Online sales will grow from 10% of the UK market to 30% within the next five years as buyers become more confident, according to online remarketing firm Autorola.
“We are seeing far more buyers that are comfortable with purchasing vehicles online,” said Jon Mitchell (pictured), UK sales director at Autorola. “The confidence is definitely there and is increasing.”
Data quality is the main reason that confidence is growing. Buyers no longer have to rely on being told that a car is fine, without photos or a condition report.
“Now they can get that much more,” Mitchell said.
Autorola’s sales process is also helping to build confidence.
After a sale, Autorola waits 24 hours before the funds are released to the vendor. If the car is not as described it is sent back to the vendor and the buyer gets their money back.
It also helps that the money goes into a secure area. If the remarketing company went bust, the buyer’s money would be safe, according to Mitchell.
Another driver for growth is that “inspections are far quicker and easier than they were, making it easier for transport and collection companies”.
There has also been “a vast improvement in data integration”.
“Companies are more willing to integrate with our systems from a data perspective,” Mitchell said. “Two or three years ago manufacturers were reluctant to get involved in data supply because it would have taken a year to do. Now it can be done in three days.”
Autorola’s revenues grew by 40% this year thanks to winning new business – Volkswagen Commercials, Skoda, Lamborghini and United Rental Group are among its new clients – and existing customers increasing their volumes or opting for new products.
A recruitment drive is also underway. Three development managers were recruited this year with more sales people set to join. By the end of next year there should be 10 more people on board.
Autorola is forecasting a further 40% growth in revenues next year.
“Growth will come from dealers, manufacturers and rental,” Mitchell said. “The 40% growth doesn’t include fleet or leasing companies. Any growth there is a bonus.
“Leasing companies are traditionally slower moving because they tend to sign up for longer contracts.”
However, Autorola recently began working with LeasePlan and there are more leasing companies in the pipeline.
Read more about how Autorola is helping LeasePlan to liquidate stock between sales here.