DESPITE AN INDUSTRY MARKED BY TURMOIL, INCOMING NAAA PRESIDENT ANGELICCHIO HAS CLEAR GOALS AND OPTIMISTIC OUTLOOK
SAN FRANCISCO — Even though incoming National Auto Auction Association president Dave Angelicchio spent some time in a public accounting career after graduating college, holding various positions from controller to chief executive officer in Houston, Boston and Washington, D.C., in the end, he decided he couldn’t escape the call of the family business and returned to the auction industry in 1996 as D-A Auto Auction’s general manager.
D-A Auto Auction, located near Pittsburgh, has been in business for 30 years. It recently underwent a name change in 2008 to Pittsburgh Independent Auto Auction.
”It is a family business that was started by my uncle Clo Angelicchio. He began as an independent dealer in Western Pennsylvania and eventually became one of the largest vehicle wholesales and transporters in the area,” Dave explained to Auto Remarketing, just prior to the NAAA convention. ”This led to the development of a large reconditioning center and contracts to recondition ’factory’ vehicles before they were transported to auctions for sale.
”Before long, Clo convinced General Motors and eventually American Motors to conduct auctions at his recon facility. In 1978, Clo purchased an existing auction and has been operating and expanding that location ever since,” he added.
In fact, Clo is a well-known industry veteran who received the NAAA Pioneer Award in 2006.
Getting His Start
Basically, Dave grew up in an auto industry atmosphere.
”My cousin Denny (Angelicchio) and I worked as young boys in the recon shop after school and during the summers,” Dave recalled.
”As a teenager, I worked in the detail shop and as a driver. During my college years, I installed vinyl roofs because I could do that at night and between classes,” he highlighted.
He even kept overalls in his car so he could put in some time in the business whenever the opportunity presented itself.
”Growing up in the auto business afforded us the opportunity to drive; perhaps well before we were responsible enough,” Dave joked. ”Let’s just say that cousin Denny and I were slightly mischievous and did a bit of damage in the process of maturing.”
NAAA Helps to Build His Foundation
In addition to following in Clo’s footsteps, Dave also took his uncle’s lead with NAAA involvement.
”Clo has been actively involved in the association for many years, having served as president of the Eastern Auto Auction Association and on the NAAA Board of Directors. When I returned to the business, he encouraged me to get involved. I was trying to learn as much about the industry as possible and NAAA afforded me that opportunity,” Dave explained.
He describes NAAA as the leader of the remarketing industry, saying it has become a symbol of integrity and standards.
”With the continual increase in online sales, it more important than ever to create and evolve standards that make it easier for our dealer customers to buy vehicles and to enable auctions to improve efficiencies and keep transactional costs down,” he stressed.
Dave went on to discuss how difficult this year has been for the industry as a whole, saying the NAAA and its member auctions are trying to assist dealers through the turmoil.
”This has undoubtedly been the most difficult year in the history for auto dealers. Franchise dealers have had to rely on the sale of used vehicles to offset the huge decrease in the sale of new vehicles. Their businesses were further complicated by tighter credit markets, making it increasingly difficult to maintain floor-plan financing and obtain retail financing for their customers,” he remarked.
”Quality used vehicles are in short supply. Auction volumes are down due to the decrease in the sale of new vehicles and the corresponding decrease in the number of dealer trades. Rental car volumes are also down. The demand for these vehicles and the prices have risen accordingly,” Dave continued.
So how does he believe auctions and NAAA can help?
”The main way we can help is to continue to develop consistent standards and increase efficiency in order to keep costs low, make it easier for our dealer customers to buy, and generally improve their experience in the lanes. It is also more important than ever that we continue to develop and improve our online sales processes. Many dealers have reduced their inventories and are buying for need rather than inventory. They are also using online platforms as a virtual inventory to fill their customers’ needs,” he pointed out.
Technology: A Driving Force
Given Dave’s history in the business, Auto Remarketing asked how the industry has evolved over the years. His response was one word – technology.
Dealers are clearly using technology today as the backbone of their businesses, with auctions leading the way down this path.
”Technology has changed everything that we do from communication with our customers to vehicle check-in to condition reports to inventory management to the sales processes,” Dave noted. ”Thirteen years ago, we had one PC in our entire office. We processed sales manually and used switches on the auction blocks to light colored bulbs that indicated the vehicle’s condition. Vehicles were entered into and relieved from inventory manually and, of course, all vehicles were sold in the lane.
”Today, we have at least one computer on every desk, work station and auction block,” he said. ”We also keep several new ones in boxes for use when one goes down. That is how much we rely on them. Pick-up notices, title status, condition reports, repair authorizations and floor prices are all communicated online. Vehicles are checked in and entered into inventory electronically. Condition reports with digital images are attached to vehicle run lists online. Vehicles offered for sale in lanes are also available for bid online through simulcast. In addition, we can offer vehicles every day in the online environment.”
On another note, to also change with the times, Dave said that D-A Auto Auction staff talked about a name change for a long time. The team finally decided to put this into action in 2008 by renaming the facility Pittsburgh Independent Auto Auction.
”The change was implemented in 2008 primarily to assist with the expansion of our business with national accounts. Although we will probably always be known as D-A to our local customers, prospective national accounts needed to ask where we were and what our auction affiliation was. I believe that our new name accurately describes who and where we are and makes it easier to market on a national level,” Dave explained.
Goals as President
One of the items on Dave’s 2009-10 agenda will be the standardization of e-condition reports, which the association has already made much progress on.
”We are well on our way toward implementing standardized condition reports,” the incoming president highlighted. ”This standard is extremely important because it will create efficiency and more reliability at the auction level, making it easier for consigners to set more accurate vehicles’ floor prices.
”It will also enable buyers to buy vehicles online with more confidence and, ultimately, improve vehicles residuals,” he continued.
Dave said revamped arbitration rules are also on his slate.
”We are also very close to completing a rewrite of the NAAA Arbitration rules that will include rules for buying online. I am very confident that these standards will be implemented by all of the major auctions and auction groups. These standards will result in buyers being able to buy with more confidence at any NAAA auction, whether buying in the lanes or online,” he said.
”I also believe that we need to work toward the development of an NAAA industry-wide platform that will facilitate our customers’ transactions and improve their online buying experience,” he added.
An Industry Changed by Economic Turmoil
Further reflecting on the turmoil of the past year, without any qualms, Dave said the industry has been ”changed forever.”
”Manufacturers must produce vehicles in quantities that meet consumer demand for retail purchase without relying on large incentives to move excess production. Along with the smaller dealer base, this should enable both the manufacturers and the retail dealers to increase margins and profitability,” Dave told Auto Remarketing.
He went on to say that, ”Rental car companies have been converted to all risk and are being forced to keep vehicles in their fleets longer. They are evolving their business models to reflect the change in the availability price and depreciation of the vehicles that they purchase.”
As for the leasing business, he predicts, this will come back as sales stabilize and lenders regain confidence in predicting residual values. There are already signs of this with GMAC and US Bank supporting a lease program. Also, as of press time, rumors were circling that Chrysler would also make a limited return to leasing.
”The future source of vehicles will be from these dealer trades, rental units, off-lease vehicles and repossessions. I expect consumer confidence to rise but it will be many years before we get back to sales levels that we saw prior to 2008,” he said frankly. ”The auction industry will continue to be very vibrant and the future is very bright for the independent dealers and franchise dealers that survived this recessionary economy and the bankruptcies of Chrysler and GM.”
