Autorola: Shift towards online used car sales is nigh
12 December 2012
Author: Jack Carfrae
A third of all vehicles will be remarketed online within five years according to Autorola.
The remarketing firm, which operates solely web-based sales, is bullish about the fact that electronic defleeting of vehicles is set to take over from physical auction in the medium term and that industry giants are likely to follow suit.
"In five years, 30% of the market will be sold totally online. We see this accelerating afterwards. It's about 10% of the UK market at the moment," said UK sales director Jon Mitchell.
"The whole technology piece is driving the change. Manheim and BCA are changing very quickly.
"We're aiming to lead the technology side of things and hoping to get some of the others to follow suit."
Mitchell said the company had experienced growth of 40% this year and expected the same again in 2013, with the creation of around 10 new roles by this time next year.
He claimed that a change in the way used buyers purchase their vehicles was responsible for the shift towards web sales: "The scale is tipping in terms of buyer behaviour online but there are still obviously a lot of buyers who are quite hesitant about it and want their hand holding. The confidence is there and it's increasing."
The company has now branched out into the leasing sector and provides Leaseplan with an online service to supplement its physical auction sales. "Our Leaseplan offering is to help them liquidate stock between physical sites," Mitchell explained.
"So if they get a 75% conversion at a sale today, the other 25% might sit for two weeks before the next sale, but we're actually getting the data at the end of the sale that didn't sell, then we're marketing the vehicles online and they're being collected direct from the auction centre.
"They're not having to wait and take the drop in residual value a couple of weeks later."
He described remarketing business in the fleet and leasing sector as "traditionally slower moving" but maintained he was keen to increase business there: "That's a sector we're jumping into more heavily. There are some leasing companies in the pipeline at various stages."
He claimed that the approach of targeting vehicles that have failed to sell is "certainly a way in" with the leasing companies.
"If vehicles don't sell, this gives us a different angle to help them in the meantime. A lot of [the leasing companies] have laid off people that represent them at auctions, so they've changed their sales plans quite radically.
"There tends to be bigger gaps between sales, and auction and leasing companies are finding that a car or a commercial vehicle is sat round for a bit longer and potentially across a book drop as well, so it's almost turning that stock live."
Follow BusinessCar on TWITTER.