Cox Automotive & the Circular Economy
The Ultimate Resale-as-a-Service (RaaS) Platform
The automotive resale industry, particularly the used car market, represents a substantial and rapidly expanding sector. In 2023, the global used car market was valued at approximately $1.58 trillion and is projected to reach around $3.3 trillion by 2034, reflecting a compound annual growth rate (CAGR) of 7% from 2024 to 2034.1 In the United States, the used car market is also expected to experience significant growth, with projections indicating a market size of $402 billion by 2032, up from $217 billion in 2023, representing a CAGR of 8%.2
Cox Automotive has established itself as a dominant player in the automotive resale industry. Over the years, this division of Cox Enterprises has expanded its offerings to include a comprehensive range of digital platforms, software tools, and market intelligence capabilities that touch nearly every aspect of the resale process. Serving over 40,000 dealers worldwide, Cox Automotive facilitates nearly 8 million used vehicle transactions annually through its Manheim B2B auctions, representing $80 billion in value.
Additionally, Cox owns AutoTrader.com a B2C platform that aggregates more than 2.5 million vehicle listings from both dealers and private owners, contributing approximately $50 billion in resale transactions each year.3 The company processes 24 billion online interactions each year and owns leading recommerce brands, including Kelley Blue Book, Dealer.com, Dealertrack, NextGear Capital, FleetNet America and vAuto in addition to Manheim and AutoTrader platforms.4 Overall, the ecosystem Cox has built, facilitates approximately 1.5 million car deals per month and approximately $130 billion annually in transactions through its B2B and B2C platforms.
In many ways, Cox Automotive has emerged as the ultimate resale-as-a-service (RaaS) company leveraging both wholesale and retail resale platforms along with deep market intelligence and a host of digital capabilities. As such, the evolution of Cox offers valuable insights into companies seeking to establish circular businesses.
Circular Logistics
Before turning to the resale business that Cox Enterprise has built, it is useful to provide a quick overview of the steps involved in the circular logistics journey for vehicles. Circular logistics refers to the processes and strategies employed to manage the life cycle of a product in a way that maximizes its value while minimizing waste. This involves a series of stages that facilitate the return, recovery, and reintegration of vehicles into the supply chain, creating a sustainable loop where their value is preserved and enhanced throughout their life cycle.
Figure 1 illustrates these stages through the product lifecycle loop, with circular logistics beginning at stage 3 with the return and running through stage 4 (asset recovery), stage 5 (reverse operations), and stage 6 (value generation). Stage 7 (responsible recycling) is reached when products come to end-of-life and cannot be economically resold.
In the automotive sector, the return process begins with the collection of used vehicles. This typically involves processing cars that come in through dealer-managed trade-in programs or cars that reach the end of their lease terms. These trade-in and lease programs typically provide financial incentives, making it more appealing for customers to participate while ensuring a steady supply of used vehicles for reconditioning. Efficient transportation logistics are crucial in minimizing costs and environmental impacts, often requiring optimized routes and the use of returnable packaging for parts and components.
Once returned, vehicles undergo inspections to assess their condition, which is critical for determining their next most valuable use. Vehicles deemed suitable for resale are then reconditioned through repairs, upgrades, or cosmetic enhancements to prepare them for a second customer.5 The reverse operations stage involves sorting and processing these vehicles based on their condition and potential for recovery. Those unfit for reuse may be dismantled for parts or materials, with recyclable components being processed to produce new parts, thereby closing the loop in the production cycle.
Value generation is another key aspect of circular logistics. Setting competitive prices for reconditioned vehicles or parts is essential to attract customers while ensuring profitability. Effective advertising and marketing strategies highlight the sustainability benefits of purchasing reconditioned or recycled products, appealing to value-based and/or environmentally conscious consumers. Additionally, efficient inventory management systems are necessary to balance stock levels of both new and refurbished vehicles or parts, ensuring availability without overproduction.
To maximize value at each stage of this process, intentional planning is required. This includes engaging stakeholders—dealers, fleet operators, and car buyers—to streamline processes and leverage resources effectively. Continuous assessment and adaptation of logistics strategies are also vital to aligning with circular economy principles, reducing waste and enhancing operational efficiency. By implementing these steps, the full value of vehicles can be maximized while positively contributing to environmental sustainability through reduced waste and resource consumption.
Acquiring the Core Platforms
Acquisitions played a crucial role in building Cox Automotive's position as the dominant RaaS company for the auto sector. Through strategic acquisitions, Cox built an ecosystem integrating platforms, technologies, and services that support the entire reverse logistics value chain.
