John Bailey has risen through his family auction company in Bristol, UK to his current position as President of Manheim’s International Operations. He may still have an office at Manheim’s Bristol site, but he doesn’t spend much time in it these days.

Europe is a challenging place to do business at the moment, and we started by discussing the marketing trends, particularly in Greece, Italy, Portugal and Spain. “The downturn in the economy has created a downturn in car volumes, obviously”, says John. “Spain since 2007 has halved from 1.7m to 800,000. Greece is even worse from 278,000 down to under 100,000 and Portugal 215,000 down to 153,000. For Manheim, we are in Spain and Portugal. In terms of re-marketing, the conversion rates and the demand for the cars is a challenge. People have less cash than they did and if they had it, the credit crunch has dried that up. Dealers can’t stock cars because they haven’t got the funding. That’s affecting those markets so we’ve geared our business accordingly around that so it’s not damaging us too badly.

“Italy is an interesting one”, says John, “Numbers have dropped from 2.5m to just under 2.0m and it’s a new market for us. We’ve only been selling physical and on-line there for two years, but it’s one of our growth markets in Europe, despite the challenges.”With customers keeping new cars for longer, stocks of good used cars may become more scarce in some markets. But since most – with the exception of the UK and Ireland – are left-hand-drive markets, it gives an opportunity for used stock to be moved from markets where business is weaker to those where demand is greater. How well does this work in practice?

“The key thing is specification”, says John. “Different markets have the same makes and models with minor changes in specification. It’s a moving market because of the demand in the local market. You might say that a BMW from Spain that no-one wants to buy will do well in Germany, but BMW is a German brand and they are everywhere there, so it doesn’t quite work that way. Then the specification of the German BMW is higher than the Spanish BMW, so there’s a pricing issue. There’s more scope in some Eastern European countries, so some buyers in those countries will drive through Germany and France to get to Spain and take a car back.

”Manheim also sells a number of vehicles in the US for shipment to Europe. “We have an export business out of the US called Export Trader”, says John. “Buyers from Eastern Europe, the Middle East and Africa will buy left-hand-drive vehicles from Manheim USA and ship them.

Something like 8% of the volume we sell in the US ends up exported, that’s around 300,000 cars.” If the vehicle fits in a container, this can be a cost effective way of moving stock.Despite the distance, Manheim has seen a new trade build up this year between the UK and New Zealand. “A lot of used cars were sold from Japan to New Zealand – they’re both right-hand-drive markets”, explains John, “But the regulations on compliance have tightened up since 1 January this year.

“Last year, 85,000 vehicles were shipped from Japan to New Zealand. Now 80% of those don’t comply, so there’s a massive potential shortage. It’s only potential because they are still selling the back stock, but it’s drying up and we see that market opening up even further at the end of this year.”