Businesses are being advised to review their vehicle remarketing strategies to ensure they are prepared should lockdown measures be reintroduced.
The recommendation comes as large volumes of end of contract company cars and funded vehicles enter the wholesale market following the easing of some lockdown restrictions.
Jonathan Holland, managing director of Adesa UK, is urging fleets and car retailers to deploy digital remarketing strategies which will help them avoid being unable to dispose of vehicles if lockdown rules are ever reapplied.
“While no one could have predicted the impact the Covid-19 crisis would have on businesses, there is now an opportunity to learn from the experience and introduce strategies that limit the business risk and disruption associated with sole-dependency on physical auctions,” he said.
“Fleets and dealers who only use physical auctions had assets held in limbo during the lockdown which had a considerable impact on their bottom lines. Our advice to them is to consider utilising specialist online channels as part of their remarketing mix.”
Covid-19 is set to transform the used car market, with more vehicles being sold online at the expense of physical sales.
The industry almost came to a grinding holt in March, when the Government closed all but essential businesses and asked people to stay at home. However, some remarketing companies could continue trading online.
Holland explained: “The crisis highlighted that the businesses most prepared to endure had previously adopted diversified supply strategies.
“With contingency planning in place now the financial pain of having vehicles potentially stuck in compounds, or on end-user driveways, can be avoided.”
Holland confirmed high levels of demand for defleeted used vehicles following the reopening of car showrooms in England on June 1.
He said: “Within two weeks of the reopening some of our sales days were busier than we would normally see in January, traditionally a busy month for restocking, with many vendors and dealers using online remarketing for the first time.
“We experienced initial high demand for cars priced up to £10,000, as well as electric vehicles and hybrids coming off fleets but now that demand has pushed into high value stock across the board, especially for LCVs.”
At Shoreham Vehicle Solutions, pent-up demand for used vans reduced stock levels to a point where prices rose by between 30-40% in June.
Hosting its first auction where 30 invite-only buyers joined SVA’s online buyer audience, dealers saw market prices rise again with some stock making £1-2,000 more than it did seven days previously.
Adesa UK, a division of KAR Global, is an online vehicle remarketing provider for OEMs, fleet and leasing companies and dealers.