The remarketing industry is an amazing and significant part of the commerce of the economy. The rate of change in this industry is the amazing story. Technology has affected everyone. It wasn’t that long ago that auctions sold vehicles only from and to the local dealer population. Auctions now sell vehicles from many different companies to dealers across the country every day, and not just on a sale day. Remarketers now sell not only to their own dealer body, but also to dealers outside their organization. Some are selling directly to consumers in addition to the vehicle’s current driver. The ways and means to develop the methodology for obtaining higher vehicle sale values at less cost continues to progress every year.
Unfortunately, the booked losses for a large number of remarketed vehicles continues to remain high for a number of companies. It appears sometimes to be a Catch 22. Captive remarketers are tasked with salvaging the best they can under circumstances they do not control, such as new-car incentives and subvented leases. Fleet managers must squeeze dimes and nickels from daily operations and are then expected to hit a home run each and every time on disposal sale day.
The disposal dynamics of any remarketer’s portfolio are varied and huge. What data is used to make the necessary decisions of where, when, and how? Is the portfolio differentiated according to the most recent market conditions? Are past sales patterns by make, model, color, mileage, and location used in the when and where to sell decision? Are months in service or mileage, as a decision point, used as a hard and fast rule? Is there supporting data for the make and model’s maximum value at these disposal points? Is one channel used over and over because it’s easier than finding a new one? What criteria are used to measure the effectiveness of the disposal process? Are other disposal processes ever benchmarked?
Fortunately, many great companies serving the remarketing industry today can provide the data and answers to these and many other demanding questions. These companies and manufacturers are not content to maintain the status quo. In the past five years the remarketing industry has taken monumental strides in sophistication, complexity, and influence. Our industry has developed electronic means to manage inventory and analyze performance. The tools of our trade have grown exponentially, and so too has the value of the services remarketers provide to their respective organizations. Poor residual forecasting and remarketing practices have caused a retreat from consumer leasing. Learned practices in the management of the various types of vehicle fleets have generated substantial profits for well-managed organizations.
More than 100 of these great companies are members of the International Automotive Remarketers Alliance (IARA). The health of institutionally managed fleets, consumer or commercial, lies in the hands of the IARA’s united membership. No other organization focuses and supports all facets of remarketing. The collective transfer of knowledge and experience and the extension of support is the common bond that brings us together. The IARA brings together all types of companies in the remarketing industry to provide the platform for progress through information and education. Sharing best practices and the common search for the next step in higher performance is at the heart of the IARA.
Matt Marks is the executive director of the International Automotive Remarketers Alliance. For more information on the Alliance, visit www.iaraonline.org.
