A successful remarketing process involves bringing the vehicle to its contract termination at the right time and with a correct mileage. You don’t have to be Einstein to understand that a 4 year old car with 130.000 km is more interesting to sell than a 7 year old car with 230.000 km. Your lease company is well placed to advise you on the possible durations and mileages. A second very important issue is that the company cars are still in good condition, with limited damage, no smoking smell etc , because the condition of the end of contract car has a direct impact on the real second hand value. But unfortunately there are more than just these elements to look at to speak of a successful remarketing process. According to the remarketing specialists process efficiency and transparency are vital. The fleet-owner and/or lease company deserve the fastest and most cost efficient solution. “Transparency is crucial”, says Steve Newton, General Manager at Autorola International. “You have to know exactly what you’re selling and you have to share this with the prospective buyers, so that you avoid any disappointment from the buyer’s side.” When we speak about damage inspection, taking pictures of all damage is a good starting point and will give confidence. A second element is the process. In fact the remarketing flow starts when the fleet manager of a company decides to end the use of a company car. “A good supply chain management system is needed. Such a system integrates the appointment for the inspection, the inspection with the driver, the transport order, the administration and damage billing and the connexion to multiple sales channels to sell the car” declare Joep Weijden and Bertrand Durand of MACADAM Europe. Johan Meyssen, CEO at CarsOnTheWeb, also confirms that efficient handling and logistic processes are absolute conditions for efficient remarketing : “This guarantees efficiency in logistics and administrative flows.” The third element is the market situation. Not every market is as mature as the UK or the Netherlands. Not every market has high level company cars like Belgium or Germany and not every market is as interested in selling second hand vehicles. The pricing of the end of use car has to be adapted to the vehicle condition, the market and economic development and the interest of the buyers. So as a fleet manager don’t expect to get the same price for the same car in every country. The last element influencing the remarketing success is the remarketing policy within the company. We may be living in one big European Union, but as there are cultural and economic differences between countries you have to understand these differences. So as an international fleet manager you can perfectly well decide centrally on the overall remarketing strategy and procedures, but use the local levels to complete the work.

 

Remarketing is an evolving process that is influenced by various elements. Taxation and legislation play a more determining role in the sellers’ and buyers’ attitudes, as taxation can have a strong influence on the residual value of a car. “In the Netherlands we see that the hybrid cars are popular due to interesting taxation”, says Joep Weijden of MACADAM Europe. “So thinking that you are selling a unique and interesting low mileage hybrid car might be true locally but internationally this does not count. Sellers will have to look over the border before even selling a car. But international buyers are also very much influenced by taxation as they will always look for the best place to buy a certain car.” Although remarketers, buyers and sellers are looking for the best opportunity taking into account local preferences, we can’t deny the internationalization of the remarketing industry. “Vehicles are sold abroad”, says Peter Bevelander, Sales Manager Benelux at SGS, “and they will continue to be sold internationally. In order to do this successfully, IT is everything. Websites must be able to display a vehicle at distance.” A statement confirmed by Johan Meyssen from CarsOnTheWeb: “As Europe is becoming bigger and bigger and the Eastern and Central European countries are becoming more developed, sales towards these countries will increase. These countries will create a new demand. On the other hand there will be an increased offer of quality used vehicles being sourced in Central Europe and being presented to buyers all over Europe. It’s logical that with internationalization, internet sales will increase and become more important than physical sales. But to do this in the right way, you need to have a structured and efficient back-office tool.”

When looking forward, IT will become more and more important. For Peter Bevelander of SGS Benelux all fleet vehicles will be sold online in the near future. “The whole process will be digital and anyone who is involved in the remarketing chain will be sitting behind a desktop screen, doing the business they are used to doing.” The IT (r)evolution demands a solid IT backbone and IT system, so that safety is always guaranteed and processes can go on at any time. But as remarketing is becoming more international and goes via IT, differentiation can be done by process harmonization and stronger customer services. “There will be the need for an increased focus on process quality and efficiency” says Steve Newton from Autorola, “and we also believe that the need for integrated solutions will increase.” Along with this he hopes that OEMs and major operators will get increased awareness of the real cost of having an internal remarketing department, as a lot of costs are hidden and not taken into account in the right way. It’s clear that taking the full picture into account is vital. When you have many hundreds or thousands of vehicles around the globe these hidden costs can clearly become substantial numbers. 

Price-wise there could be a high degree of volatility on the way. Joep Weijden of MACADAM Europe: “The market is displaying unexpected trends influenced by past market decisions. Scrappage schemes and the push of low CO2 emission vehicles have artificially changed new car registrations since 2008.” And that artificial situation seems today to be having a strange impact on the second hand market. “Hybrid vehicles are popular in new car registrations today, but they perform poorly on the second hand market, while SUV’s on the contrary have recovered rather well.” This proves that vehicle segments and vehicle technologies can develop differently or as Joep Weijden puts it : “There is an imbalance between new car registrations and the demand for used cars.”

A last trend will be the impact of the new emerging markets. Most of the remarketing specialists agree on the enormous potential of the Russian market and in the short term Russia will have on impact on the remarketing business and the price level of second hand cars. Although everyone sees the potential there’s still the question of whether today the possible opportunities of being active on the Russian market are large enough to compensate for the risks in terms of security, volatility of the market, lead times, etc. For at least the next decade to come other emerging markets like China, Brazil or India are less important because they are not yet mature enough and too far from Europe, thus expensive in terms of transportation. So for the years to come, the remarketing story will still be a European one.