Acquiring America’s Auto Auction — and merging that business’ 23 auction sites with XLerate Group — just makes good business sense, according to Cam Hitchcock, chief executive officer of America’s Group.

The newly consolidated company, which has rebadged its 16 XLerate auction sites with the America’s Auto Auction name, has a broader footprint and an experienced team of corporate executives and auction managers who know the industry inside and out, Hitchcock said.

The consolidated company’s breadth and depth allows it to pursue some accounts that neither a legacy America’s Auto Auction nor a legacy XLerate Group could have pursued on their own.

“When we looked at America’s and we looked at XLerate, there weren’t a lot of overlapping markets,” Hitchcock said. “By putting them together we got a lot of contiguous markets and great relationships historically.

“Dealer groups are consolidating and we felt that having a larger footprint and a well-capitalized organization with more resources on the sales and service side correlates to what’s happening on the dealer side of the business. It also allows us to serve our commercial clients on a broader geographic basis than we could before,” he said.

America’s Group includes its auctions, its technology subsidiary, Liquid Motors, and its dealer floor plan companies, XL Funding and Auction Credit Enterprises. The floor plan companies will be rebadged in the near future, Hitchcock said.

'Super-regional' coverage

He describes the company’s newly broadened reach as “super-regional.’’

It covers the eastern two-thirds of the U.S. with auction sites in Florida, Georgia, South Carolina, Virginia, and Massachusetts. Sites in Michigan, Ohio, Illinois, and Wisconsin, make up AAA’s Great Lakes footprint and Pennsylvania is home to “multiple sites,” Hitchcock said.

The company also has locations in Kansas City, Mo., West Texas, and “we have two auctions in southern California,” Hitchcock said. “Our presence on the Pacific Coast and the mountain areas — we’d like to expand that at some point.”

AAA’s 39 fixed auctions sites and six mobile sites in 19 states makes it the industry’s third largest auction company behind Manheim and ADESA.

It’s size also puts it in a segment of its own as typical auction companies go: It’s much larger than other independently owned auction companies, and yet smaller than the corporately structured Manheim and ADESA.

Hitchcock believes AAA’s business model can give employees and customers the best of both worlds.

Carving a niche of its own, AAA’s goal is that its auctions retain their autonomy, independent spirit and hands-on customer service they’re known for, by giving its general managers operational flexibility and discretion to serve their local and regional customers, Hitchcock said. That’s “while backing it up with enough infrastructure to make sure it all operates efficiently and properly,” he added.

Career opportunities

At the same time, AAA is nurturing a corporate structure that offers it employees career opportunities throughout the company.

“So, if you’re working in an auction in Florida and you’ve got an interest in Texas, or vice versa, or you want to go somewhere else, there are opportunities in the combined organization,” he said. “We have approximately 2,800 employees. We have multiple locations and we’re not done building the footprint.”

But for the last six months Hitchcock and his team have been “heads down” integrating the companies in terms of operations, sales and administration.

For example, a lot of people on Hitchcock’s senior manager team have been in the industry for numerous years and previously worked at ADESA, Manheim, independent auctions, financial institutions and various other organizations.

One promotion leads to another

Consider Laura Taylor, for example.

Taylor, who worked at Charleston Auto Auction in Moncks Corner, S.C., for 18 years  and was its general manager since 2009, was promoted to regional senior vice president of the consolidated company this year.

She is one of three AAA regional senior vice presidents, and has 13 auctions in the company’s southeastern territory reporting to her.

Charleston Auto Auction was part of XLerate Group prior to the acquisition. Taylor knew most of general managers who now report to her and the general managers know one another making the consolidation process easier, she said.

Drawing on the wealth of experience and expertise of some employees, such as general managers, AAA is utilizing that talent by having those employees to take on additional responsibilities, Taylor said.

For example, Charleston Auto Auction, now rebadged America’s Charleston, where Taylor worked, and America’s Savannah, in Savannah, Ga., are being managed by a single general manager, Bill McCready.

“Bill took over at Charleston when I left; he used to be the assistant general manager and marketing manager,” Taylor said. “It was like him coming home and it created growth opportunity for team members to step up into roles of leadership.

“I can’t wait to see what we’ll roll out next year.”

Favors a hybrid sales model

Hitchcock said while some folks in the auction industry are touting an all-digital sales model, AAA firmly believes in a hybrid sales model.

“We sell probably 65% to in-lane buyers; 20 to 25% on simulcast and 10 to 15%  digitally,”  he said.

He also said the tight supplies of vehicles makes sales predictions difficult, but his company expects to run over 1 million vehicles through its lanes this year and sell approximately 700,000 vehicles for its customers, depending on market conditions.