Fleet News

Guest opinion: brave new world of remarketing

MIKE Pilkington, managing director of Vehicle Remarketing Solutions, says it is time for fleet operators to take a fresh look at selling vehicles.

'Satellite navigation, third-generation mobile phones, alternative fuel vehicles: our world is constantly evolving and yet the way fleets dispose of their end-of-term vehicles has undergone little change for decades.

Times are changing as fleet operators are faced with the challenge of an ever-increasing selection of routes to market. A well-balanced mix of routes is essential in today's marketplace, but the mix needs management as the choices become increasingly diverse.

There are auctions, the internet and a new breed of remarketing companies, which provides an effective route to market for stock.

Such companies provide remarketing services to manufacturers and large fleets that use single site refurbishment and remarketing to offer dealers the fastest route to quality vehicles.

The latest technology and sophisticated marketing methods allow a rifle shot approach to be taken for each vehicle.

With more methods of fleet disposal than ever before, fleet operators have the option to choose where to place their stock for the best residual values and ultimately minimise the wholelife cost of the vehicle.

While the high mileage fleet vehicle is likely to remain the preserve of auctions, there are opportunities for fleet operators to turn to discreet remarketing companies with nearly-new and large volumes of a particular type of vehicle whose residual values would be distressed in a traditional auction environment.

Discreet remarketing has grown on used vehicles under two years old and 40,000 miles. However, as this method of remarketing has become more accepted, older vehicles are increasingly been sold by these methods.

There is a growing trend for dealers to purchase slightly older quality vehicles this way, which sits side by side with traditional remarketing channels, such as the auctions.

The way used vehicles are supplied to the market can exert pressure on the dynamics of supply and demand, particularly where large volumes of similar product are available. Remarketing companies can provide a discreet route of remarketing that disguises the quantity and similarity of vehicles and hence residual values.

The auctions may claim to achieve true market value for vehicles but the market has moved on and discreet remarketing allows disposals managers to better target their vehicles to areas of highest demand and thus higher prices for certain types of vehicle.

Fleet operators will see significant benefits if they have flexible remarketing strategies that allow them to select the most appropriate sales channels in any given circumstances.

In our experience, most manufacturers and large leasing companies have sales channels that work well when markets are strong, but lack the flexibility to pursue alternatives when prices come under pressure.

The remarketing challenge faced by fleet operators is further complicated by the greater choice of marques and specifications available to their customers. This will ultimately produce a greater mix of vehicles to remarket and require careful selection of the optimum disposal channel for the product.

Manufacturers and large fleets can benefit from giving greater consideration to the most effective routes to market for specific products and not rely on a 'one size fits all' approach.

For example, the available market for Vauxhall Vectra 1.8 LS is huge compared to Mercedes Benz S-class. Each product should be addressed on an individual basis with a bespoke approach that gives due consideration to market conditions.

The industry can take comfort from the fact now, more that ever before, the infrastructure is available which allows companies to remarket large volumes of vehicles quietly and discreetly to as many different motor retailers as possible, helping both to support residuals and protect brand values. Isn't it time that disposal managers embraced the future?'

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