Remarketing is Key to Maintaining Used-Car Values in Era of New-Car Incentives, Says Manheim CEO Dean Eisner
Creative use of new remarketing techniques has enabled companies with large portfolios of used vehicles to maintain used-car values in the face of the pricing challenge posed by heavy incentives on new cars, said Manheim president and CEO Dean Eisner.
“There are three main keys to maintaining the value of used vehicles in the face of downward pressure on prices,” said Eisner. “First, remarketers must invest intelligently in reconditioning and certification, to position their cars correctly for the wholesale marketplace. Second, they must find the right remarketing channel for each car. And third, they need to work with remarketing partners who can attract the largest possible number of the right buyers to each sale event,” said Eisner.
In addition to services that bring a return on investment in the vehicles themselves such as reconditioning (which typically returns $1.50 for each dollar invested) and certification, Eisner said companies with used-vehicle portfolios are using innovative methods to expand the pool of potential buyers.
“Technology is playing a huge role in expanding the audience in the wholesale marketplace,” said Eisner, pointing to innovations such as the ability to buy and sell vehicles online.
More than 65,000 dealers use Manheim Online each month, representing 75 percent of the nation’s car dealers. In 1996, Manheim became the first to provide wholesale transactions on the Internet, and last year, the company offered more than 1 million units online.
“Expanding the pool of the right potential buyers is critical to achieving true market value,” said Eisner, who demonstrated the Simulcast system for World Congress attendees as part of his presentation. “By combining a lively, open marketplace with technology and the right mix of buyers, we’re able to maximize the value of consignors’ assets.”