Q&A Jonathan Holland, Managing Director, ADESA UK

INSIGHT | 17 JUN, 2021

What vendor and buyer trends have characterised the year to date?

With car dealerships closed to the public throughout Q1 we saw high demand from retailers operating Click and Collect services, specifically for Grade 1 and 2 vehicles, rather than vehicles needing to be worked on. This demand increased in the run-up to Easter and has continued, with dealers now choosing to source stock irrespective of condition. As a result some clients have seen 100% conversion rates with values performing ahead of cap.

With the shortage of stock across the wholesale sector has been well documented, the biggest challenge at the moment is supply. With retail sites reopened to customers, there is high consumer demand for used cars. We’re also seeing the impact of the semiconductor supply issues in the new car market, which is forcing some manufacturers to temporarily halt production and this is impacting supply as new car sales are needed to generate used cars. The lockdowns have also seen a drop in daily rental activity, with fewer new cars being sourced and subsequently feeding into the used car market. Combined, these factors are impacting supply and demand in the wholesale sector.

As a digital specialist, ADESA launched in the UK with the concept of delivering quantifiable upstream benefits for vendors and buyers, how have these benefits manifested themselves during the lockdowns?

Upstream has been relevant at each stage of the lockdowns as it has provided the ability for vendors and buyers to transact when physical sites have been closed. We’ve proved that you don’t need to move a vehicle to a downstream location before you can offer it for sale. In a market that is under-supplied in volume, it’s giving buyers the opportunity to secure vehicles much faster than if they were waiting for them to appear in auction halls.

And for sellers, irrespective of whether the supply is ample or not upstream is reducing days to sell and that creates a value in regard to savings on stocking, logistical and inspection costs as well as depreciation. They all contribute to the net return on a disposable asset.

How does being part of KAR Global, the listed US-based remarketing giant, benefit ADESA UK?

After the pandemic hit in 2020, KAR Global made a strategic decision to switch to a 100% digital remarketing business model and announced last August it will not return to driving cars through physical auction lanes. Last year it sold 3.1 million vehicles, from 23 March 2020 they were all digital sales.

As a parent it is investing heavily in digital, prioritising technology focusing on enhancing the customer experience and streamlining operations.

It’s no secret the wholesale used car industry has historically been slow to adopt new technologies and embrace the digital evolution transforming the rest of the world. But, KAR Global has spent years leading the industry into a more tech-driven future by investing in and innovating powerful digital marketplaces.

With ADESA UK only ever offering a digital solution, there’s now even greater synergies between us. We also get to share a lot of best practices, especially from its dealer-to-dealer online transactional platform, where its numbers are growing exponentially.

How do you see your upstream dealer proposition evolving?

With our award-winning AI-powered ADESA IVI (Intelligent Vehicle Inspection) tool we now have the technology for dealers to self-inspect vehicles they want to trade-out.

The tool was initially available for vendors but is now being rolled out to dealers and it’s generated a lot of interest as they can see just how quickly unwanted cars can be turned into cash.

For dealers, speed of sale is essential to what they do and we’ve been able to show them how cars inspected in the morning can be sold the same day. We’re also offering them the option of us coming out to inspect their vehicles, we’ll do whatever works best for them.

What’s next for ADESA UK?

Our focus throughout the rest of the year will be on sharing the benefits of upstream remarketing with vendors and buyers.

We’ll also have some exciting developments on the next phase of ADESA IVI which we’ll be able to share over the coming months. In the meantime we’ll be working closely with existing and new clients to work through the current challenges presented by supply constraints.

 

 

 

 

 

 

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