Big auction shake-up predicted
08 March 2013
Author: Jack Carfrae
The remarketing industry is in for a major shake-up off as a result of dwindling used vehicle numbers and a change in buyers' behaviour.
That's the view of Roger Woodward, managing director of CD Auction Group, who told BusinessCar: "I don't think any auction company or any remarketing company can any longer just rely on cars coming from Lex, BMW or whatever, because that market's shrinking and shrinking and shrinking. So you need to be able to offer lots of other services to be able to lock these guys in."
The online auction firm has a history of pairing up with logistics providers and other businesses to expand its physical footprint and cut costs, something it intends to do more of in future.
"What we're doing and what we have done in the past is partner with people like [logistics firm] Autologic. We use their facilities. If there's a company up north somewhere, rather than pay for the transport [of the cars] to come all the way down, we can put them into Doncaster.
"We'll get them to photograph them to our standard, then we'll do reports on our Palm Pilots and then we'll sell them from where they are. It cuts the transport costs out and it saves us a lot of money. What we will be looking at is perhaps making that more formal. It's all to cut down costs - vendors want you to do more but they want to pay less."
Woodward attacked the industry standard grading system for the condition of cars coming to auction that was introduced by the National Association of Motor Auctions (NAMA) late in 2012. He has eschewed grading altogether on the basis that a standardised system is impractical to implement across multiple auction sites and deters buyers.
"You can have industry standards but you've still got human beings involved. You've got a guy working for BCA in Blackbushe, a guy working for Manheim in Birmingham, a guy working for Scottish Motor Group in Leeds - never will they get the same answers.
"The problem is you're pigeon-holing your clients' cars. So you get a big leasing company that's going to put loads of cars through, you start giving them fives and sixes, they're going to start losing money on those cars and they're not very happy. The buyers don't like it, the leasing companies don't like it.
"The main problem is that NAMA have dragged in both the books; Glass's Guide and Cap have spent fortunes on it. Everyone's got so involved in it, the answer now is if it's good enough for them it's good enough for everybody, which is total, utter nonsense."