCars for a cool $74 million. A move that was clearly aimed at offering franchise and independent auto dealers already using DealerTrack’s inventory management and merchandising tools an easy access transportation solution. And for the most part, the acquisition did and does feel like a natural fit.

With a company like 1st Auto Transport under their wing, DealerTrack’s in a position to create a user-exclusive auto transport booking system that could potentially become a price comparison service that does for car shippers PriceGrabber does for online retailers. Say you’re a car dealer subscribed to their network and you’re based in Palatine, IL and you’ve literally just sold a Chevy Blazer via eBay to a customer in Munson, IA. You could solicit bids for shipping that SUV to that aforementioned hypothetical customer while the transaction’s still at your fingertips … And in so doing save your dealership time and money.

“DealerTrack enables the key elements of a dealer’s workflow with our award-winning DMS, credit application network, and inventory management tools, among other offerings,” said Mark O’Neil, chairman and chief executive officer at DealerTrack “We believe Central Dispatch complements DealerTrack’s turn-key inventory management services, including analytics, pricing, merchandising, group trade and now transportation.”

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Another Interesting Development

Of course, even in the age of the eBay car buyer, the need to ship vehicles to distant customers accounts for a somewhat smaller percentage of your average automotive retailers interactions with auto transporters; than the need to have numerous vehicles purchased at auction shipped backed to their lots. And that’s why it felt particularly significant when news broke late Friday that the auto auctions specialists over at Manheim had outright purchased their longtime partner Ready Auto Transport.

The buy was billed as a move to “create an unrivaled, end-to-end solution for customers vehicle inventory needs” by “strategically expanding” Manheim’s popular used car marketplace into the vehicle transportation arena.  Allowing their customers to buy and transport newly acquired inventory in one place.

Janet Barnard, Manheim executive vice president and chief operating officer, said: “Combining Ready Auto Transport’s full and self-managed transport options with Manheim’s extensive used-car marketplace creates an unrivaled, end-to-end solution for customers to manage their vehicle inventory needs.”

In other words, say you’re that same Palatine-based dealership and rather than hauling yourself down to a car auction in Pine Bluff, AR you’ve opted to bid for and buy new stock online through Manheim.  Now that Manheim and Ready Auto are one and the same, the first thing you’ll likely see once your auction concludes, is an in-system “schedule transport” option.

As of this writing those scenarios are only hypothetical. That said, both have the virtue of being the most logical aim of a synergy-building acquisition. And that means that two uncharacteristically large players may be about to throw down (as it were) over their system-integrated mutually exclusive auto transportation booking solutions.

Given the larger numbers involved in Manhein’s side of our hypothetical dealer’s vehicle moving needs, it’s difficult to see how their system won’t have an advantage. Which is not to say that their in-auction transport solution is in any way likely to offer dealers lower shipping rates, after all, Ready Auto will have exclusive access to an effectively closed marketplace, but it will certainly offer them a kind of one-click convenience.

The competing bids based system the DealerTrack + Central Dispatch partnership seems likely to produce, will almost certainly result in a lower shipping rate for your average car dealer, but accessing that rate will require stepping outside of Manheim’s auction interface and into DealerTrack’s vehicle inventory tools. How often has greater value won a fight against greater convenience?

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