The first acquisition was Manheim Auto Auction, which was acquired by Cox Enterprises in 1968.6 Originally founded in 1945, by the late 1960s Manheim had grown to become the world's largest wholesale auto auction platform. Its extensive network of auction locations and large buyer base gave Cox a dominant position in the wholesale market for used cars. In addition to its auction business, Manheim offered services, ranging from reconditioning to financing. This provided a foundation for Cox to build end-to-end solutions for vehicle remarketing. The acquisition also provided valuable market data and valuation tools to build services around industry market insights. It also laid the groundwork for international expansion, with Manheim later growing into markets beyond the United States. Manheim now operates in over 106 locations worldwide, making it the largest wholesale vehicle marketplace globally. This extensive network allows Manheim to connect qualified buyers and sellers through live auctions, providing a wide range of services related to vehicle sales and remarketing.
The second acquisition was AutoTrader.com, which Cox Enterprises acquired in 1998. This acquisition played a crucial role in enhancing the company’s vehicle resale capabilities in the consumer market. AutoTrader.com took advantage of the shift to listing vehicles online, connecting buyers and sellers across the country via the Internet.7 The platform generates valuable data on consumer preferences, market trends, and pricing, which informs other Cox Automotive businesses. AutoTrader.com has been at the forefront of moving vehicle sales online, helping Cox Automotive lead the industry's digital transformation. Additionally, AutoTrader.com's advertising and listing fees provide an additional revenue stream for Cox Automotive, complementing its other business lines. By acquiring AutoTrader.com, Cox Automotive secured a key position in the online automotive marketplace, significantly enhancing its ability to facilitate vehicle resales and provide comprehensive solutions for the automotive industry.
The acquisitions of Manheim Auto Auction and AutoTrader.com provided complementary capabilities that significantly strengthened its position in the industry. By acquiring both platforms, Cox Enterprises was able to build a comprehensive automotive ecosystem that served both wholesale and retail markets. Manheim caters to the business-to-business (B2B) segment by facilitating transactions between dealers and commercial clients, while AutoTrader.com focuses on the business-to-consumer (B2C) market by connecting dealers with individual car buyers. This dual acquisition allows Cox to offer end-to-end solutions for the entire vehicle lifecycle, from wholesale acquisition to retail sales. Additionally, it enabled the company to leverage data and insights from both markets to inform pricing and inventory decisions, creating synergies between the platforms and its other services, while diversifying revenue streams through auction fees, advertising, and listing services. The primarily facilitates transactions between dealers and customers rather than directly buying cars. So, while the company plays a central role in the automotive ecosystem, its business model is centered around enabling dealers and consumers rather than engaging in direct vehicle purchases.
It is noteworthy that for many years, the company focused on building its core resale businesses rather than expanding through acquisitions. The acquisition of Manheim in 1968 marked the beginning of its shift into the automotive sector, but subsequent acquisitions did not happen for several decades. It was 30 years between Cox’s purchase of Manheim and its acquisition of Autotrader.com in 1998. This acquisition was pivotal, but even then, it took time for Cox to fully capitalize on the digital transformation in automotive sales and services.
Building on the Core Platforms
The number of acquisitions accelerated beginning in 2010. Since this time, Cox Enterprises has spent billions of dollars to acquire numerous other companies that further enhance its automotive resale position and deepen the capabilities of its wholesale and retail platforms.
These acquisitions can be organized into the following categories:
Vehicle Valuation and Market Intelligence
Kelley Blue Book (2010)
Fyusion (2021)
Dealer Software and Management Tools
vAuto and HomeNet Automotive (2010)
VinSolutions (2011)
Xtime (2014)
Dealertrack Technologies (2015)
Codeweavers Ltd (2020)
Financial Services
Next Gear Capital (2013)
F&I Express (2018)
Fleet Management and Mobility Services
Clutch Technologies (2018)
FleetNet America (2023)
Spiers New Technologies (SNT) (2021)
Momentum began to build with the acquisition of Kelley Blue Book. This deal was completed in 2010.8 Several factors contributed to the change in the pace of M&A activity. The automotive after-market experienced consolidation, with companies seeking to enhance their competitive edge through strategic acquisitions. This created pressures for Cox to expand its portfolio and maintain its market share. Another factor was rapid advancements in digital technology that transformed how vehicles were bought and sold. These changes created increased demand for integrated solutions that combine various aspects of vehicle remarketing, big data, and software solutions.
In response, Cox acquired multiple companies to bolster its digital and data analytic capabilities. The formation of Cox Automotive in 2014 further signaled a commitment to becoming a leader in automotive services, facilitating more aggressive M&A strategies as the company sought to enhance its market position. With a strong financial foundation and established platforms, the company was well-positioned to pursue multiple acquisitions.
