THE auction industry is a world of extremes, with a growing gulf between the national players and a host of smaller single site rivals.

Such a divide has led to growing debate about the best home for a fleet's disposal business and whether it is best to focus on the size and services available from national players, such as BCA or Manheim, or opt for smaller local players.

In the not too distant past, BCA was the only major player in the market. It now has a network of 23 auction centres in the UK handling more than one million vehicles every year and generating a turnover of more than £2 billion.

But a series of mergers between rival minnows created a growing national rival in the shape of Manheim Europe.

The firm offers more than 500,000 vehicles a year for sale, with a total of £1.2 billion-worth of vehicles sold. The company has national coverage through 19 UK sites.

In the latest act of consolidation, Manheim snapped-up Tyne Tees Motor Auctions in a move which almost doubled its sales volumes in the North East when it acquired the goodwill of the North Shields firm.

With the divide between large and small, fleets are asking the burning question 'does size matter?' The answer is not a simple 'yes' or 'no', industry experts argue, as fleet managers need to look at what they want out of an auction company.

Tom Madden, BCA customer affairs director, argues that service, rather than size, should be the deciding factor in choosing a disposal firm. He said: 'Surely it should be 'good' versus 'poor', measured in terms of customer service, residual value performance and speed to market?

'It is not about big auctions or small auctions, it is about meeting your customers' expectations - after all, they are best placed to judge your performance.'

Mark Yates, Manheim Auctions' group operations director, is confident that small local vehicle auctions will always be around offering a local service to both the trade and to consumers.

He said: 'Many offer a high level of personal service, but without a national network of sites and money to invest in new high-tech products, such as our electronic auction facilities they will always struggle to gain large amounts of fleet business.

'Tyne Tees Motor Auctions was a good example in that it had an excellent following of buyers and sellers through offering high levels of customer service to dealers and the trade, but only about 20% of its volume was fleet based.'

Fleets, therefore, can pick and choose disposal firms according to their particular requirements, the type of vehicles they are selling and the number of cars or vans they have to sell.

If they need a national sales network, with a single point of contact for all their requirements, then national players remain the only option, but smaller, single site auctions can provide a vital outlet to buyers who may pay a premium for certain vehicles.

Smaller auction houses also argue they deliver the best customer service and can tailor their offering to meet the needs of each fleet. As a result, fleets have the option of a third way, opting for a choice of large and small suppliers, instead of limiting themselves to a single firm. This means the fleet will be able to benchmark the service of big against small.

There is growing evidence that this is a viable option, as the growing list of contract hire firms in the so-called superleague make use of both national and local disposal firms.

Single-site Eastbourne Car Auctions has consolidated on the perceived benefits of a local supplier to double the size of its auction business in the past year, with more than 400 cars a week now going under the hammer.

Jonathan Mitchell, Eastbourne Car Auctions' director, believes there will always be a place for the independents.

He said: 'Some firms do not want to send their vehicles to be sold in companies larger than themselves. They fear that the large auction house will set the pace, rather than the fleet selling its vehicles.'

Premier Motorauctions now has a 15-acre site in Leeds and expects to sell 46,000 vehicles this year. It has invested in a new £250,000 car wash and a new entry bay to cope with increasing business. For managing director Keith Elliott, the big boys have grown as big as they can.

'Manheim and BCA appear to have done an excellent job of setting up a network and picking off the good independent sites so there are not that many left.'

Wilsons Auctions is the fourth-biggest auction house in the UK with three sites in Northern Ireland and one in Scotland, behind Scottish Motor Auctions, BCA and Manheim.

But for operations director Peter Johnston, the gap between big and small means the company does not align itself with the larger companies. Instead, Johnston places the company almost in the middle ground, bridging the divide.

Johnston said: 'If a customer needs something done it can be done. We are big enough to have the technology to compete with the larger players, but small enough to move forward without being cumbersome.'