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The Stock Exchange of Automobiles
BSC AMERICA

December 2014
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A Family Affair: BSC America’s Michelle Nichols, Vice President, Raymond C. Nichols, CEO, and R. Charles Nichols, President.

On any given Thursday, the grounds of BSC America – better known as the Bel Air Auto Auction – swarm with automobile dealers buying and selling used cars. Bel Air Road becomes the Wall Street of automobiles, as the opening bell signals that bidding can begin at this vehicle stock exchange.

“We are a true intermediary,” says Charles Nichols, president of BSC America and second-generation of the family-owned and operated business. “We have developed trust and confidence. Trust has to be felt between the buyer and seller, and we become the exchange for these two,” he explains.

A privately held company, BSC America hosts the largest independent auto auction in Maryland. The National Auto Auction Association, of which BSC America is a member, estimates that over 16 million vehicles are offered for sale through auto auctions annually, resulting in a value of $70 billion. The last year marked a turning point for the industry, because it is the second consecutive year of growth in unit volume since 2007.

BSC America considers itself a total vehicle remarketing resource in an industry that experiences more than 40 million used vehicle transactions annually. It offers a range of solutions for client vehicle transactions through its financial services, auction and automotive services groups. These solutions are designed to manage every stage of a vehicle’s recovery and disposition.

The primary business of BSC America is the auto auction. Each Thursday, the company welcomes as many as 1,000 dealers from all over the United States and foreign countries to buy and sell an estimated 1,800 vehicles. About 70 percent of these dealers are live “in-lane” at the auction and the other 30 percent are simulcast bidders. Other days during the week focus on U.S. General Services Administration, specific sellers such as Ally & General Motors, and various fleet companies. BSC America’s team of trained employees handles the monetary transactions, arranges any detailing and paperwork, and schedules vehicle delivery. Nichols says a high percentage of dealers return on a weekly basis, so the company has set up a system for travel and hotels.

“We make the travel and lodging arrangements for these people, and they stay in hotels from Harford County to Baltimore,” Nichols says. “We are the concierge for these dealers, recommending restaurants and shopping, and making sure they have a pleasant stay.”

The Bel Air Auto Auction has been active in Harford County for 67 years and was one of the country’s original auto auctions, which sprouted as entrepreneurial opportunities to help people during the Great Depression. The local auction began as a one-lane sale on a former livestock auction facility, then moved to its current location at 802 Bel Air Road in the early 1960s. Raymond Nichols and his wife, Elaine, bought the auto auction in 1980 as a small business in which they saw great growth potential. They expanded first to three lanes, then gradually to today’s six-lane facility. The business is now owned by Raymond and his children, Charles and Michelle, after the passing of Elaine in 2000. Today, BSC America includes eight facilities throughout Harford County and an auction in Tallahassee, Fla.

The headquarters on Bel Air Road hosts the larger sales, with the Clayton Station facility near Edgewood offering specialty sales for repossessions, damaged rental cars, donation cars and trucks, and dealer consignments. The public can also participate in the repossession sales. In addition, BSC America caters to niche markets with sales for such segments as power sports, all-terrain vehicles, heavy trucks and equipment, and vehicles for financial institutions, including repossessions and corporate fleets. BSC America’s other sites include body shops, marshalling services, mechanic shops, inspection stations and tag and title services. Their goal: make it easy for the customer from purchase to delivery.

“We are selling customer service,” says Michelle Nichols-Neff, vice president. “It’s all about the experience.”

Dealers arriving at auction on any given day have already had a chance to review the available vehicles through an online listing that shows make, model, year, color and mileage. Once on premises, the buyers can examine the cars on the lot, then go to the appropriate auction lane for bidding. Online bidders are also part of the process. Vehicles are driven through the auction lanes, auctioneers start the bidding and bids are shown on flat screen displays around the lane. In as little as 90 seconds, the vehicle is sold to the highest bidder, and the next one up for auction is pulled into the lane. Winning bidders execute their transactions and make transportation arrangements with the cashiers. The company estimates that the bulk of its vehicles are shipped to destinations on the East Coast, and 8-10 percent of its sales are exported worldwide.

