Review of 2021 and looking forward to 2022 Jonathan Holland, Managing Director, ADESA UK

ADESA NEWS | 16 DEC, 2021

What remarketing trends stood out for you in 2021?

2020 was a year like no other, but 2021 surpassed it.

The most significant trend was the exceptionally high demand for used cars. Coming out of the last lockdown, no-one could have predicted how the new car supply chain would be so severely impacted, especially by the semiconductor shortage, and how this would increase the demand for used cars.

All the usual peaks and troughs disappeared. So, for a while, we saw high demand across the board for dealer stock, irrespective of vehicle profiles in terms of age or condition.

2021 has also seen more demand for electric and hybrid cars. Wholesale demand for these cars remains high and that is driven by consumer demand.

How have values performed in 2021?

Like the rest of the wholesale market, used values on UPSTREAM have been very strong this year.

It’s difficult to predict how values will trend in 2022. While they will continue to be driven by an ongoing shortage of new and used cars, consumer confidence will also be an important factor.

For many dealers, 2021 was the first full year they sourced cars online. How do you think they adapted to this new way of doing things?

I think they adapted well. Dealers who historically were nervous about transacting online have now become far more confident. We listen to what they say, and their feedback has been extremely valuable. For them, transacting online is all about the reassurance we can provide by being as transparent as possible about the condition of vehicles.

In the New Year, as a direct result of this feedback, we’ll introduce a mechanical indicator as part of the condition report. It’s another layer of comfort, which will enable them to bid and buy with even more confidence.

With some physical auction halls reopening in 2021, do you think they will suit certain vehicle profiles, especially older ones?

No. I think rather than suiting certain vehicles, I think they will suit certain buyers.

For us, it’s not about the vehicle. We’ve demonstrated that we can sell old, high mileage, and poor condition vehicles online. It’s all about creating the transparency that customers need to buy with confidence online.

We have grown our customer base over 2020 and 2021 and are actively engaging with dealers, from both the franchised and independent sectors, who are coming to us for the first time.

Other buyers will always prefer the more traditional approach offered by physical auctions.

ADESA UK talks a lot about the speed of sale offered by UPSTREAM; how important was this in 2021 to dealers facing such high consumer demand?

Speed of sale is important irrespective of market conditions. Whether you’re disposing or buying, the faster you can turn a vehicle around, the better it is in terms of cash flow and opportunity.

Our ability to bring vehicles to market upstream, the moment they become available, is what differentiates us and opens up commercial opportunities for our customers.

We’ve had a number of instances during the course of the year where cars have been inspected and listed for sale in the morning and sold the same day. Dealers and vendors value the benefit that speed of sale can deliver and this is precisely what UPSTREAM delivers – every day, 24/7.

What do you see as the main challenges and opportunities facing ADESA UK in 2022?

As a specialist online remarketing company, we’ll continue to work closely with vendors and buyers in 2022 and continually evolve to deliver their changing requirements.

Vehicle supply will undoubtedly continue to be a challenge in 2022, especially now it’s being compounded by the global shortage of magnesium. As a sector, we’ve always known that the new and used car markets are closely integrated, but it is only now that we’re seeing the impact they have on each other when there’s a shortage of new vehicles.

As long as consumers face long waits for new cars, then the focus will remain on buying used and as a consequence, the market will remain robust.

Against this backdrop, our challenge in 2022 will be to continue to deliver the best possible digital experiences and outcomes for all our customers using our UPSTREAM platform.

 

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