PHOENIX — On the same day it reported and discussed third-quarter earnings, DriveTime explained on its quarterly conference call why its partnership with Manheim to launch a new separate and independent wholesale auction company makes sense.

Go Auto Exchange, a new joint venture announced this week, will focus on independent dealers and the low-end vehicle segment, an area of the business where the companies saw potential.

"It's a segment of the market that we felt, along with Manheim, was underserved in certain ways, focusing more on the less-expensive vehicle and more towards the independent dealer," DriveTime's management said on Thursday's call.

"Together, we felt it was a good fit with Manheim's expertise and the volume of cars we could bring to better serve this space."

The joint venture was revealed one day before DriveTime's quarterly performance was released.

During Q3, the company pulled in $5.08 million in net income attributable to DriveTime consolidated. That's up from $4.40 million in the year-ago period.

The latest quarter includes total revenue of $367.07 million, up from $304.96 million in the third quarter of 2012.

In that sum were $276.83 million in revenue generated via used-vehicle sales (up from $226.87 million), interest income of $84.32 million (up from $77.33 million) and dealer finance/other income of $5.93 million (up from $757,000).

More on Go Auto Exchange

The first locations for Go Auto Exchange will be rolled out this year in Atlanta and Phoenix, with more to come in 2014.       

Serving as president of Go Auto Exchange will be Tim Janego, who most recently served as Manheim Regional Vice President for the East Region.

Janego will work closely with teams from Manheim and DriveTime to have the new locations open by the end of the year.

"Tim's extensive background in the wholesale auction industry made him a perfect fit to lead this exciting new business," said Manheim senior vice president and chief financial officer Joe Luppino.

"Go Auto Exchange will benefit from Tim's deep operational experience in running wholesale auctions and from DriveTime's inventory and deep knowledge of this growing market segment."    

Go Auto Exchange and its locations will operate independently from Manheim and DriveTime locations.  

Headquarters will be in Atlanta, with more locations coming in early 2014.  

"As Manheim's business today focuses on serving many different customers, Go Auto Exchange's focus will be exclusively on the low-end vehicle segment in local markets," said Janego.  "Our highly-targeted approach allows us to concentrate solely on growing this segment, while allowing us to aggressively compete."

Go Auto Exchanges intends on bringing in a "combination of auction pros and industry experts" to lead its locations, and will partner with NextGear Capital to offer vehicle financing options to independent dealers.  

More details will emerge in the weeks ahead, the company said.

"We've been a long-time Manheim customer, and this new arrangement with them is a result of our close collaboration and identifying what our mutual customers need and want to succeed," said DriveTime chairman Ernie Garcia.

"Manheim's success with wholesale auto auctions and our deep knowledge of the low-end vehicle market and independent dealers is a perfect match."