Charles Nichols notes that transportation is one of the company’s biggest challenges. “We get graded on our transportation,” he says. “Cars must be picked up in 48 hours. We are graded on the condition of the cars upon arrival.” Ray Nichols adds that weather is a major factor. “Ice and snow removal is a problem for moving cars and for safety in the lots,” he says.

Thanks to Internet technology and applications that allow buyers to use their smartphones to see vehicle features, more cars can be moved quickly through the auction sale. Ray Nichols says while technology has been another of the company’s challenges, it has also been its biggest reward. “We needed to move fast enough to serve the customers’ needs, but not too fast,” he says. “We serve a wide variety of people, from the small mom and pop dealers to the giant ones, and we need them all to feel comfortable with the technology.”

BSC America employs 600 people whose responsibilities are to execute the details of the thousands of weekly transactions, with special attention to client service. Purchasers, drivers, auctioneers, verifiers and cashiers make the auctions run smoothly. Add to that mechanics, inspectors and transportation specialists, as well as travel reservationists and customer service representatives, and it’s obvious the company has perfected the entire process. BSC America also employs temporary workers, including some from the Harford County Detention Center, retirees and interns. Full-time employees have the opportunity to grow with the company, reaping the benefits of training, schooling and National Auto Auction Association scholarships.

The Nichols family prides itself on its carefully developed employee relationships. “We try to keep a family feeling to the business, while growing and competing in a world where you have to create new business. It’s exciting to see the key managers grow,” Charles says. The family feeling is evident in the seasonal decorations and festive atmosphere of auction day, the smiling faces of everyone from the drivers to the visiting dealers and in the back-slapping greetings to CEO Ray Nichols as he tours the premises.

Ray explains that he bought the company as a small business with growth opportunities, and it has delivered. Second generation has now given way to third generation. His grandson, Charles’s son, is currently a senior at Washington College writing his thesis on auto auctions, with a plan to join the family business upon graduation. Grandfatherly advice to the next generation: “Focus on what the industry needs. Don’t lose your core values.” Charles adds, “Be open, honest and direct.”

BSC America will be consolidating its facilities at a new 175-acre location in Riverside in the coming year. The Nichols family acknowledges the logistics of the move will take an estimated 15-18 months, but the family is excited about the potential. The new facility will feature 75,000 square feet of auction building, 35,000 square feet of parking and a reconditioning area.

“We specifically looked for a place in Harford County because we think it’s a great place to do business,” Ray says. “We have always had a great working relationship with the county.”

In addition to the economic impact of BSC America, the company has also made its mark on the county through its philanthropic donations and community outreach programs. BSC America supports the Senator Bob Hooper Hospice House and Upper Chesapeake Medical Center, where they have donated care-giving rooms. “We’ve had employees come to work and say they or a loved one have stayed in the Elaine Nichols room when they were in the hospital, or that they felt so at home during a difficult time with a loved one at the hospice center, and that makes us happy,” says Charles. The company also supports the Harford Food Bank and Harford Community College, and the owners are all active in their home communities in Anne Arundel, Talbot and Worcester counties.

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Exhilarating Atmosphere: Crowds of eager men walk together from the expansive parking lot toward the Bel Air Auto Auction, which is already in full swing at 9 a.m. This auction boasts six lanes of traffic that churn out cars until the auction ends, and the auctioneers display their own variation and cadence on the chant to accent the already buzzing environment. – Isabel Bernate

When not working, the family says they enjoy outdoor activities like hunting, fishing, field hockey and boating – both together and with their own spouses and children that include Charles’s two grown sons and a 14-year-old daughter and Michelle’s daughter and son who are 13 and 8, respectively.

As the closing bell rings at the Bel Air Road location, the excitement for the opening bell in Riverside is building. The Nichols family plans continued growth for BSC America, backed by outstanding customer service – their No. 1 priority. I95

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