Fleet News

Car supermarkets set to feature in remarketing

FLEET operators could be dealing with a greater number of car superstores in future as manufacturers try to cope with increasing amounts of used cars being returned for remarketing.

Automotive analyst MFBI claims in a new report that car manufacturers and finance companies are becoming more involved disposals through car supermarkets. The report traces the rise in car superstores over the last 10 years along with a decline in the number of franchised dealers.

Since MFBI's last report on the future of the used car market, in 1999, the number of used car superstores has increased by 29%, while the number of franchised dealer outlets has declined by 5%.

The number of superstores operated by dealer groups has also grown and reached 28 outlets.

The new report says that with dealer numbers falling and the inability of dealers to sell used cars in large volumes without causing a corresponding collapse in residual values, car manufacturers will increasingly resort to opening used car superstores themselves, either as wholly-owned operations or as joint ventures with dealer groups, to market a growing number of used cars.

Used car superstores sold 485,000 used cars in 2001, giving an average sales volume of nearly 5,400 units per outlet, compared with an average of just 290 per outlet for franchised dealers in 2001.

The report shows that although used car sales grew 7% from 1998-2001, the number of used car sales by franchised dealers fell 5%.

Although MFBI expects the number of car superstores to increase, it forecasts that the total number of used car outlets will fall by 16% to 9,850 by 2007, comprising 4,700 franchised dealer outlets, and 5,150 independents, compared with 5,950 and 5,785 in 2002.

  • Copies of The Future of the Used Car Market are available from MFBI, priced at £475, on 01825 713035
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