Vehicle Valuation and Market Intelligence
Cox Automotive significantly enhanced its vehicle valuation and market Intelligence capabilities through strategic acquisitions, particularly with Kelley Blue Book in 2010 and Fyusion in 2021. The acquisition of Kelley Blue Book provided Cox with a trusted and widely recognized source of vehicle valuation data. Founded in 1926, Kelley Blue Book was the leading provider of market-reflective values, offering services such as Blue Book Trade-In Values and the Price Advisor tool. This acquisition allowed Cox to integrate Kelley Blue Book's extensive database and valuation methodologies into its existing automotive ecosystem, strengthening its position as a comprehensive source for used vehicle pricing.
In 2021, Cox further expanded its capabilities by acquiring Fyusion, a computer vision company specializing in immersive vehicle imaging solutions. This acquisition built upon a partnership that began in 2018, focusing on developing imaging tools for the Manheim Express app.9 Fyusion's technology enables dealers to create listings with 360-degree images quickly, enhancing the accuracy and appeal of digital vehicle representations. By integrating Fyusion's advanced imaging capabilities with its existing valuation tools, Cox Automotive has created a more robust and precise system for assessing vehicle condition and value. This combination of trusted valuation data from Kelley Blue Book and cutting-edge imaging technology from Fyusion has positioned Cox Automotive to provide more accurate and comprehensive vehicle valuations, supporting 18 billion valuation requests annually.
Dealer Software and Management Tools
Cox Automotive strategically acquired several companies to enhance its Dealer Software and Management Tools, creating a comprehensive ecosystem for automotive retailers. In 2010, the company acquired vAuto and HomeNet Automotive, expanding its software tools for car dealers. vAuto provided inventory management and pricing solutions, while HomeNet Automotive offered vehicle merchandising services, processing 7.8 million unique vehicles daily and helping dealers create compelling online listings.10 The following year, Cox acquired VinSolutions, which enhanced inventory and advertising management for dealers through its CRM and marketing platform, integrating with vAuto to provide real-time pricing decisions and targeted marketing campaigns. Following the acquisition, Cox Automotive decided to make VinSolutions its primary CRM solution.
In 2014, Cox added Xtime to its portfolio, improving customer service offerings through a service retention platform.11 Xtime's software helps dealers manage fixed operations, schedule appointments, and enhance the overall service experience, processing approvals for additional service recommendations in as little as 6 minutes. The acquisition of Dealertrack Technologies in 2015 for $4 billion further integrated software solutions for automotive retailers, combining various tools for inventory management, CRM, and digital retailing.12
Finally, in 2020, Cox acquired Codeweavers Ltd to extend its digital retail capabilities in Europe, strengthening its position as a leading international provider of digital retail solutions for the automotive industry.13 These acquisitions collectively enabled Cox Automotive to offer a comprehensive suite of integrated tools that help dealers manage inventory, market vehicles, retain customers, and streamline operations across the entire dealership ecosystem.
In 2016 Cox Automotive decided to make VinSolutions CRM its primary CRM solution while phasing out Dealertrack CRM.14 The goal was to enable car dealers to maximize the value of used vehicles through a comprehensive suite of integrated features and capabilities. At the core of this offering is the inventory management system, which enables dealers to effectively promote and manage their used vehicle inventory. With GPS-based capabilities it allows dealers to find and promote specific inventory that customers want, create compelling listings with updated information, and increase vehicle visibility through consistent online listings. The integration with Kelly Blue Book provides dealers with valuation data during the appraisal process, helping them to make competitive and accurate offers on trade-in vehicles. vAuto further enhances inventory management by providing insight into vehicle demand and sourcing opportunities. These integrations, shown in Figure 3, enable dealers to appraise cars competitively, turn vehicles quickly, and source from the service lane with real-time alerts.
Financial Services
Cox Automotive strategically enhanced its Financial Services offerings through the acquisitions of NextGear Capital in 2013 and F&I Express in 2018. NextGear Capital significantly expanded Cox's ability to provide inventory financing solutions to dealers, offering customizable floor plans that increase buying power and improve cash flow management. The company provides lines of credit accessible through an extensive network of over 1,000 live and online auctions, as well as for dealer-to-dealer purchases, trade-ins, and off-street acquisitions. NextGear Capital's flexible financing options, such as the Flex Pricing program introduced in 2022, allow dealers to defer certain payments and reduce fees, particularly benefiting cash-sensitive clients.
F&I Express, acquired in 2018, brought innovative technology solutions to Cox Automotive's aftermarket offerings. This acquisition positioned Cox to lead the aftermarket industry into the digital age by streamlining F&I processes. However, in a recent development, Cox Automotive has agreed to sell Express Recoveries, a part of F&I Express, to F&I Sentinel in early 2024. This divestiture allows Cox to focus on its core automotive services while ensuring that Express Recoveries clients continue to receive specialized F&I compliance solutions. Together, these acquisitions and strategic moves demonstrate Cox Automotive's commitment to providing comprehensive financial services and technology solutions that support dealers throughout the vehicle lifecycle, from inventory acquisition to F&I product management.
