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Business Issues
What are the current challenges in Remarketing?
Consigners are missing profit opportunities. Captives and banks do not have all the information necessary at an analyst's fingertips, to make decisions focused on maximizing profit while managing the portfolio at both a micro and macro level. Data insights improve decision-making by allowing consigners to determine if the vehicle should be sold (as well as when and for how much) to the lessee and dealer, determine how and when to sell the vehicle, assign to auction, profile dealers and attain the right audience for open and closed sales, set floor prices, make reconditioning decisions, determine residual values, track assets through the process, and manage exceptions. Data from external purchased sources, historical internal data, and data from partners, when integrated and analyzed in an automated manner, are all used to maximize opportunities and manage the portfolio.
Consigners are spending too much on remarketing and reducing their competitive advantage. Processes are inefficient. Technology is outdated. Without the appropriate automation and process efficiencies, additional employees are required to manage the process. All of this results in over-spending and lost profit. Due to market maturity, cost-effective processes, technologies, and even outsource vendors must be considered as keys to making the remarketing group a profit center.
Consigners are losing money. Selling a vehicle sooner in the process means less depreciation and higher values. Much attention has been focused upon selling "upstream," meaning selling vehicles prior to physical auctions. These approaches have proven to be successful for both the dealer and the manufacturer/captive. But, are these individuals truly gaining the highest profit on each vehicle? And, how can the remaining 90% of vehicles be marketed? Upstream remarketing needs to be viewed as a portion of the overall strategy to ensure the appropriate efficiencies and savings manifest across the entire portfolio.
Captives are losing opportunities to increase profit and brand penetration. Research indicates that an individual who leases a vehicle through a captive is likely to purchase another vehicle within the same brand at lease end. This loyalty opportunity is often missed because of the lack of integrated processes. Captives have many opportunities to interact with customers during the lease maturity management process and have many tools at their fingertips to manage their customers' decisions and intentions, as well as proactively manage their portfolio.
Decisions are risky. There is an overload of information and "silver-bullet" companies/solutions. With so much attention focused upon this business area, it is only natural that a bevy of solutions and software providers have cropped up. Separating the marketing hype from reality is increasingly difficult. Determining a pervasive strategy, then identifying priorities and how all the players fit into this, is even more challenging. With limited budgets, consigners need to determine the most profitable ways to invest their technology budget. Consigners are suffering from information overload. This is causing them to make decisions from a short-term perspective, based on what they hear from vendors - not necessarily what would allow them to increase their profits and maximize their portfolio at a macro level.
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