Portland's Cross Point NW auto auction grows in a market ...

Cross Point NW loves auto dealers. The signs that dot its Portland auctionhouse say as much. Its growing business -- launched nearly four years ago as the auto industry faced a new reality -- proves the sentiment true.

The dealers-only auto auction listed its first cars in July 2008, selling just one-quarter of the 80 on the block. A week ago, 702 vehicles rolled through its weekly sale, and buyers snatched up three-quarters of them.

Its growth curve illustrates a local tie-in to the larger market. In 2009, the value of used vehicle sales surpassed new ones for the first time in a decade. Prices for used cars also ticked up slightly as customers paid less for new cars. Auto auctions supplied 51 percent of the used cars sold by dealers in 2010, a market share that's surged fivefold in three decades.

"The new-car stores are changing the way they've done business," operations manager Norm Hardy said. "Without them running it through the auction, they would never know," what the car could bring.

The environment has helped Cross Point NW grow into a destination for Pacific Northwest auto dealers. Auto auctions consistently sell about six of every 10 cars up for grabs. Cross Point NW's mark is ticking higher.

It sources 80 percent of its vehicles through area new-car dealers looking to auction off trade-ins and restock their lots with fresh inventory. Auctions offer a market for dealers that doesn't exist in wholesale transactions. Cross Point charges a set fee based on the purchase price and guarantees both buyers and sellers in advance.

Its Wednesday morning sales, where four cars zoom through every minute, attract more than 380 potential buyers. Some come from as far away as Boise, Spokane and Seattle. The growing demand eventually pushed Cross Point from its first site near Milwaukie to a larger 12-acre home in Southeast Portland.

"We just keep on getting bigger and bigger," said Hardy, whose family launched the business. Brother Brian, now the company's general manager, saw the business model at work during a trip to the East Coast.

From the start, they focused on attracting new-car dealers with a route to a quick turnaround. Employees pick up recent trades from area lots on Mondays and put them to auction on Wednesdays. Workers clean and detail the vehicles before they enter the auction lanes.

"They have to turn that inventory," Norm Hardy said. Cross Point's role, he said, is simple. "We just run it through and bring them more money."

In the West, vehicles on the auction block average $10,450, the highest of any region in the nation, according to the National Auto Auction Association. Local competitors include Brasher's and Manheim, both Portland hubs of auction franchises. A fourth Oregon auto auction operates in Eugene.

A year after its July 2008 launch with 80 vehicles, Cross Point listed three times that amount and hit a 42 percent sell rate. By July 2001, the auctionhouse advertised 434 cars and sold 61 percent of them. Weekly volume topped 700 this month.

Cross Point's tight focus on new-dealer business helped grow operations year-over-year, and later expand to include a service shop and a repossession arm, responsible for the remaining 20 percent of its volume.

At a recent auction, gasoline fumes mixed with the scent of bacon sizzling on the complementary breakfast line for dealers. But most stood near the action, where cars, trucks and SUVs moved through lanes marked A, B, C and D. Auctioneers in every lane rest only long enough until the next car rolls through. Bid spotters call out raised hands from interested buyers. Every car carries a red- or green-light markers that flag problems or not.

It's a choreographed dance of Cadillac Escalades, Volkswagen Beetles and Jeep Cherokees moving in and out of the expansive auction house. More than 80 workers orchestrate the Wednesday morning performance, guided by a man pointing drivers which direction to turn as they exit the auction lanes.

Outside, dealers milled in the parking lot and peeked into windows of cars awaiting sale.

George Sullivan, who owns Milwaukie's G & P Auto Sales along McLoughlin Boulevard, searched for newer cars that produce higher margins. He makes it a point to go to the auction because he can find good cars at a fair price, he said.

--Molly Young

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