Fleet Management and Mobility Services
Cox Automotive has significantly expanded its Fleet Management and Mobility Services through strategic acquisitions in recent years. In February 2023, Cox acquired FleetNet America for $100 million, enhancing its fleet operations and service connectivity capabilities. This acquisition aligns with Cox Automotive Mobility Fleet Operations' vision to deliver turnkey solutions backed by fleet experts and an expansive Service Provider network. FleetNet's technology, including a mobile app, offers an automated workflow to keep vehicles operational and fleets focused on their core business. The acquisition aims to transform fleet operations by connecting every vehicle and service, ultimately working towards eliminating breakdowns for customers.
In 2021, Cox Automotive acquired Spiers New Technologies (SNT), introducing EV battery assessment and valuation capabilities to its portfolio. The acquisition expanded Cox's capabilities in managing the entire lifecycle of EV batteries, including storage, logistics, diagnostics, repair, and remanufacturing services. With access to SNT's ALFRED battery decisioning platform, which has become an industry standard for assessing EV battery condition and value, Cox positioned itself as a leader in EV battery health innovation and end-to-end solutions.
Additionally, the acquisition provided Cox with the expertise and infrastructure to support the growing EV market, enabling it to meet customer needs in core markets effectively. It also included SNT's existing operations in the U.S. and Europe, with plans for further expansion into the UK and other European markets. This strengthened Cox's ability to provide services to manufacturers, dealers, and fleet operators within the EV space and enhanced its reputation as a trusted battery advisor and engineering partner to various automakers.
Cox Automotive has also made other relevant acquisitions to strengthen its position in the fleet services market. For instance, in 2023, it acquired Corcoran's Mobile Services (CMS), expanding its nationwide fleet maintenance coverage and a mobile workforce of technicians. These acquisitions collectively demonstrate Cox Automotive's commitment to providing comprehensive solutions for fleet management, maintenance, and mobility services, positioning the company as a leader in the evolving automotive and transportation landscape.
Cox Automotive's Retail360 platform
In September 2024, Cox Automotive launched Retail360 to modernize and streamline the automotive retail experience, addressing the complexities and inefficiencies that have historically plagued the industry.15 The decision was driven by a need to create a true omnichannel experience that connects all aspects of car buying and ownership, integrating dealer websites, third-party marketplaces, and in-store interactions. This approach is designed to meet evolving consumer expectations, as research indicates that a significant majority of consumers desire the ability to continue their online buying experience in-store and expect it to save them time during the purchasing process.
The automotive resale market has become increasingly competitive, with challenges such as scarce inventory and rising interest rates making it more difficult for dealers to find qualified buyers. Retail360 aims to alleviate these pressures by providing dealers with powerful data insights and a unified workflow that enhances efficiency throughout the transaction process. By leveraging proprietary first-party data from its various platforms, including Autotrader and Kelley Blue Book, Cox Automotive can offer predictive insights that help dealers better understand consumer behavior and preferences.16 The primary target for the Retail360 platform includes automotive dealerships looking to improve their operations and customer engagement. It is designed for both dealers and original equipment manufacturers (OEMs), enabling them to deliver a consistent and personalized experience across all stages of the car-buying journey. This focus on enhancing dealer capabilities while simultaneously improving consumer satisfaction positions Retail360 as a way to maintain Cox’s central position in vehicle resale.
Conclusion
Cox Automotive's strategic acquisition strategy has been pivotal in solidifying its position as perhaps the ultimate RaaS company. The company's foundational acquisitions of Manheim Auto Auction in 1968 and AutoTrader.com in 1998 set the stage for its dominance in the automotive resale market. Manheim provided a robust wholesale vehicle marketplace, while AutoTrader.com established a leading online platform for vehicle listings, both of which were instrumental in connecting buyers and sellers across various channels.
As digital technologies began to reshape the automotive landscape, Cox Automotive accelerated its M&A activities to enhance its capabilities. This approach allowed Cox to integrate innovative technologies and services that support the entire vehicle lifecycle. For instance, acquiring Kelley Blue Book enriched Cox's vehicle valuation capabilities, while the acquisition of Fyusion in 2021 introduced advanced imaging solutions that improved the accuracy and appeal of digital vehicle representations.
Additionally, Cox expanded its dealer software and management tools through acquisitions like vAuto and Dealertrack Technologies, creating a comprehensive ecosystem for automotive retailers. These tools not only streamline operations but also leverage data analytics to inform pricing and inventory decisions. The addition of financial services through NextGear Capital and F&I Express further illustrates the goal of providing solutions helped dealers maximize the resale opportunities for used cars.
By capitalizing on its core platforms and adding deep digital and market intelligence capabilities, Cox Automotive has played a key role in the evolution of automotive recommerce. Although not typically associated with the circular economy, the company has built an impressive integrated circular logistic system that enables millions of used vehicle transactions annually.
Footnotes