Turners Auctions moves online to counter Trade Me

By NZPA

Thursday 19th January 2006

Turners Auctions plans to hold live auctions online as internet sites such as Trade Me continue to make inroads into the car sales market.

Called "Turners Live", the service will be launched to trade customers within five weeks and rolled out across Turners' 16 nationwide public auction sites during the next three months.

It won't replace live auctions, but supplement them with web-based, real-time video and audio. People will be able to place bids from computers in competition with live bidders.

Chief executive Graham Roberts said the country was well covered by physical sites, Turners needed to find an alternative route to expand.

"It will increase attendances, and bums on seats is what we need and that's what sells [cars]," he said.

Turners started looking at an online bidding option 18 months ago. Roberts denies the move is a reaction to competition from Trade Me.

In two years, the number of vehicles listed on Trade Me has grown from 5000 to more than 35,000.

Trade Me has undercut the price of traditional car auction prices by introducing cut-price, dealer-only actions.

In October, Trade Me announced the site would charge dealers $99 a car to list auctioned cars, undercutting the $350 charged by auction houses.

Trade Me claims to sell over 300 cars a day.

Roberts told NZPA late last year Trade Me had inflated figures of car sales, questioning whether it sold the cars or only facilitated dealers' sales.

"Trade Me's business model is very clever - they get paid for listing a car whether they sell it or not," he said. "At Turners we only get paid if we sell cars."

He was concerned Trade Me took credit for sales when a dealer had registered the car with them, but sold it elsewhere. Customers on the Turners site will only be charged on the sale.

He was also concerned checking and inspection services would not be provided in the Trade Me service, posing a risk to consumers. However, Trade Me's Sam Morgan said the 300 cars a day was a conservative estimate.

He said the vast majority of vehicles on Trade Me were classified listings and auction sales accounted for around 100 vehicles a day.

Car dealers accounted for two-thirds of site listings on Trade Me.

Last year, about 155,000 trade and public bidders bought more than 80,000 cars through Turners.

Turners Live bidders will be able to access vehicle information, watch real-time video of the car and auctioneer, listen as the auction takes place and use a mouse to click on a large bid button if they wish to join the fray. Live and internet bids will be displayed on a big screen at the auction.

Turners shares have slumped from a high of $4.55 in February to $2.15 as investors have become increasingly concerned about the threat posed by Trade Me.

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