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New Survey Shows Auto Remarketers Shifting to Online Auctions, Other Upstream Remarketing Strategies
Emercent Solutions reveals industry survey results at CAR Conference and IARA's Remarketing Roundtable Series
Las Vegas - January 21 - 23, 2004
Online auctions and other upstream remarketing activities are quickly becoming key components of auto remarketers' sales strategies, according to a new industry survey conducted by Emercent Solutions with assistance from the International Automotive Remarketers Alliance (IARA). The findings are derived from a survey of 25 auto industry executives representing 42% of the vehicles remarketed annually.
But to what extent will online auctions capture buyers from the decades-old tradition of physical used-car auctions? This is one of the key questions auto industry executives are exploring as Emercent reveals the findings from their survey.
"We are seeing a shift in the way vehicles are remarketed," said Julie Andersen, vice president of strategy and delivery for Emercent. "This is significant, because the physical auction process has not changed dramatically for the last 60 years. The survey underscores what most of the industry has been seeing in the last two years."
"Online auctions are definitely having an impact on the way vehicles are being remarketed," said Matt Marks, executive director of the IARA. "While physical auctions are certainly not going away, channels like online auctions are becoming increasingly important."
The survey of captive lenders, banks, and fleet and lease companies examines current trends and future intentions regarding the use of upstream remarketing processes and procedures. Upstream remarketing is defined as any selling of a vehicle prior to delivery at a physical auction.
The survey findings include:
- Among captive lenders, upstream remarketing activities now account for more than 40% of sales. As part of this, online auctions account for about a quarter of sales. Sales to grounding dealers and lessees represent 17% of the transactions.
- Banks now use upstream remarketing channels to complete nearly 50% of their wholesale transactions. Of this activity, sales to lessees make up approximately 30%, and sales to grounding dealers account for another 7%.
- Fleet and lease companies are using upstream remarketing activities to dispose of about 50% of their inventories. Almost 25% of this is for sales to employees who have driven the vehicles. Fleet and lease companies use the wholesaler market to dispose of nearly 13% of vehicles.
- Most survey respondents believe that upstream remarketing activities have helped their bottom line. Captive lenders report that upstream channels have reduced the turn time on their vehicles by an average of more than 20 days, resulting in millions of dollars in savings.
- The survey results also show that more than half of the captive lenders are now spending less than they were in the past on their remarketing activities. The survey respondents from banks and fleet and lease companies say they are spending more, but are still increasing profits.
- Both banks and captive lenders intend to increase their use of sales to grounding dealers, as well as online auctions. The newest channels, as expected, have the largest increase potential.
Please contact Emercent Solutions for more information. Emercent also provides specialized remarketing services and solutions.
About Emercent Solutions
Emercent Solutions provides business and technology consulting services for the vehicle remarketing industry. Organizations look to Emercent because of the company's proven experience delivering a full spectrum of ROI and results-driven consulting services, from vision to implementation. Through the combination of strategy, business process, and technology consulting, Emercent creates solutions that achieve measurable results. The company is based in Chicago. More information is available at www.emercent.com.
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