Italian government uses eBay

Are the world’s leading auction groups wasting their time and money by investing in more and more auction centres and carefully-crafted online remarketing services? Are they at risk of being eclipsed by other approaches to vehicle disposal?

That would appear to be the case if a recent initiative by the Italian government is anything to go by.

Determined to cut costs and shake up the way the country is run, the administration of newly appointed Prime Minister, Matteo Renzi, has decided to auction off through eBay some 1,500 chauffeur-driven executive cars used by politicians and senior civil servants in various government departments. Vehicles that have been deemed non-essential include Maseratis owned by the Defence Ministry along with BMWs, Alfa Romeos and Lancias operated by other ministries, including the Interior Ministry.

However, the move has not dented the confidence of BCA and other auction companies that they will continue to play a key role in the re-marketing of ex-fleet vehicles.

New Dutch auction site for BCA

BCA has recently expanded into a 16-acre (66,000m2) site at Barneveld in the Netherlands complete with physical, Live Online and digital sales capabilities. The centre includes inspection lanes and imaging bays, a test track and a pre-sale preparation area and is close to both the A1 and A30 motorways.

The move coincides with BCA’s acquisition of Fleetselect Online Car auctions, which it says is the biggest Dutch online re-marketing platform. It boasts a buying base of almost 6,000 franchised and non-franchised dealers, car supermarkets and traders.

Both decisions are particularly interesting, given the used car shortage in the Netherlands recently highlighted by Maarten Bekkers, country manager for online marketing platform Autorola.

The shortage has arisen as a result of the major fall in new car sales and the decision by many large fleets to extend their leasing agreements in 2009 and 2010, which is now affecting the availability of second-hand stock. To that can be added the volume of used cars being exported by the Dutch to take advantage of similar shortfalls elsewhere in Europe.

‘Vehicles are often making 10% to 15% more than they would if they were sold in their home market,’ Bekkers says. ‘As a consequence, as many as 60% of cars sold through our online platform are being purchased by buyers outside the Netherlands.’

The profit that can be made by vendors makes the extra administration work involved worthwhile.

The result is that Dutch dealers are now frantically trying to import second-hand vehicles from Germany, Hungary and Poland in particular to compensate for the lack of locally sourced models.

Largest indoor auction facility in Irish Republic

Returning to the topic of investment, Wilsons Auctions is now well established in its new 19-acre (77,000m2) site in Dublin in the Republic of Ireland. ‘It’s Ireland’s largest indoor auction facility with separate halls for different kinds of assets so we can run four auctions simultaneously,’ says branch manager, Ricky Wilson.

Last year saw Wilsons hold what it says was the first manufacturer closed auction in the Republic of Ireland, for Citroën. The sale incorporated Live Bid, which meant that dealers from all over the country could participate.

Manheim upgrades North American facilities

On the other side of the Atlantic, 2013 saw Manheim spend over $26m (€19.24m) on expanding and upgrading its facilities and services in the USA and Canada. The investment included the provision of extra sales lanes, new and upgraded inspection, preparation and body shop facilities and the addition of Digital Lanes.

In place in Manheim Ohio and Manheim New Mexico, they replicate the buying experience online without the need to run vehicles through physical lanes. Manheim aims to have such lanes in place at a dozen locations by the end of this year.

Among the company’s biggest projects was the construction of a 27.7-acre (112,000m2) site in Riverside, California, which offers certification and inspection services to Volkswagen Credit and Audi Financial Services.

Nor is Manheim expanding solely in its own premises in North America. Earlier this year it joined forces with Hendrick Automotive Group, which operates 87 dealerships in the USA, to create Hendrick’s first on-site auction lane.

Based at the group’s location in Charleston, South Carolina, it is being used to dispose of trade-in vehicles sourced from the company’s 11 dealerships in and around the city. ‘It’s a solution that is helping us save time and money and sell more vehicles,’ says Hendrick vice president, Chris Little.

Last autumn Manheim announced the creation of Go Auto Exchange, a joint venture with DriveTime, one of the USA’s largest subprime credit second-hand car dealers. It has resulted in the establishment of a new auction business that is targeting its services at independent dealers and the budget-price end of the used car business.

Sites have already been established in Atlanta, Georgia and Phoenix, Arizona.

Multiple online auctions

Manheim’s eagerness to embrace the latest technology is illustrated by the way in which it is working with other North American remarketers. This includes ADESA and ServNet, to help create a multiplatform bidding solution that will allow for simultaneous bidding on vehicles listed on multiple online auction sites. The aim is to enable a car to attract bids from multiple online auctions from the moment it is offered for sale, until the winning bid is made.

The auctioneers have set up a steering committee, which has engaged Auto Auction Services to build and maintain the hub technology that will be used to synchronise bidding between the multiple online platforms. The new initiative should be ready to be piloted later this year.

