AI And Fully Digital Open Marketplaces Are Transforming Traditional Bricks And Mortar Car Auctions


By Jerome Dwight, Cox Automotive Canada

There’s nothing quite like the thrill of a live car auction. Auction day pits wily buyers looking for the sharpest deals against savvy auctioneers trying to get the most money for their sellers. There’s much shouting and hand waving. Deals can happen in mere seconds. Moreover, both buyer and seller drive away happy they got the best deal possible.

While the thrill of the auction is timeless, the auction industry has seen massive changes since becoming popular in the mid-20th century. With Manheim Canada celebrating its 55th anniversary this month, it’s an appropriate time to look at how automotive remarketing has become more complex and competitive compared to its humble beginnings. Today, there are hundreds of car auctions across North America selling vehicles 24/7 online to dealers on both sides of the Canadian and U.S. border. The genesis of our Cox Automotive Manheim auction brand is an excellent example of how far the business has evolved.

At the end of World War II in 1945, car buyers across North America were looking for anything that had four wheels. So, while the first Manheim auction (held in a farm shed in Manheim, Pennsylvania in 1945) only ran three cars (and sold just one to the general public), the post-war demand for cars would accelerate the auction industry dramatically. Here in Canada, the Toronto Auto Auction in Milton, Ontario – the precursor to Manheim Canada – began facilitating the buying and selling of vehicles in 1964. Due to its expanding business, the original Toronto Auto Auction became Manheim Canada in 1983. Today, as the world’s leading provider of vehicle remarketing services, Manheim globally has 18,000 employees in 125 operating locations around the globe, and much of that growth has come through digitization.

While we celebrate the past, the future of car auctions is even more exciting. Many of us in the industry see rapid changes that will significantly benefit both the wily buyer and the savvy seller, and much sooner rather than later.

A massive shift to the digital world is taking place in the wholesale vehicle market that will remove barriers and make the market more efficient. These efficiency improvements are more important than ever in an industry dealing with narrowing profit margins and more pressure to turn inventory over quickly.

Dealing with the geographic challenges of the Canadian market, the convenience of a digital wholesale experience is paramount. Digital-savvy car-buyers and wholesale dealers expect a robust click-to-buy experience, similar to other e-commerce segments, like electronics or groceries. Further, car buyers and dealers agree: the personalization enabled by automation and artificial intelligence (AI) will significantly improve both car buying and ownership.

Digital auctions can provide a seamless experience with the most advanced tech to allow clients to buy and sell 24/7. With tools designed to offer buyers greater transparency, to remove the friction from identifying the right vehicle condition and to provide accurate valuations, the historical challenges of digital arbitration are expected to decline in wholesale transactions.

As wholesale digital marketplaces bring more buyers and sellers together, AI driven vehicle capture inspection tools also bring further confidence to these platforms by removing the burden of manually inspecting and capturing vehicle damages prior to listing a car for sale. Next-generation AI vehicle capture inspection tools with automated vehicle damage detection will eliminate the subjectivity of condition reports and bring greater transparency to the listing process enhancing the customer buying experience online.

Going forward, digital auctions will not be confined to just buying and selling. Auctions will evolve into full-service marketplaces offering thousands of high-quality vehicles for sale encompassing OEM remarketing inventory, fleet, and rental returns along with access to services ranging from warranty protection, transportation, financing, valuations and inspections—all delivered through mobile and web-enabled channels available 24/7 at the click of a button.

And despite this move to digital, the physical auction infrastructure will not go away. In the near future, dealers will continue to use both physical and digital. In the long-term, physical auctions will evolve to become logistics and reconditioning hubs. No matter how digital the industry becomes, dealers will still need to buy or sell vehicles, and the industry needs to be prepared to do that efficiently, effectively, and with high level of trust and confidence.

From farm sheds to cyberspace, the Canadian car auction business has seen much growth, innovation and excitement in its first 55 years. The future will be even more exciting.

Jerome Dwight is vice-president, inventory and financial solutions for Cox Automotive Canada. For more information, email him at