KAR Global’s agreement to sell its U.S. ADESA auto auction business to Carvana has potential impacts to parties beyond those involved in the deal.

For example, their respective competitors, who have various business relationships with the aforementioned companies.

So, what happens to those relationships moving forward?

A lot is still to be determined, but here is what some of these competitors are saying thus far, starting with Cox Automotive, KAR’s chief competitor.

A company spokesperson said Cox Automotive is not, nor has ever been, an investor in Carvana itself.

However, its Manheim auto auction unit has worked with the online retailer and the two have been partners, as Auto Remarketing has previously reported.

For example, in late June 2020, Carvana announced that through a partnership with Manheim Digital, it launched an online wholesale platform, CarvanaACCESS, that allows dealers to buy wholesale vehicles directly from the company.

As Auto Remarketing reported in 2018, the relationship between the companies goes back years  — in fact, almost a decade at this point.

There's also an investment and operational lineage between Manheim and the subprime auto finance company and BHPH dealership chain associated with the origins of Carvana. 

So, Thursday’s news that Carvana would be acquiring the U.S. locations of Manheim’s chief rival, ADESA, certainly raises some questions.

Will their partnership continue once ADESA’s auctions are under the Carvana umbrella?  If so, what would that look like?

At this point, answers to those questions and others aren’t yet clear. But the door, it seems, at least remains open.

In a statement provided to Auto Remarketing, a Cox Automotive spokesperson said: “Cox Automotive is the undisputed leader and has serviced the best interests of all our industry constituents for many decades and will continue to loyally do so. We are advancing on our path to create value across retail and wholesale solutions with innovative open access products and remain here to serve the broader automotive industry.”

In Thursday’s earnings call, Carvana chief executive officer Ernie Garcia said: “We do partner with both Manheim and ADESA on third-party reconditioning. I do think that offers some capabilities, but again, I think we'll stay away from giving too precise of guidance there."

Auto Remarketing has reached out to Carvana for additional clarity on its relationship with Manheim going forward — along with other questions — and will share those updates as they are available.

There’s also the Vroom side of the equation.

A competitor to Carvana, Vroom works with ADESA, as well.

During its earnings call on Tuesday, Vroom management said the online retailer would look at the impact of Carvana’s acquisition, how it would affect Vroom’s reconditioning strategy and the potential need to drive greater investment in Vroom’s own reconditioning centers.

At this point, those answers are to-be-determined and Vroom said it will have more to share at its investors day this spring.

“Here’s the way we think about the ADESA deal: One, it got announced a couple days ago, so we want to be really thoughtful about how we characterize the impact of ADESA, what it means to us overall, and of course, we’re thinking deeply about that,” Vroom chief executive officer Paul Hennessy said during the call.

“Roughly between 20 and 24% or so of our capacity currently sits with ADESA. And look it’s our understanding that Carvana, over time, is going to repurpose the ADESA reconditioning predominantly for their own use. And so we’re working with the ADESA team now on what that timeline looks like and what the near-term impacts are.

“We’re confident that there is solutions in our third-party channel with Manheim and others, and we’re confident as we run our own factory that we’ve got an opportunity to expand our own capacity.”