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Letter to the Editor
Friday July 9
Copart Enters Technology Contracts with Wholesale Vehicle Auction Companies
Copart, Inc. has entered into contracts with 30 wholesale vehicle auctions, including 6 affiliated companies, to provide its proprietary VB2 auction technology for use in their auction process. Copart anticipates that these wholesale vehicle auctions will begin utilizing VB2 by the end of 2004.VB2 is proprietary technology that allows buyers anywhere in the world to locate a desired vehicle, preview the vehicle through digital images and technical data and participate in a real-time virtual auction via the Internet. We believe that, in the salvage vehicle auction industry, VB2 has reduced buyers' costs by eliminating the need to travel and gather at an auction site, has expanded each buyer's geographic area of operation by allowing participation in multiple virtual auctions simultaneously, and has increased the returns realized by sellers by expanding the size of the bidder pool.
"VB2 has made the entire salvage vehicle auction industry more efficient," commented Willis J. Johnson, Copart's Chairman and CEO, "And our intent is to have the same effect on the wholesale vehicle auction industry."
The wholesale vehicle auction industry processes and sells an estimated 10 to 11 million vehicles annually, supplied primarily by manufacturers, fleet and leasing companies, banks, car rental companies, and car dealers.
"Copart has entered into discussions with numerous companies that supply vehicles to wholesale vehicle auctions and, to date, the reception has been positive. This opens up a whole new industry to Copart, one that is substantially larger than the salvage vehicle industry. We also believe that there is opportunity for VB2 to be applied to other industries," added Johnson.
VB2 has not been proven in the wholesale vehicle auction industry nor has it generated revenue at this time. Further, there is no assurance that VB2 will be commercially successful outside of the salvage auto auction industry.
Copart, founded in 1982, operates 107 salvage vehicle auction facilities in the United States and Canada.
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