‘We believe this product will be better than anything offered in our industry today,’ says Jim Hallett, chief executive officer of KAR Auction Services, ADESA’s parent company.

‘It’s the type of solution our customers have been asking for because it will provide maximum exposure for their vehicles,’ he continues. ‘It will mean more bidders for their cars and more choice for dealers.’

ADESA holds weekly sales at 65 centres across the USA, Canada and Mexico and its online auction venues include ADESA LiveBlock. It also builds and manages online sale platforms for vehicle manufacturers.

New pricing tool from Autorola

Elsewhere, Autorola has introduced a new pricing tool called INDICATA for dealers and manufacturers which uses real-time data with the aim of ensuring that dealers do not over or under-price stock, thereby harming their profitability. Now available in Denmark and Spain, it is being rolled out in the Netherlands and will be launched in Belgium, Austria, Sweden and Portugal this year.

Autorola’s Fleet Monitor asset management system is being used by Danish leasing company AL Finans to manage the re-marketing of its 3,500-strong car contract hire fleet. Having installed the new package in January, it is using it to automate end-of-contract inspections and damage re-charges. The company says it has already seen used vehicle stocking days fall by 52%.

‘We are processing more cars in less time,’ says remarketing manager, Rene Egeskov Jensen. ‘Automated letters are being sent to customers three months prior to de-hire which makes it easier for us to book cars into our de-fleet compound.’

Fleet Monitor is being employed by UniCredit Leasing in Italy at 21 locations.

‘We have made bespoke changes to it to fit in with UniCredit’s systems and it should speed up the process of converting assets into cash,’ says Autorola country manager, Thomas Andresen. ‘It will also help UniCredit determine the best remarketing channel for each vehicle.’

Online remarketing expands globally

Online remarketing is steadily expanding worldwide. Autorola Germany has partnered with Ford to run the latter’s first-ever live online auction in the country. May 2013 saw Autorola debut in Turkey.

The move makes sense, says the company given the country's sheer size. This means it takes prospective purchasers a long time to travel to and from physical auctions. So far as the vendor is concerned, opening up stock to a country-wide base helps increase the number of bids received and the prices realised. Buyers can bid round-the-clock for the duration of the auction.

Autorola introduced what it has to offer cautiously at first, conducting an extensive education exercise aimed at potential users. No more than 30 cars were offered during the first, four-day, auction that was held.

Tax increase sparks used car interest in Turkey

‘The majority of Turkey’s used vehicle stock comes from Istanbul and the surrounding area and when buyers make a purchase the vehicles head either south, west, or east to be sold by franchised dealers and independent used car dealers,’ says Autorola Turkey’s country manager, Oguzhan Saygi.

‘For our first sale we worked with vendors to extract historical information on the vehicles and took photographs of each one to optimise provenance and ultimately buyer confidence,’ he continues. ‘This worked as we managed to sell a few cars in our very first sale, which was a huge achievement.’

During the subsequent six months, Autorola Turkey held 73 successful online auctions. Around 90% of the cars being entered are from the leasing industry,with major lessors such as Otokoc Otomotiv and Hedef Fleet working closely with Autorola.

‘Interest in used cars continues to grow, especially now the government has increased the special consumption tax, which has caused new car prices to rise,’ he says. ‘Used prices are now rising in turn and the leasing and rental companies have grasped the benefits of online remarketing.’

‘Dealers are also beginning to realise that online represents an efficient use of their time when stocking their used forecourts, which will become even more important now that the demand for second-hand cars is expanding,’ he adds.

Cost favours online in Australia

Autorola is also making its presence felt in Australia, helping the insurance industry dispose of salvage cars online rather than having to collect them and pack them off to conventional auctions; a time-consuming and expensive exercise given the size of Australia.

‘If a car or commercial is written off in the outback then it could be transported 1,000 miles before it reaches a physical auction,’ explains Autorola Australia country manager, Philip Browne. ‘The salvage value may only be A$500 (€345) but the transport costs could be as much as A$2,000 to A$3,000 (€1,380–€2,070), which does not make economic sense.’

Use Autorola’s platform and the vehicle can stay where it is and be offered for sale immediately accompanied by photographs and a service history.

It is an approach that is good for the environment too because eliminating the requirement to transport cars to auction centres cuts fuel usage and CO2 emissions.

‘We’ve had consultants from Impact Sustainability look at three months’ worth of data from our current client base and they reckon that by eliminating the need for 2,000 truck journeys we have reduced CO2 emissions by almost 185 tonnes,’ Browne says.

‘Such reduction are proving very popular with major corporate clients who are much more aware of the impact of their business on the environment nowadays,’ he adds.