This year it is estimated that over 300,000 of all remarketed cars in the UK will be sold digitally, or UPSTREAM, without troubling a physical auction lane.
That figure has grown from over the last few years and we expect UPSTREAM to account for 50% of all remarketing sales in five years’ time.
The shift from physical to digital UPSTREAM remarketing has accelerated as fleet management specialists, leasing operators, daily rental companies and OEMs, have taken more control of their de-fleeting processes to reduce the unavoidable downtime associated with traditional auctions.
We here at ADESA are seeing how stakeholders are reaping the benefits of UPSTREAM remarketing.
For vendors there is a significant reduction in the time it takes to bring de-fleeted cars to market by eliminating wasted days in transportation and storage, before they even enter an auction hall. Savings made here mean assets are realised faster and depreciation risk is reduced.
The benefit for dealers is their ability to access desirable de-fleeted stock much sooner in the process, significantly reducing the costly time between sourcing and retailing.
Furthermore, the market intelligence available to these dealers is more granular than before and is being used in conjunction with analytic tools enabling them to buy the right cars at the right price in a seamless digital process; an absolute prerequisite for a new generation of buyers who are comfortable with sourcing and selling stock online.
UPSTREAM has totally transformed the market in the US, where ADESA is a major player. According to the latest analysis from Maryann Keller & Associates, the influential independent automotive consultancy, around half of America’s 4 million off-lease cars in 2017 were sold UPSTREAM, more than three times higher than the total achieved in 2013.
Indeed, ADESA in North America has just reported a 29% increase in the second quarter of online-only volumes, reaffirming its position as the undisputed leader in private/white label sales.
A major driver has been OEMs moving to get financed cars off their books and into the used sector, a trend we are seeing in the UK with the phenomenal growth of vehicles bought through manufacturer supported Personal Contact Purchase (PCP) schemes.
Likewise rental companies are no longer dependent on buy-backs from the OEMs and are seeing the benefit of swifter UPSTREAM de-fleeting enabling them to churn more efficiently than before.
Commenting on how UPSTREAM has changed the way cars now enter the used market, Maryann Keller said: “Remarketing has evolved. It’s more than a physical process; it is a process by which you can improve the value at the end of your ownership. And people now understand that time is money, so getting that car sold fast is part of improving your overall return; getting it in the right channel at the right time and under the right conditions.”
ADESA’s dedicated focus on UPSTREAM remarketing is helping this shift become a reality for vendors and buyers here. We are achieving impressive conversion rates which continue to improve as awareness of UPSTREAM remarketing grows across the UK.
Contact us to see how we can help transform your remarketing processes.