Remarketing: Auction sites or websites?

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Last September the global remarketing giant announced that it was installing a total of 11 double-block auction lanes at Manheim Detroit, Manheim Statesville in North Carolina and a number of other locations. Such lanes double the number of vehicles that can be run down a single lane during a sale.

When it made the announcement, the company had just completed a makeover of its Manheim Fort

Lauderdale auction centre in Florida and was proposing to add 28 mobile auctions to its portfolio as a consequence of the success of the existing

Yet despite all this activity it would be wrong to pretend that online solutions are not gaining ground; and gaining ground rapidly.


Dealer top picks

Still in the USA, BMW Financial Services is now making it easier for all dealers to source BMWs and MINIs before they cross the auction block.

Powered by RMS Automotive’s web-based vehicle portfolio management system, can now be accessed by independent dealers and non-BMW franchised dealers. Previously open to BMW franchisees only, the site now gives any buyer with a valid AuctionACCESS account round-the-clock entry to BMW’s national inventory of off-lease vehicles.

“With more off-lease inventory entering the market we needed to take our upstream remarketing programme to the next level,” says BMW Financial Services vice-president of sales and marketing, Nina Englert.

Like Manheim, RMS Automotive is owned by Cox Automotive. In April Cox further expanded its global footprint by acquiring a majority shareholding in Brazilian vehicle valuations business Molicar while last November saw it invest in Indian multi-site used car operation Mahindra First Choice Wheels.


Alphabet spells it out with BCA

In Europe, Alphabet International has developed a new online remarketing platform to dispose of its second-hand ex-contract vehicles under the Alphabet Used Cars banner. Developed in conjunction with remarketer BCA, one of its key advantages is that once a vehicle's details have been uploaded to it then all subsequent stages in the disposal process are automated.

Once the sale price and details of the buyer have been recorded then both the invoice and the accompanying documents are generated automatically.

The different types of bidding possibilities include ‘Buy Now’, overnight auctions and longer auctions. The system allows buyers likely to be interested in particular makes and models to be identified so that Alphabet can notify them when they will be coming up for sale.

Net result? Hopefully satisfied purchasers and better prices for the vendor.

The standardised approach allows, say, an Italian buyer to purchase a car in Belgium although the platform was not designed primarily with cross-border trading in mind, says Alphabet.

BCA’s European sales director, Peter Dietrich, says that one of the key drivers in favour of online disposal is its potential to shorten the selling cycle and cut holding costs.

“Time is of the essence and working capital is increasingly important, so there is a strong desire to minimise and streamline the process that takes vehicles from the end of the lease to being sold and funds going back onto the company's bottom line,” he continues.

“There is a drive to prevent additional expenditure – the, often invisible, holding costs – after the lease-end,” Dietrich adds. “That means reducing storage requirements, avoiding the need for double inspections and keeping transport costs to the minimum matter more and more.”


Volvo chooses online platform

As if to illustrate the variety of different ways in which web-based technology can be employed, Volvo is deploying online sales specialist Autorola’s

Indicata web-based business intelligence platform in support of its second-hand vehicle operations and aims to use it in a number of countries. Indicata collects, processes and analyses used car market data so that a manufacturer can better understand the position so far as pricing, supply, demand and inventories are concerned.

“All manufacturers will be using this sort of intelligence within the next five years,” predicts Autorola Group chief executive officer, Peter Groftehauge.

In a bid to support fleet managers, Autorola has launched Fleet Monitor, initially in the Netherlands, Belgium and Denmark. Other European markets will follow.

A workflow management tool able to accommodate from 200 to 200,000 vehicles, it starts with the acquisition of the vehicle and finishes with its disposal, and covers all the key stages in between. It interacts with third-party suppliers such as smart repairers and vehicle transport companies and can be linked to the fleet operator’s back office.

“It is designed to make de-fleeting and remarketing more straightforward and in the case of large leasing and rental fleets ensures that no vehicle is lost in any of these processes,” says Groftehauge.

Listing some 300,000 vehicles a year on its platform – “the total is rising by 25% year-on-year,” he reports – Autorola is now planted in 18 countries, mostly in Europe but also embracing Australia, Turkey, Mexico and Brazil. “We’ll be moving into more countries in 2017,” he says.

Vehicles are offered by fleets, leasing companies, dealers and manufacturers, with anywhere from 30% to 95% of the entry sold depending on the vendor and the demand for what is being offered. “We sell a wide variety of cars up to and including Lamborghinis and McLarens,” he reports.

Perhaps not surprisingly, he takes the view that online disposal will eventually replace physical auctions. “Our approach delivers more value to both vendors and buyers and is more cost-efficient, so it’s just a question of time,” he comments.

Using Autorola’s platform means that vehicles can be offered to the market immediately rather than having to be transported to an auction centre and stored – possibly for several days – until the next sale takes place, Groftehauge points out. As a consequence vendors can potentially realise the value of their assets more quickly.


Cross-border sales

In Europe some of the platform’s selling is cross-border, with buyers in Germany for example able to bid for cars in Denmark and vice versa. “In certain European countries cross-border sales account for 50% of the volume,” he says.

That is one of the advantages of using Autorola if you are a vendor, contends Groftehauge; the way in which it presents what you have to offer to a far wider audience than might otherwise be the case.

If you are a purchaser you enjoy greater choice too.

“There has been a shortage of used cars in Spain because so many were exported during the recession,” he says. The ability to use Autorola to make purchases in other countries however means that Spanish buyers can obtain the vehicles they need.

“As a consequence a lot are being imported now,” he says.

The key benefit of online rather than physical disposal for vendors he claims is a 5% better performance thanks to a combination of higher prices, faster turnover and lower overheads. “I know of one major European vendor who is saving around €10m a year by switching to Autorola,” Groftehauge states.

Businesses such as Manheim – again perhaps not surprisingly – take the view that what is required in many markets is a mixture of a physical and an online remarketing presence with the one complementing the other; although online has clearly established a wide, deep, bridgehead.

“Manheim pioneered online sales channels in the Thai market back in 2008,” says Simon Moran, the company’s Asia Pacific vice-president. “Since then we’ve extended our lead through the continued development of online purchasing.”


Mobile sales channels

One way in which it has done so is not to assume that everybody who buys online does so from a desktop PC but has instead made it easy for people to make purchases using mobile devices.

“There are no signs of physical auctions diminishing though,” he observes. “In fact growth is still in play and online is very complementary to this all over the kingdom.”

“Physical auctions remain a vital part of the remarketing industry in Australia,” says Campbell Jones CEO of Manheim Australia and New Zealand (pictured). “However, the growth in online participation is gaining pace.

“Online registrations grew by 55% in the first six months of this year compared with the same period in 2015, driven largely by our launch of a new approach to Simulcast which now allows people to bid and buy online at physical auctions using tablets and smart phones.”

All Manheim’s Australian auctions offer Simulcast.

“We’ve experienced a decline in attendance at physical auctions, but it's only been slight,” he adds. “If anything the appetite for online sales is augmenting the total available audience rather than having a negative impact.

“Some of our manufacturer customers offer online-only auctions for their dealer networks but we’re not seeing the need for a wider transition to online-only sales in the fleet and leasing segments.”

“In Europe we’re seeing more in-lane cars (i.e. those offered at physical auctions) being bought online and some customers selling exclusively online,” says Cox Automotive international business development director, Nuno Castel-Branco. “All salvage sales are carried out online for example.”

“In South America the market still requires physical auctions,” he adds. “But the number of cars being bought online at such auctions is growing significantly.”

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